Local Confectionary Brands Take Bite of Indian Market, Eat into Larger Firms’ Sweet Tooth

As the market leaders in the packaged food business, including several MNC brands, struggle to protect their margins in the face rising wage cost and raw material prices, they face a new challenge that is getting bigger by the day. A rising number of home-grown local confectionaries are taking an ever-increasing bite of the market, eating into the sweet (and salty) tooth of established players.

The overall pie is large. According to the International Market Analysis Research and Consulting Group (IMARC), the Indian confectionary market notched up sales of Rs 33,820 crore in 2022-23 and this is set to scale Rs 48,590 crore in 2028, growing by 6.3 per cent (CAGR). The forecast till 2032 is equally sweet and salty, slated to be in the region of 5.39 per cent CAGR.

In India, a biscuit or cookie, or a wafer and khakra, are emotions you chew on. Every purchaser of biscuits and namkeens today was once a child, and has fond memories of Parle G, Britannia Marie and Krackjack, as also of aloo bhujiya, moong dal and chips, the most prized possessions through infancy. Consider this: since 1929, Parle has been the household biscuit brand in every home, so much so that memories of pairing it with chai, milk or even plain water abound not just in India, but globally as well … as do memories of Krackjack and mock TV advertisement fights between siblings screaming “meetthe namkeen; meetthe namkeen.”

Memories are hard to let go of, as are life-long munching habits, but India’s local confectionaries seem to have made up their mind to do so. It is a given that established, larger brands have a higher distribution footprint, greater brand recall and a muscular media presence, compared to smaller Indian confectionaries. However, this very strength is now being targeted by smaller players on account of their low capital investments (for standalone and home-based units) and limited technical expertise required.

A recent market report pointed out that larger players’ sales were being throttled, even as smaller firms were making inroads into the buyers’ mind-space with negligible funding and only a handful of sales ‘foot-soldiers’ reaching out to retailers. Domestic players’ sales are rising at around 120 per cent year on year.

State-level policies and incentives are playing a part too. The Gujarat Government, for instance, has rolled out sops to encourage investments and new players into the food processing and confectionary space, says a report by the Netherlands Enterprise Agency. These include degree courses in food processing, specialised Entrepreneurship Development Programmes, Food Processing Training centres and easy access to finance.

That Gujarat has 51 dairy plants, a 1,600-kilometre coastline and many modern ports, plus the brand Amul, has helped. In recent years, several popular brands brands such as Balaji Wafers, DSM Nutrition, Prataap Snacks and Jabsons have come out of Gujarat. Other Indian states are now trying following suit.

Amid this rush for marketshare, the one product line that remains intact and unchallenged, thus far, is that of instant noodles and Nestle’s Maggi, even as shelf-space for biscuits and namkeens gets inundated with new brands with a new look, colours, vibrancy and even categories.

Even as Maggi holds fort, things are changing all around it. Banana chips. Fafdas. Khakras. Dal moth. Matthi. Rewadi. Moongfali ki patti. Chikki. Namak paara. Traditional Indian savouries are enticing buyers with a twist of tang and sweetness to make deep inroads. They taste as delectable as they did when we were growing up, but they are now shorn of their ‘desi potlis (packaging)’, clad in ultra-modern wrappings with all the trims, bells and marketing whistle.

Admittedly, lower overheads and facilities’ costs are helping smaller players, and they are smart enough to pass on the benefits of the country’s ‘traditional medicinal wisdom’ to the new tomorrow. Smaller players also say good omens have helped, though market experts put it all down to business acumen, citing the tale of one entrepreneur who started the manufacture and supply of bottled nitrogen for wafers and other packaged food items. He has since made it big, partnering not just with local manufacturers but with international brands as well.

This is a phase of change in the Indian confectionary space—tastes and munch habits are clinging on to the yearning of yore, but are also open to explore the delight of a new crunch, or an older smack in a new avatar. It is perhaps this trend that is redefining sales behaviour. At a time when Big Guns are offering freebies and discounts to shore up sales, local brands are making no penance or apology, demanding top rupee for what they offer—yesterday’s taste with today’s hygiene, yesteryear’s desi fare to the ‘globeratti’, and memories of the buyers’ youth wrapped in fresh packaging and abounding with Indian herbs and spices.

This is an all-new legacy for today’s Indian to pass on to his next generation. Can we every dare say again that “a biscuit is a biscuit is a biscuit”, or that a “wafer is a khakra is a namak paara”? Probably not, given the multiple options and flavours that confront us. ‘Confront’ not because they beckon or tantalize us with taste or aromatic sharpness, but due to the fact that they command us to unwrap goodness with the one feeling that India can never ignore—Emotion

(The author is a New Delhi-based journalists and current affairs commentator. Views expressed are personal)