The biscuit industry in India witnessed annual growth as below:-

     2005-06      -        14%

     2006-07      -       13%

     2007-08      -       15%

     2008-09      -       10%

     2009-10       -      14%

    2010-11       -       15%                        

The biscuit industry has been growing almost at static level during the last decade.

However, production of Biscuits witnessed steep decline to 10% in 2008-09 and further to 14% in 2009-10 and 15% in 2010-11, Indian Biscuit Manufacturers’ Association (IBMA) estimate biscuit industry to grow in the range of 15% to 18%in ensuing five years.

Annual Production:

The organized biscuit manufacturing industry‘s annual production figures are given below:

(In Lakh Metric Tonnes)

       2005-06   -   14.29

       2006-07   -   16.14

       2007-08   -   17.44

       2008-09   -   16.57

       2009-10   -   18.25

       2010-11   -  19.10

Segments:

The organized and unorganized sector of the biscuit industry is in the proportion of   65%:35% ratio.

·         EXPORTS of Biscuit was 10% of the annual production during the year 2007-08, which declined to around 7% in 2008-09 and witnessed higher growth of 12% and 15% in 2009-10 and 2010-11, respectively.

·         IMPORTS of biscuits into India has not shown any significant growth during    the last two years and has not affected production/sales by the Indian Biscuit industry.

Rural-Urban penetration growth of Biscuit

Urban Market:  75% to 85%

Rural Market:   50% to 65%

Marketing

Wholesale and Retail marketing in the Biscuit industry is carried out with a network of C & F Agencies (for States and specific Districts), Dealers / Wholesalers and Retail shops.

HIKE IN COST OF PRDUCTION

  Biscuit Industry especially the Small & Medium Sector, consisting of around 150 units are facing erosion in their profitability and competitive capability, due to Steep hike in cost of production on account of increase in prices of major raw materials, i.e. Wheat Flour Veg. Oil, Sugar, Milk, Packaging Materials, Fuel.  Wages, etc. Recent increase in prices of Petrol/Diesel in May 2008 has further resulted n cost push.

Value Added Tax

Imposition of Value Added Tax (VAT) by the State Governments @ 12.5% compared to VAT at 4% / 0% levied on other similar food products has also adversely affected biscuit industry.

On behalf of the industry, IBMA has been pursing the issue with the Chief Ministers/Finance Ministers of all States and also with the Chairman of the       Empowered Committee on VAT, seeking reduction in the rate of VAT on biscuit to 4%.  IBMA delegations have already met Shri Asim Dasgupta, Chairman, Empowered Committee on VAT, as well as Deputy Chief Ministers & Finance Ministers of Bihar, Orissa, Jharkhand, Punjab, Haryana, Delhi, Andhra Pradesh, and officials of Uttar Pradesh etc. While most of the State Ministers have expressed their support of IBMA’s representation, however the issue has not so far received favourable consideration by the Empowered Committee on VAT.

IBMA estimates annual growth in the range of 20% to 25% and above in the event of reduction in the rate of VAT on Biscuits to 4%.

With introduction of Goods and Services Tax (GST) slates for 2012, the industry look forward to relief in the incidence of higher taxation burden.

PER CAPITA CONSUMPTION of Biscuits in the country is only 1.8 kg, as compared to 2.5 kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg USA 

Pattern of Biscuit Consumption (On Zonal basis) in the country are as below:

Northern Zone    -  26%

Western Zone     -  24%

Southern Zone    -  23%

East and North

East Zone            -  27%

(Including N. East)

The per capita consumption as well as pattern of consumption in the four regions, as shown above, will also increase considerably, in case the industry’s plea for reduction in the rate of Value Added Tax (VAT) from 12.5% to 4% is acceded to.

Main Categories of Biscuits are broadly as under:

Glucose, Marie, Sweet, Cream & Milk

 Popular Brands of Biscuits in the country are, Britannia, Parle, Priyagold, Anmol, Sunfeast, Biskfarm, Dukes, Cremica,  Priya, Veeramani, Bonn, Bhagwati, Raja, Sobisco, Madhabi, Nezone, Ankit, Nalanda, etc.