Market dynamics will soon change in the Rs 7,200-crore branded snacks sector. To counter competition from multinational players, domestic players like ITC Foods, Parle Products, CavinKare and Parle Agro are drawing up fresh strategies to woo consumers. Despite a slowdown, the sector is growing at 30%. Recognising the growth potential of this sector, Indian FMCG majors are beefing up their operations to drive volumes.
To begin with, makers of Bingo, ITC Foods is betting big on innovative products, brand-building plans and digital communications to take on multinational rival PepsiCo, led at the global level by Indra Nooyi . At present, PepsiCo India's Frito-Lay is leading the pack in the branded snacks sector.
While Parle Products is extending manufacturing capacity and distribution network, CavinKare that acquired ‘Garden Snacks’, is strengthening its snack portfolio with retail and marketing initiatives. The company is also scouting for acquisitions to extend product portfolio.
On ITC's plans, chief executive, foods division at ITC, Chitranjan Dar said: “ITC is leveraging its distribution and supply chain investments and cuisine expertise of hotels division to enhance consumer franchise in the snacks segment.”
“Our strategy includes, enhanced brand-building efforts, effective use of digital media and clutter breaking communication campaigns,” he added. ITC had entered the branded snacks category in 2007 with Bingo.
Meanwhile, Parle Products, makers of Parle Namkeen, is investing in research & development to launch new products to woo diverse audience. “There’s a pipeline of new products to be launched. We are looking at new categories in the snacks sector,” said Pravin Kulkarni, the general manager (marketing), Parle Products.
Parle Products is increasing the manufacturing capacity at its four plants. The company is also extending distribution by 20% to reach out to a wider audience. It is also targeting young consumers. On August 16, Parle Products tied up with the international gaming company Rovio Entertainment to promote Parle Wafers.
Like ITC, Parle Agro that sells Hippo snack brand is also betting big on innovations. “Our core strategy is to continue focus on innovation and introduce first-of-its-kind brands in India,” said Nadia Chauhan, the joint MD of Parle Agro.
After acquiring Garden Namkeens in