Besides multinational companies, which currently rule the roost, the Rs 7,500-crore salty snacks category is becoming a hotspot for local players, who are now lining up a slew of products to enhance market shares.
Local sweets and snacks manufacturer Haldiram's, which has an over 70% share of the traditional snacks market in the country, is working on developing its western food category, which currently forms a small part of its total business. The company is planning to launch instant noodles and frozen food in the next six months, besides launching at least eight to 10 products in western snacks segment every year.
Local sweets and snacks manufacturer Haldiram's, which has an over 70% share of the traditional snacks market in the country, is working on developing its western food category, which currently forms a small part of its total business. The company is planning to launch instant noodles and frozen food in the next six months, besides launching at least eight to 10 products in western snacks segment every year.
"We wish to double our sales in western food while sustaining the market share in local products," said A K Tyagi, president (FMCG business), Haldiram Group. The Rs 3,000-crore family-managed company has over six manufacturing units churning out namkeens, bhujias and other Indian savouries and plans to invest Rs 75 crore in setting up another facility in Noida next year.
It is also targeting to increase its turnover three times in the next five years on the back of the new product launches.
The snacking segment in India, growing at healthy double digits, is thriving with activities from multinationals such as PepsiCo and local FMCG companies such as ITC and Parle vying to enhance their market shares.
Similarly, leading player Bikanervala Foods, which is the manufacturer and marketer of Bikanervala and Bikano branded products, plans to introduce at least 14 new products in the western snacks space from November onwards to March next year and will invest Rs 160 crore in the development of the category. "The growth for branded packaged products is much faster than non-packaged products. For the next four to five years, we will be launching several products in the category as there is huge potential there," said Rajiv Dhandhi, general manager (sales), Bikano.
Both local chains had been focusing on the traditional food space until last year. But with foreign players witnessing healthy growth, company executives said they are working on strategies to develop a significant hold on the market in the next five years.
In a bid to counter Pepsico's Frito-Lay, which controls roughly half of the segment, domestic chains are focusing on improvising their distribution networks. Haldiram's, for example, is planning to double its presence through retail outlets in the next five years.
With domestic food chains having a strong local foothold, experts say the potential for growth is huge. As most of these chains are not aggressive on the marketing front as their focus is to keep prices low, analysts say leveraging the unorganized channel could help companies counter the low-cost model that brands like PepsiCo's Lehar Foods operate on.
Most of these domestic chains have the advantage of being priced lower than their foreign counterparts. Both Haldiram's and Bikano are working on developing low-priced packs to ensure wider access.
"Local players have the advantage of in-depth access to local channels of trade" said Arvind Singhal, chairman, Technopak Advisors.
