ITC's cookie rollout crumbles on output glitch

Even before the Rs 10,000 crore cigarette major ITC Ltd could finish its national roll out of the 'Sunfeast' range of biscuits launched last month, it is experiencing production shortages and has to defer entering smaller markets.

The company has introduced biscuits in all three major biscuit segments - glucose, cream and marie- under the umbrella brand of Sunfeast, to complement its recent diversification into the food sector.

In the past two years, ITC has increased its product portfolio to include food products and launched ITC Foods to focus on four distinct categories including, ready to eat (RTE) foods, staples, confectioneries and snacks.

Each category boasts of a variety of products with the RTE foods business including vegetarian and non-vegetarian dishes, staples having 'atta' or whole-wheat flour under the brand name of 'Aashirvaad', snacks with 'Bischips' and confectioneries with Candyman and Minto.

The biscuits business is a recent addition to ITC Foods with the national launch taking place only last month.

Planning, however, seems to have gone awry somewhere as the demand for biscuits at present far outstrips supply. The non-availability is a lost business opportunity for the company.

The tobacco giant does not have a unit of its own for manufacturing biscuits. It has entered into a working arrangement with MIDC, Hingna (Nagpur)-based unit, Sobisco Foods Pvt Ltd and Big Boss Food Ltd, a Burdwan (West Bengal)-based company for producing biscuits under ITC's quality management.

It is sourcing cream biscuits and a part of its marie offering from Sobisco Foods, while Big Boss caters to the glucose segment and the balance demand for marie.

Both units are operating at full capacities with Sobisco baking 250 tonnes of biscuits per month and Big Boss producing 350 tonnes per month.

ITC estimates the national biscuit industry at 8 lakh tonnes per annum worth Rs 4,500 crore. Of this, the branded industry is roughly 60 per cent at 4.8 lakh tonnes worth Rs 2,700 crore per annum.

According to ITC's calculations, the branded segment has shown a compounded annual growth rate of 5 per cent in the past three years which is predicted to more than double soon.

ITC is aiming at 10 per cent of the branded market share, presently dominated by Britannia and Parle.