Final Project

CHAPTER 1 INDIAN SNACKS INDUSTRY1 1. INDIAN SNACKS INDUSTRY 1.1 INTRODUCTION The project purports to decipher the satisfaction level as well as the preferences of consumers pertaining to the various packaged fried chips. I aim to analyze the success, marketability and future growth prospects of various packaged fried chips. I also intend to study the popularity of different snacks. Basically I intend to find out the perception of consumers towards various packaged fried chips in the market and to compare with each other. Snacks as such are a very minor part of the food processing industry because the snacks sector is largely unorganized and consumption outside urban areas is not high. For this a survey was conducted in Mumbai where respondents were asked to fill a questionnaire. The data was collected and analyzed to obtain conclusions. This report carries an introduction of the company profile, details of the methodology followed, detailed data analysis and the results obtained. 2 1.2 INDUSTRY OVERVIEW Snacks are a part of consumer convenience/packaged foods segment. Snack is described as a small quantity of food eaten between meals or in place of a meal. Snack food generally comprises of bakery products, ready-to-eat mixes, chips, namkeen and other light processed foods. According to the ministry of food processing, the snack food industry is worth Rs. 100 billion in value and over 4,00,000 tonnes in terms of volume. Snack food generally comprises bakery products, ready-to-eat mixes, chips, namkeen and other light processed foods According to the ministry of food processing, the snack food industry is worth Rs 100 billion in value and over 4,00,000 tonnes in terms of volume. Though very large and diverse, the snacks industry is dominated by the unorganized sector According to an Apeda survey almost 1,000 snack items and 300 types of savories are sold across India. The branded snacks are sold at least 25% higher than the unbranded products Savory snacks have been a part of Indian food habit, since almost ages. Though there is no particular time for snacks, normally they are consumed at teatime. The variety is almost mind-boggling with specialties from all regions, which have gained national acceptance industry. he been growing around 10% for the last three years, while the branded segment is growing around 25% per annum 3 to stand at Rs 5,000-Rs 5,500 crore, due to various reasons like Multiplex culture, snacking at home while watching TV, pubs and bars (where they are served free). AC Nielsen's retail audit shows that the large sales volumes are due to a marked preference for ethnic foods, regional bias towards indigenous snacks and good value-for-money perception. Of course the branded segment is much smaller at Rs 2,200 crore, which is what makes it so attractive to food Companies that are looking at bigger shares and in the branded snacks market, to get down to basics, Frito Lay commands a share of 45%, followed by Haldiram’s at 27% and ITC at 16%. The rest is divided between a handful of new entrants, wannabes and many regional players Of the wide range of snacks available, potato chips constitute a sizeable segment of the Indian snack food industry, according to India Info line. The potato chip market is generally an unorganized industry. Nearly all potato chip snack products are manufactured and sold locally. There is also no uniform standard for packaging, as there is in Europe, the United States and other more developed regions. Many snack foods are sold loose or packaged in poly-pouches, which may only be folded, or in some cases, stapled closed. As the Indian economy continues to grow, and production standards improve, many snack food companies are making significant investments into plant equipment and packaging machinery. 4 The industry today stands at around Rs 5500 crore. The branded snacks are sold at a price that is at least 25% higher than the unbranded products. the snacks industry is dominated by the unorganized sector. while the branded segment is growing at around 25% per annum. According to an APEDA survey almost 1.. P&G currently imports the Pringles product and therefore the product has been priced at a premium and is marketed to a micro-niche. normally they are consumed at teatime. now known as Frito-Lay India Ltd. including Ruffles. The variety is almost mind-boggling with specialties from all regions. snacking at home while watching TV or in pubs 5 . Frito Lay's story is an example of how American recipes were adjusted to satisfy local tastes.000 snack items and 300 types of savouries are sold across India. Though there is no particular time for snacks. The industry has been growing at around 10% for the last three years. since ages. Pringles is also a baked potato crisp. produces India's largest snack food Manufacturer’s brands. Procter & Gamble's Pringles brand of potato crisp was launched in Delhi in 1999. This increase is due to various reasons like Multiplex culture. which have gained national acceptance. Though very large and diverse. Savoury snacks have been a part of Indian food habits. Hostess.Pepsi Foods Ltd. Cheetos and Uncle Chips. unlike many other potato based Indian snack foods that are fried.. and bars (where they are served free). The potato chip market is generally an unorganized industry. Cheetos and Uncle Chips.. AC Nielsen's retail audit shows that the large sales volumes are due to a marked preference for ethnic foods. which may only be folded. As the Indian economy continues to grow. to get down to basics. The branded segment constitutes only half the market which is what. or in some cases. Many snack foods are sold loose or packaged in poly-pouches. Frito 6 . Pepsi Foods Ltd. now known as Frito-Lay India Ltd. The wide range of snacks available.. and production standards improve. makes it so attractive to food companies that are looking at bigger shares. the United States and other more developed regions. many snack food companies are making significant investments into plant equipment and packaging machinery. potato chips constitute a sizeable segment of the Indian snack food industry. There is also no uniform standard for packaging. followed by Haldiram’s at 25% and ITC at 16%. owns India's largest snack food brands including Lays. In the branded snacks market. regional bias towards indigenous snacks and good value-for-money perception. Hostess. wannabes and many regional players. Frito Lay commands a share of 48%. as there is in Europe. The rest is divided between a handful of new entrants. Nearly all potato chip snack products are manufactured and sold locally. stapled closed. P&G currently imports Pringles and therefore the product has been priced at a premium and is marketed to a microniche. Pringles is also a baked potato crisp. Pringles brand of potato crisp was launched in Delhi in 1999. Procter & Gamble's.Lays’ story is an example of how American recipes were adjusted to satisfy local tastes. Figure 1. unlike many other potato based Indian snack foods that are fried.1: Potato Consumption in India 7 . an IT/cigarette company making huge inroad in the CPG market. Key weapon in this war for the Indian snack market are the Indian flavors. Potato production increased more than 850% since 1960. The development of the snack market has also created a growing demand for dehydrated potato products. Market leader is Frito-lay with a 45 % market share. after China at #1 and Russia at #2 and before the United States at #4. Haldiram's has a 27% market share. Here are a few more of the many companies operating in the Indian chips and snacks market. The per Capita Potato consumption in India has risen from 12 kg/capita/year in the early nineties to over 16 kg/capita now. used as raw material for snacks. 8 . Also a dairy manufacturer (Amul) just announced to move into the snack market. The market is far from stable: recently ITC. Read more on the recent developments on the Indian chips and snack market. due to both increased production area and yield. with a slight decline in recent years The sector developing most rapidly is the snack foods sector. including potato chips.India is the 3rd largest potato producer in the world. has managed to get a market share of 11% with its potato chip "Bingo" in just 6 month. planned to start the production of frozen fries with his company Satnam Agro Products in Jalandar. Also the company Merino Industries (dehydrated potato products among many other products) has its own tissue culture laboratories for multiplication and potato variety development. Intriguing aspect of the potato supply chain in India is the strong vertical integration: ITC bought earlier this year the Australian company Technico that developed technology for rapid multiplication and variety improvement. And for those that want their french fries even more Indian than that: just last month Mandeep Singh. world's largest French Fry manufacturer McCain Foods is active in India since 1995. the degree of involvement of processing companies in the multiplication and further development offers a lot of promise for the future potato processing potential in India.With regards to frozen potato products. Although CPRI certainly has done a good job in developing suitable varieties for processing for the Indian cultivation conditions. Nevertheless. the production of French Fries in India has been brought to a new level. 9 . a Punjab farmer turned french fry manufacturer. With the recent completion of the new McCain factory in Gujarat. India has long been handicapped by the lack of infrastructure for the frozen food distribution chain. Indians in the western 10 . Quoting the study by McKinsey&Co." The Indian snacks market is worth around US$ 3 billion.1. Pepsi and Haldiram's are some of the leading players. with a growth rate of 7-8 per cent per year. There are approximately 1.56 billion. the report said. The unorganized snacks market is worth US$ 1. In the organized potato chips market.000 types of snacks and another 300 types of savories being sold in the Indian market today. a report by the US Department of Agriculture stated "The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4. the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. and has an annual growth rate of 15-20 per cent.3 READY-TO-EAT SNACKS & NAMKEENS According to a study by McKinsey&Co. with the organized segment taking half the market share. Potato chips and potato-based items are the most popular products with more than 85 per cent share of the salty snack market.1 per cent. There is a big market for snacks in India as urban Indian consumers eat readymade snacks 10 times more than their rural counterparts. the exposition organized in Chennai by the Confederation of Indian Industry. India's growing acceptance as 11 .' the report stated. The Indian food industry’s sales turnover is Rs. Exports of food products can become a valuable growth driver for the Indian food industry. leveraging the historic base and new specialty categories where India has great potential to emerge as a strong brand abroad. Food exports in 1998 stood at US$5. 140. according to the latest update on the industry by McKinsey the report. released on Monday at Foodpro 2003. it further added.” There is a widespread recognition in India that consumers are likely to replace light meals with snacks". has identified emergence of an organized retail sector.8 billion whereas the world total was US$438 billion. value additions and convenience driven by consumers. India is one of the world’s major food producers but accounts for less than 1.000 crore annually as at the start of year 2000. followed by the people in northern region.regions eat the maximum amount of snacks. creating immense opportunities for manufacturers and retailers. "Consumers are willing to pay a premium for both value-added private and branded products.5 per cent of international food trade. 14 bn market still remains with unorganized sector comprising of local manufacturers.1 Industry Overview The Indian snacks food market is of the order of 400. There is a wide range of product categories differentiated based on taste. Indian snack food industry comprises of many Indian as well as MNCs. The Indian snack market reached a value of $307. Namkeens & Fun- 12 . Only Australia. This wide range of products is categorized under Potato / Banana Chips. value added foods and exotic foods and their exports were the main opportunities for the Indian food industry adding that there will also be a significant growth in terms of input providers.35-60 a kg. Japan and South Korea have won greater revenue from the sale of snacks. It pointed out that mass market of basic foods.7 million in 2001. It is one of the largest snack markets in the Asia-Pacific region. Largest share of this Rs.souring hub and continued deregulation of the food sector as the four positive trends. India contributes three percent to the total Asia-Pacific snack market revenue. At a low average price of about Rs. logistics suppliers and retail.000 tones. China. 1.3. and fillings are sold in India1. the branded and organized snack food segment dominated by major players such as Frito Lay. Health foods. health food supplements and convenient foods are also rapidly growing segments. Britannia. Bikano and Balaji is estimated to grow by 15 to 20 percent per year. cookies etc. Product pricing for branded products are normally 15 to 20 percent greater than for the un-branded food segment due to higher overhead expenses. Parle. As per an industry estimate. Cadbury. HLL. followed by snack nuts. Con Agra.000 snack items and 300 types of savories of diverse tastes. forms. Nestle. Snack food packaging ranges from 35/40 gm sachets to 400 gm economy packs. Kellogg’s.Foods. chickpea and other pulse-based savory snacks. aromas. bread sticks). whereas the growth of un-branded snack food is likely to grow modestly at 8 percent per year in the near future (table 1). bases.) and cheese snacks are in high demand across organized retail chains. Dabur. textures. diet snacks (soy nuts. Around 1. 13 . Potato chips and potato based products are by far the largest product category with over 85 percent share of the salty snack market. breakfast cereals. Popcorn. sizes. Small packs work very well in India. ITC. Haldiram’s. baked & roasted snacks (biscuits. chocolate coated snacks. specialty breads. Marico. which manufactures potato chips with fat content ranging from 20% to 40% and moisture content as high as 3-4%. the growth is happening at 50%-100% annually.Chips market is largely dominated by the unorganized sector in India. Heavy promotions by branded chipmakers (like offering free gifts. So. 14 . However in the organized sector. The organized market for chips is estimated to be 6500 tons valued at Rs. The market for branded chips has been growing at a fast pace of around 20-25 % annually. The market is forecasted to reach a value of $459 million in 2006. toys etc with these products). In the last 4-5 years. the organized market has grown considerably catering to upper/ middle class consumers in the urban areas. As per the views of MR.2 bn. These products are manufactured locally and sold loose or in ordinary Polly-pouches. the overall growth in the snacks food segment is happening between 10%-15% annually. L. however.M AGARWAL (Executive Director of SM FOODS the manufacturers of PEPPY/PIKNIK) today the trend is shifting from unorganized to organized. has led to a major shift from unbranded to branded products. Established patterns are slowly giving way to more streamlined operations.1: Overview of the Indian Snack Food Business a) Organized Sector Due to a relatively limited number of outlets and resultant low total sales. Most distributors have a localized distribution area limited to a large metropolitan city and adjoining smaller cities. each handling three to four products. "Indian Super Markets" deal with more than 400 distributors or suppliers.3. 15 . Typically. such as importers sourcing mixed containers directly from the country of origin and larger retailers sourcing products directly through importers. most organized retailers source their imported products through distributors.1.2 Market Structure Table 1. .K. Germany. Malaysia. China.b) Unorganized Sector The unorganized sector sources most of its product from the local industry. Indonesia. with the overall share of imported food products almost negligible. The main difference is that most retailers source from distributors. South Korea. Singapore. 6-12% for local). Major exporters of snack foods/food ingredients to India are the United States. c) Import Market India’s imports of snacks/snack food ingredients rose from $10 million in CY 2002 to $30 million in CY 2006 (chart 1). Food items under the sweet snack category constituted the major share of imports and imports rose from $10 million to $29 million (94 percent of total imports in CY 2006). South Africa and Portugal. The share of imported food products currently handled by these retailers is increasing because of the products’ higher sales margin (1520% vs. 16 . A significant share of imported food products in the traditional market come s through illegal channels. Australia. Switzerland. UAE. U. Thailand. Imported consumer food products are restricted to traditional outlets in the up-market segment of the larger cities that cater to upper-middle income classes of consumers. popcorn (microwaveable package & ex 17 .Source: Directorate General of Commercial Intelligence and Statistics. Snack foods that registered significant growth in U. snack foods to India increased almost ten times over the past six years.000 in CY 2002 to $5 million in CY 2007. while quantity grew from 347 MT to 2. snack food imports rose from $570. it is growing rapidly2. Figure 1. snack food in total imports of snack foods is small. exports from CY 2002 to CY 2007 were potato chips (prepared/preserved). confectionery (containing sweetening agent instead of sugar).S.2: Total Import of Snack Foods/Snack Food Ingredients in India CY 2006 Although the share of U.S. The value of U.S.S.374 MT. Exports of U. GOI. followed by the North. 1. the market size for the food consumption category in India is expected to grow from $155 billion in 2005 to $344 billion in 2025 at a compound annual growth rate of 4. Western India is the top snack consuming region.000 to $253.000 to $936. Imports of potato chips rose from $332.1%. chewing gum (whether or not sugar coated).3 Consumption Behavior The average annual per capita consumption of commercial savory snacks is 500 gm with urban consumers consuming 10 times more than rural consumers. falling poverty. confectionary.3. confectionary and popcorn constituted almost 68 percent of India’s snack food imports from the United States. With rising disposable income 3.000 and confectionary (sweetening agent) rose from $70. Growing incomes. consumer spending on food continues to increase.000. changing lifestyles and companies racing to capture India’s middle and upper middle class consumers will cause the food market to evolve dramatically in the coming years. 18 .000 in CY 2002 to $2 million in CY 2007. popcorn rose from $454. cookies (sweet biscuits). According to a research study by McKinsey & Co. corn chips and similar crisp savory snacks. In CY 2007 potato chips.seed). sweetmeats (without containing cocoa). 3.4 Opportunities and Challenges Consumers are willing to pay a premium for both value added private and branded products creating immense opportunities for manufacturers and retailers. Table 1.1. There is a widespread recognition in India that consumers are likely to replace light meals with snacks.2: Opportunities and Challenges 19 . Cheetos (snack balls). Ne Place etc 20 . Veggie Treat. Uncle Chips and Nutyumz (nut snacks). Frito-Lay India: Its products included Leher Namkeens.Peppy and Piknik. However the branded segment has been increasing rapidly lead by the revolution carried out by market leaders Haldiram Foods and Frito Lay-India.3.5 Existing Competition The Salty snacks market in India is very diverse largely comprising of an unbranded segment which comprises of home made namkeens. mithai shops and loose namkeens.1. it had Protein Pin. it had sub brands such as Cheese Balls. Hi Protein Crispies. 3. Other major players in the branded market include: 1. Mixtures and Minerette. SM Foods: Under two main brands . Leher Kurkure (snack sticks). Under Peppy. Potato Rackets. Under Piknik. Junior and Corn Puffs. Lays (flavored Chips). Ringos. 4. Mc Fills-India: Ne time. Hearts. Haldiram Foods 2. Ne where. Indians in the western 21 . Quoting the study by McKinsey&Co.1 per cent. The unorganised snacks market is worth US$ 1.4 POTATO WAFERS AND CHIPS According to a study by McKinsey&Co. and has an annual growth rate of 15-20 per cent. There is a big market for snacks in India as urban Indian consumers eat readymade snacks 10 times more than their rural counterparts. the report said. Potato chips and potato-based items are the most popular products with more than 85 per cent share of the salty snack market.000 types of snacks and another 300 types of savouries being sold in the Indian market today. with a growth rate of 7-8 per cent per year. Pepsi and Haldiram's are some of the leading players. a report by the US Department of Agriculture stated "The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1. the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. There are approximately 1." The Indian snacks market is worth around US$ 3 billion. In the organised potato chips market. with the organised segment taking half the market share.56 billion. With the 22 . "Consumers are willing to pay a premium for both value-added private and branded products. The potato chips and wafers are popular processed food items that give considerable value addition to potatoes. It is grown all over the country with Uttar Pradesh growing the maximum quantity. calcium. potato today increasingly finds use in the form of chips or wafers as snacks food. Potato is probably the most popular food item in the Indian diet and India is one of the largest producers of potato. The protein calorie ratio is high.” the report stated. Boiling potatoes increases their protein content and almost doubles their calcium content. alcohol. “There is a widespread recognition in India that consumers are likely to replace light meals with snacks. followed by the people in northern region. creating immense opportunities for manufacturers and retailers. Besides being used as a daily food item in various vegetable preparations. iron and some vitamin C & A. flour.” it further added. It also contains phosphorus. The rise of the 'snacking' phenomenon is now fairly well documented on an international scale. and dextrin and livestock fodder.regions eat the maximum amount of snacks. although the rate and extent of development do vary from country to country. Potato is a very rich source of starch. It is vastly consumed as a vegetable and is also used in various forms such as starch. while yield rose by 267% and overall output jumped by 146%. Its wide adaptability in planting and harvesting makes it an ideal crop to grow between two major crops. 23 . Furthermore. With this background. consumers are increasingly tending to eat a number of smaller snacks during the day rather than three full meals. the potato wafers and chips market seems to hold good growth prospects. restaurants.1 percent to a record 32.breakdown of formal meals. potato chips account for an average of 35% of the total savory snacks market. the area under potato rose by almost 547% since the 50s. hotels. According to global snack market analysis. in an increasingly fast paced financially well-off society there is growing demand for snacks that are easy to buy. potato production (which is a Rabi or winter crop) is estimated to be around 28 million tonne as against 25 million tonne achieved last year. mainly due to strong demand from the processing industry and remunerative returns. In 2008-09. with an increasing number being eaten 'on the move'. army establishments require potato chips in significant quantities. India's potato production has seen a phenomenal increase since the 1950s. Potato is a highly nutritive food and the crop can be produced in 90 to 100 days. According to the Central Potato Research Institute (CPRI). Besides. The main consumers of potato chips and wafers are families especially in urban and semi-urban areas. canteens. India' potato output is likely to rise by 5. store and eat.7 million tones in 2009/10. West Bengal. Maldives. cheese balls 24 . and Kuwait etc. According to a projection by Euro monitor International. Western segment (potato chips. chanachur and the like).500 crore. followed by North America and Latin America. Singapore. The organized snacks category is sub-divided into the traditional segment (bhujia. Potato chips are estimated to constitute nearly 85% of India’s total salty snack food market of about Rs 2. Production wise India has always remained in the top ten since last twenty years. Europe is the largest per capita consumer. and Bihar accounting for more than 75 percent of area under cultivation and about 80 percent of total production.5% to the world’s production. The overall size of the snack food market is estimated at Rs 45 to Rs 50 billion. Mauritius. Nepal. followed by Haldiram at 27% and ITC at 16%.India ranks third contributing around 7. Fresh potatoes are exported to Sri Lanka. The market is reported to be growing at 7 to 8 % annually. the branded snacks market would reach a value of Rs 35 billion by 2012. The branded snacks market accounted for 16% by value and 12% by volume sales in 2007. In the Rs 19 billion branded(organized )snacks market. The states of Uttar Pradesh. constituting over 40% of the market by value. Frito-Lay is estimated to command a market share of 45%. UAE. ) and the newly established finger snacks segment. Potato is probably the most popular food item in the Indian diet. Ruffles. Bingos and others.1 Overview In India around 12 million tonnes of potato is grown which is about 4% of the total world production.4.1 per cent according to market survey. Bennie’s. the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. The leading brands in the market are Lays. Looking to the estimated demand of nearly 50 million tonne of potato by 2020. The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4. However. for a nearly 1. which is an adaptation of traditional offerings in the western format. creating immense opportunities for manufacturers and retailers in this sector. It is grown all 25 . According to a study by McKinsey & Co. With a growing population and rising per capita income with different lifestyles consumers are willing to pay a premium for both value-added private and branded products. Uncle Chips.etc. the production and productivity will keep rising.3 million population. the per capita consumption of potatoes is low. 1. And thus came it being the Potato Chips and Wafers.over the country with Uttar Pradesh growing the maximum quantity. Potato wafers and chips are one such products. He apparently invented it in 1853 in his restaurant . type of packing. It also contains phosphorus. calcium. The urban legend goes like this that George Crum was angered when a customer returned his french fried potatoes to the kitchen for being too thick.2 History According to snack food folklore.Moon's Lake House in Saratoga Spring. Crum shaved them paper thin and sent the plate back out. which are spoiled due to various reasons such as transportation.4. fried quickly in oil and then salted 1. New York. the potato chips and the wafers were the fanciful creation of a certain chef called George Crum. It is estimated that 25% of the potatoes. could be saved by making various preserved potato products. Potato is a very rich source of starch. Potato wafers and chips are thin slices of potato.. non-availability of cold storage capacities during harvesting season. glut in the market etc. iron and some vitamins. 26 . 4. or snack. there is a number of companies from both the organized as well as unorganized sector who are already catering to the needs of tea stalls. Owing to this. railway stations. relished in almost all the parts of the world. Still there is a huge demand to be met for these products in interior and remote places in different parts of the country. restaurants. In India it is being produced not only on large scale by big firms. There exists consumer as well as bulk markets for potato wafers and chips even in far flung rural areas owing primarily to the following reasons:• • • • • Rapid urbanisation and improving standards of living Easy availability Convenient packaging Affordable prices Nutritious values 27 . but also on cottage/home scale in semi-urban and rural areas. tourist places etc.1. They serve as an appetizer.3 Market Potential Potato Wafers and Chips are one of the most celebrated in the Ready To Eat munchies market. side dish. 5 Manufacturing Process The simplest chips of the kind that are just cooked and salted. cheese or 28 . 1. spices. basket sieve. those potatoes should be brought to the room temperature and be used only after 2448 hours. The equipments and gadgets used for the above processing are easily available locally and they include potato slicer. blancher made of aluminium or stainless steel.Though there exists some international as well as national brands but majority of the market base is under the control of local manufacturers. but manufacturers can add a wide variety of seasonings of herbs. pouch sealing machine and weighing scale. With proper strategy and network. 1. deep fat frier. cold stored potatoes are to be used for chips making.4 Production Process For the production of good quality chips. it is possible to penetrate the market. the public's increased demand for low-fat foods has put manufacturers on a fast track to produce a reduced-calorie chip that pleases the palate as well. Whenever. However. the potatoes should have less sugar content. Potato chips show no sign of declining in popularity. peeler.4. dehydrator.4. artificial additives. After drying. Potato wafers must be manufactured in a scientific manner and under hygienic conditions.Afterwards they are cut in the required sizes on slicing machine. Washing and Peeling . Then these potatoes are trimmed and put in brine water for 30-35 minutes to prevent browning Packaging .Then the blanched potatoes are placed on drying trays which are then put in the drying machine.Fully grown and ripe potatoes are firstly thoroughly washed before peeling them with the help of a peeler. spicy mixture is sprayed as per required taste. The production process mainly comprises of the following steps:Slicing and Blanching .The fried potato wafers are then kept on the sieve to remove excess of oil. These slices are blanched in boiling water Drying and Frying . cooled and other ingredients like salts. 29 . they are fried in edible oil to make them crisp and brown. Cooled potato wafers are then packed in polythene bag. Temperature of dryer is maintained in the range of 140 to 150O F. potato chips account for an average of 35% of the total savory snacks market. with an increasing number being eaten 'on the move'. consumers are increasingly tending to eat a number of smaller snacks during the day rather than three full meals. 1. With this background. According snack market analysis. the potato wafers and chips market seems to hold good growth prospects.6 Quality Control Process • Preventing breakage must be a primary goal of the producer and to ensure minimum breakage companies should install safeguards at various points of the production process • The color is compared to charts that show acceptable chip colors across the processed food industry norms • The quality inspectors should also check the chips for salt.4. store and eat. color.7 Global Perspective The rise of the 'snacking' phenomenon is now fairly well documented on an international scale. in an increasingly fast paced financially well-off society there is growing demand for snacks that are easy to buy. moisture. seasoning. and overall flavor. 30 .1. although the rate and extent of development do vary from country to country. Furthermore. With the breakdown of formal meals.4. the Indian food habits which account for very high proportion of potato consumption as vegetable. Potato processing in India was negligible at the beginning of 21st century. However. 31 . Besides several potato processors in the unorganised sector. this was an inflection point when potato processing industry in India started taking big strides.5 times the quantity consumed by organised players. Potato King.Diversification of potato consumption was widely discussed as a tool for avoiding situation of potato over-production. However. Frito Lay India. Haldiram. Balaji Wafers and McCain India were some of the big names in the organised sector that either expanded their manufacturing capacities or established new plants.39 mt of potatoes to processing during 2005-06. With such results organised processors used to put 0. Assuming the widely accepted output proportion of potato processing under unorganised (60%) and organised sector (40%). in early 1990s’ CPRI focussed on developing processing varieties of potato and the results were visible in the first decade of the new millennium. Consequently. the total quantity of potatoes put to processing is nearly 2. was an impediment. ) TSMC got its start in Hsinchu. Out of the total potato processing in India nearly 89% was consumed by potato chips followed by 9% by the potato flakes and 2% by French fries industry. ITC.8 Success Story The success story of early birds tempted other players to enter the market and Gee Pee Foods. and that helped contribute to Taiwan’s rise in the chip industry: Today there are more fabless chip-design houses in Taiwan than anywhere else in the world except the U. Little Bee Impex. The world’s biggest chip foundry is Taiwan Semiconductor Manufacturing Co..S. but just in case – it’s a chipmaker that produces semiconductors not under its own brand name but for other customers. (Anybody interested enough in technology to read the Asiatech blog probably knows what a “foundry” is. Merino Group and others also decided to seize this business opportunity. aka TSMC.1. Taiwan’s premier hi-tech park. The unorganised sector showed the same growth as that of the organised one. In the 1990s. TSMC set 32 . Even the established potato processors further expanded their processing capacities. with the result the potato tuber consumption by organised processors reached 0.4. and TSMC’s decisions on where to do business are good indicators of where the semiconductor industry as a whole is moving.97 mt during 2009-10 which was slightly less than 3% of corresponding potato production in India. too. in the Monday press release announcing the move: “TSMC recognizes the potential of the region and is opening an office as a part of its ongoing charter to develop the semiconductor ecosystem. so TSMC’s commitment to Bangalore is hardly the sort of billion-dollar bet that it has made on Shanghai. Business Development Director for TSMC North America. for instance. there’s reason to worry that the Indian government might still mess things up. So for anybody betting on India’s chances to become a player in the semiconductor industry. Yes. Such fabs cost billions and billions of dollars and the payoff is very uncertain – TSMC makes nice profits but not many other foundries do. Still. India’s chip designers are doing well even though the country doesn’t have fabs like those in East Asia. it’s just an office. Right now. Now China. the company clearly thinks that it needs to stay in touch more with Indian chip designers. not a fab. the news this week that TSMC is opening its first Indian office is very good indeed.” That said. lost $111 million in 2005 and analysts estimate that it lost another $60 million or so last 33 . Shanghai-based SMIC. Here’s a comment from Sajiv Dalal.up fabs in two other tech hotspots. And a few years ago. has an up-and-coming chip-design sector. TSMC became the first Taiwanese chipmaker to set up a fab in China. Singapore and Washington State. he added.year. on a visit to Hyderabad. calling for Indians to devote more resources to. building lots of mega-expensive fabs: ‘The critical mass for the Indian semiconductor industry has been reached. Yet here’s a top official in Prime Minister Singh’s government (as reported in The Hindu). sure enough. said Prithiviraj Chavan. The time is now — and the place is Hyderabad’. on the concluding day of the Indian Semiconductor Association’s Vision Summit. here. over and above the incentives that special economic zones or state governments might offer. Minister of State in the Prime Minister’s Office. The long awaited national semiconductor manufacturing policy is expected to be released before the union budget later this month — and it would offer direct subsidies for qualifying players. He lauded the Andhra Pradesh Government initiative to set up India’s first Fab City: `We are moving from fab-less to fabulous’ he quipped 34 . CHAPTER 2 BRANDS IN INDIAN SNACKS INDUSTRY 35 . Basically we intend to find out the most popular flavor of Lay’s in the market from our sample. 2.2.1 FRITO LAY’S The project purports to decipher the satisfaction level as well as the preferences of consumers pertaining to the various flavors of Lay’s a new range of savory snacks launched by C. Snacks as such are sector is largely unorganized. Here we will also look into the market For this a survey was conducted in Mumbai where respondents were asked to fill a questionnaire. The data was collected and analyzed to obtain conclusions This report carries an introduction of the company profile. detail of the methodology followed detailed data analysis and the results so obtained with the variety of graphs along with given. The aim to analyze the success. Snacks as such are a very minor part of the food processing industry because snacks sample. marketability and future growth prospects of Lay’s.1 History 36 .1. Brands in Indian Snacks Industry 2. Lay's is the brand name for a number of potato chip varieties as well as the name of the company that founded the chip brand in 1938. Lay's chips are marketed as a division of Frito-Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Lay group include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels. In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee and, in 1938, he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food Company," renaming it "H.W. Lay & Company." Lay criss-crossed the Southern United States selling the product from the trunk of his car. In 1942, Lay introduced the first continuous potato processor, resulting in the first large-scale production of the product. The business shortened its name to "the Lay's Company" in 1944 and became the first Snack food manufacturer to purchase television commercials, with Bert Lahr as a celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the chips' first slogan along with "de-Lay-sious!" As the popular commercials aired during the 1950s, Lay's went national in its marketing and was soon supplying product throughout the United States. 37 In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-Lay Inc., a snack food giant with combined sales of over $127 million annually, the largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan "betcha you can't eat just one." Sales of the chips became international, with marketing assisted by a number of celebrity endorsers. In 1965, Frito-Lay merged with the Pepsi Cola Company to form PepsiCo, Inc. and a barbecue version of the chips appeared on grocery shelves. A new formulation of chip was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the company introduced the "Wavy Lays" products to grocer shelves. In the mid to late 1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece," named after a popular sauce, and introduced a lower calorie baked version and a variety that was completely fat-free (Lay's WOW chips containing the fat substitute olestra). In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax that was intended to compete with Pringles, and the company began introducing a variety of additional flavor variations. Frito-Lay products presently control 55% of the United States salty foods marketplace. 2.1.2 Flavors 38 Except for barbecue-flavor potato chips, which were introduced no later than 1958, up until the last 20 years, the only flavor of potato chips had been the conventional one. Despite an explosion of new flavors, the unadorned original is still the selection of 81% of consumers. In the United States, Lay's offers a number of flavor combinations, in addition to the classic chips. Flavored products in the traditional fried varieties include sour cream & Onion, Barbecue, cheddar & sour cream, Hidden Valley Ranch, salt & vinegar, salt & pepper, Flamin' Hot, dill pickle, Limon (Lime) and a thicker "Deli style" chip. Canadian sellers have a number of varied flavors, with curry, ketchup, poutine, pizza, Fire’s Gravy, roast chicken, Smokey bacon, salsa, wasabi, spicy Indian masala and sea salt and pepper brands available. The marketing success of these flavors in Canada sometimes leads to a limited time offering of a flavor to the south, with the dill pickle recently appearing in the United States after a successful run. Interestingly the name 'sour cream' has got Lay's into a lot of confusion in some countries. In India for instance the name was changed to American style cream and onion after consumers reported their discomfort with the idea of 'sour' cream In the baked products, there are classic, barbecue and sour cream & onion varieties. The kettle cooked version includes original, sea salt & vinegar, mesquite barbecue and jalapeño brands. Wavy 39 Lay's have original, hickory barbecue, ranch and Au Gratin flavors while Lay's Stax offers original, sour cream & onion, cheddar, barbecue, ranch, pizza and salt & vinegar. The newest variety, Lay's Natural has thick cut barbecue and sea salt brands The WOW! Brand was rebranded in 2004 as Lay's light after the olestra formula was altered and the U.S. Food and Drug Administration allowed removal of warnings about various health consequences of the fat substitute. Outside North America, Lay's in Greece and Cyprus are made and packed by Tasty Foods and Carina Snacks LTD, with Mediterranean flavors which include Feta cheese flavor, Tzatziki flavor, Olive and Tomato, Oregano, Sea Salt & Black Pepper and various more. There are hundreds of sub-variations of the Mediterranean line and the company performs Constant experimentations to create new flavors and adjust them to each country's liking. In some countries such as Argentina variations of the Mediterranean tastes exist include Olive Oil and Parmesan Cheese, Olive Oil and Tomato, Olive Oil and Basil, Greek Tzatziki Cheese with onions, Lasagna, Beef Capriccio with Parmeggiano and Smoked Manchego Cheese. In Belgium there is a version of Cucumber and Goats Cheese. Finally in Chile 40 Onion and Cheese. Spicy Chili Squid. and Ham & cheese flavors) and some international "Lay's" flavors plus Russian "Lay's" flavor . Pakistan. sweet corn and cotija cheese brand can be found in South America. In Australia. Basil. Original. Under the Smith's label in Australia. Lay's flavored products are sold with the 41 . Also there is Lays Appetite which is also part of lays and has the following flavors Kebab. Pepper and Cheese. Crab and Red caviar. Original. Sour cream & Cheese. Flavors featured in Thailand include Nori Seaweed." This flavor is very popular in India. Greek kebab and Marmite yeast extract. Hot pepper. In parts of South America (notably Argentina and Uruguay).there is a version of Lemon and Cilantro (Coriander) and Sour Cream and Onions. Chicken. Sour cream & Onion. Paprika. and Bangladesh. beef & onion. There are a number of unique products in the United Kingdom sold under the Walkers label. Ketchup. Another flavor sold primarily in southern Asia is called "Magic Masala. In Poland the chips flavors are: Green Onion. unique flavors include Greek Feta & Herb and Italian Tomato & Basil. and Spicy Seafood. Mushrooms & Sour Cream. Forage. Russia has "Lay's MAX" chips (Chicken. Squid.Mushrooms & Sour cream. new potatoes with basil. Seafood and Mayonnaise. a cilantro version exists while a hot & sweet chili. including prawn cocktail. Flavors also come and go usually with an international theme. Ketchup (dark red). and sour cream and green onion. and oregano. Soy Sauce. Popular flavors are often kept in circulation longer. Sea Salt & Pepper (silver). There are currently 12 regular Lay's flavors in Canada. Also traditional "Thai" flavors include Tom Yum. with flavors like queso andino (Andean cheese). for example: French Mayonnaise. In Ukraine there is crab. Thai Chili Paste. Peru has "Lay's Sabores Peruanos" (Lay's Peruvian Flavors). Bacon & Cheese (America). Lobster. bacon."Lay's Mediterranean" label. In Thailand there is Classic. Sour Cream & Onion (green). Sour Cream & Onion. Balsamic Vinegar and Salt (England). in select Canadian 42 . also recently was released Lay's Dips. Garlic Soft Shelled Crab (Hong Kong). though there are more. Salmon Teriyaki (Japan). Thai Seafood Dip. tomato Parmesan. Chili and Lime. and And Japanese Nori Seaweed. cheddar. Roast Chicken (light brown) and finally Lightly Salted (bright blue). Mexican Bar-B-Q. The flavors available nationwide are the following: Classic (yellow). Also. available only in certain parts of the country. BarBQ (black). Smokey Bacon (brown). tomato and basil. and include such flavors as ham. Wavy Original (red). Dill Pickle (bright green). Salt & Vinegar (teal). Cheese & Onion. that includes a "Peruvian Criollo Chili" sauce sachet. 2.markets (Toronto & Vancouver) Lay's has introduced international flavors such as "Spicy Curry" and "Spicy Indian Masala" to appeal to a wider consumer group. It is rated among the World's Best Big Companies.2 ITC LIMITED 2. It is rated amongst the 'World's Best Big Companies' by Forbes magazine. ITC is one of India's largest private sector companies with a turnover of over US$ 4. ITC employs over 20. ITC Limited was incorporated on 24 August 1910 as the Imperial Tobacco Company of India Limited.1 Company Overview Bingo is a brand owned by ITC Foods Limited. in a study conducted by Brand Finance and published by the Economic Times. 43 . ITC also ranks among India's top 10 `Most Valuable (Company) Brands'.2.000 people at more than 60 locations across India.75 billion. Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine. the company's name was changed to ITC Limited in 1974. among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC has a diversified presence in Cigarettes. As one of India's most valuable and respected corporations. Hotels. Packaging. While ITC is an outstanding market leader in its traditional businesses of Cigarettes. Packaged Foods & Confectionery. Information Technology. Personal Care. Branded Apparel. In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. Branded Apparel and Stationery. Stationery. ITC is widely perceived to be dedicated to the nation. Safety matches and other FMCG products. effective 44 . ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part. it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". Packaging and Agri-Exports. Paperboards. Agri-Business. superior brand-building capabilities. Paperboards & Specialty Papers." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach. Hotels. the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. safety and environment management systems. Over time. which has already become the subject matter of a case study at Harvard Business School. productivity. ITC's production facilities and hotels have won numerous national and international awards for quality. This transformational strategy. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC's wholly owned IT subsidiary. significantly enhancing the Company's marketing reach. ITC Infotech India Limited. including e-enabled services and business process outsourcing. is aggressively pursuing emerging opportunities in providing end-to-end IT solutions. 45 .supply chain management and acknowledged service skills in the hospitality industry. The Company's 'eChoupal' initiative is enabling the Indian agriculture sector to significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. is expected to progressively create for ITC a huge rural distribution infrastructure. ITC is one of the country's biggest foreign exchange earners. ITC was the first company in India to voluntarily seek a corporate governance rating. though it is very early to say that whether ITC could sustain such a growth in long term with so many flavors. 88. For the nation. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. Within a month of launch of Initial advertisement. For the Shareholder. Most of the advertisements of Bingo were considered vague and stupid but we feel that was the best form of communication any marketing company has ever done. Main aim of ITC Bingo Advertisement was to create buzz among customers.000 shareholders." 2. fulfill the aspirations of its stakeholders and meet societal expectations. Brand recall along with 17 flavours in three SKUs helped ITC to capture 16% of market share in just 18 months.2.2 ITC’s Strategy in Launching Bingo Bingo was launched in India on Mar14.The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3. 2007 during the world cup time. This is the latest advertisement of Bingo chips. The major problem with so many flavors is that if a person doesn’t like 46 . 70% of the viewers could recall the brand name and that was their main aim. any of the flavors. 47 . Additionally a southinspired dairy option has also been introduced under the potato chips offering. The primary target of Bingo is 18-30 year old people. So much diversification might come in the path of ITC’s growth in the snacks business. Each offering under this segment is available in two variants making it a total of 6 products in the Finger Snacks portfolio. who are willing to try out new flavors more easily than the small kids. The initial offering from Bingo includes an array of products in both Potato Chips & Finger Snacks segment. The segmentation was mainly done on the basis of age if the people. Khakra inspired Mad Angles and specially developed time pass snack in the form of Tedhe Medhe. The offering under the Finger Snacks segment are equally unique presentation with innovative finger foods like the pakoda inspired Live Wires. The Potato Chips offering comprise of four innovative variants inspired by the snacking habits of different parts of the country as well as Masala. Bingo is positioned as a youthful and innovative snack. he will not even try other flavors. salted and Tomato favorers. 000 retailers across the country. Within six moths of launch Bingo was available in more than 2. to display the brand at all points of sale. The racks created so much impact that even competitors like market leader Frito-Lay’s introduced its own version of water racks. Now Firto Lays has launched small packs of Rs. Big Bazaar and Khishore Biyani’s Fair Prices etc. The Company distributes more than 4 lakh large racks. ITC with Bingo adopted a Market Challenger strategy and chose a combination of flank and frontal attack against the market leader Frito Lay’s. Bingo’s website (www. 48 .In a survey done by ITC. 5. 3. Let us see whether ITC can leverage upon its huge distribution network covering panwaalas to small kirana shops with a similar small pack of Rs. Initially Bingo sponsored many Bingo Remix night in various clubs.bingonbingo. Initial pricing of ITC bingo is directly frontal attack on Frito lays with pricing of Rs. 10 and 20. ITC made a strategic alliance with Future group according to which all retail stores of Future group like Food Bazaar. 50. golgappas etc. 3. will store only ITC Bingo.com) is a unique site with information about Bingo and its flavors. it has been found that 70% of respondents liked Indian flavors like bhel. Ravi Naware. The other major threat could be preference of people toward healthy snacks. Water style etc. Lays has revamped its branding strategy with new promotions featuring actress like Juhi Chawla. There seems to be potential problems like hug competition by Frito lays and haldiram. Lays has launched Indian flavors like Lay’s Chat street. India’s mint Mischief. Kareena Kapoor etc.With the rise of ITC bingo in no time. its seems to be very difficult goal. chat Time Achievers campaign in which consumers could send their recipes using Kurkure. Players like Balaji might expand into national terrority or it could be bought over by players like lays. rest of the market is dominated by few regional players like Balaji. Frito Lays again launched a new consumer promotion campaign. These are some of the hypothetical problems that might erupt in recent times but as of now ITC Bingo has a happy story to state. chief executive officer of ITC foods said “We are getting ready to lunch a media – blitz for Bingo next month. Now with the growth of ITC Bingo. We forayed into this sector in March 2007 and our market share today stands at 16% our goal is to capture a 50% share in this sector “As of now Indian snack industry is about 2500 cross. About 35 AC BEST buses in Mumbai and metro in Kolkata are now branded by Kurkure. 49 . Frito lays has 48% Haldirams has 25% market share and ITC bingo has 16% share. It had come a long way since its relatively humble beginning in 1937 as a small time sweet shop in Bikaner. the turnover of the Haldiram's was Rs. 50 . In 2001.2. Namkeens remain the main focus area for the group. The group had presence not only in India but in several countries all over the world. contributing close to 60% of its total revenues. Haldiram's had many 'firsts' to its credit. the Haldiram's Group (Haldiram's) had emerged as a household name for ready-to-eat snack foods in India.400 Crore. the brand 'Haldiram's' had been renowned for its quality products.3 HALDIRAM FOODS Over a period spanning 65 years. Rajasthan. The group also pioneered new ways of packaging namkeens its packaging techniques increased the shelf life of namkeens from less than a week to more than six months. It was the first company in India to brand 'namkeens'. Since the very beginning. The company employed the best available technology in all its manufacturing facilities in India. The company offered a wide variety of traditional Indian sweets and snacks at competitive prices that appealed to people belonging to different age groups. This just show that Haldiram’s has come a long way from being the heavy-weight market leaders. Nagpur and Bikaner (branded as “Bikaji “) these firms are separate entities managed by 4 different brothers. Kolkata.4 PARLE MONACO SMART CHIPS Parle Monaco Smart Chips eyeing 10-15% market share in the health snacks category. based at Delhi. In our interview with the Haldiram’s Marketing Representative at the Mumbai Office.This is due to different regional markets. While the Nagpur unit manufactures 51 different varieties of namkeens. has entered in the health snack food category with the launch of Monaco ‘Smart 51 .Haldiram’s. and have now realized the importance and threat of competition 2.Haldiram’s has got 4 firms. we were informed that Haldiram’s invests in R & D at the rate of churning out 2-3 products every 2 months. India’s largest biscuit and confectionary manufacturer. the Kolkata unit manufactures 37 and the Delhi unit 25 . Parle Products. and the varying tastes. 3 of them (given below) use the same brand name . The raw materials used to prepare namkeens are of best quality and sourced from all over India. and Thought shop. Parle Monaco has been a leading brand in snacks for a long time. Parle Products said. we realized that there 52 . I am sure that our brand will do well in the market. Parle Products said “Over the last few years.Chips’. We expect Smart Chips will become a significant ‘category benchmark’. The company is also coming up with a huge campaign for the new launch featuring Parle Monaco’s brand ambassador .fried chips. GM. we have been looking to expand the product portfolio at Parle by introducing newer categories in biscuits as well as exploring options beyond biscuits. With this launch Parle is eyeing 25-30% market share in the domestic market in next 2-3 years. Shalin Desai. glucose biscuits) and ‘feel good’ (indulgent snacks) categories.” Commenting on the launch Mr. The campaign is developed by Vipin Dhyani. driving sales for healthy snacks within snacks categories.Aamir Khan. Founder & Creative Director. Speaking on the launch Praveen Kulkarni. Smart chips will be available in four flavors and will be positioned as non. With its new variant ‘Monaco Smart Chips’ they have tried to fuse together the ‘do good’ (Marie. “The category is new and is growing at a fast pace. As per our studies. Brand Manager. The consumer today wants a product that satisfies both the needs. Sr. We are aiming to grab 1015% market share with the brand extension. and is growing at 15-20 per cent yearly. The unorganized sector. with the branded snack market at $1. worth $1. Simply Salted. Smart Chips.56 billion. is also growing at 7-8 per cent. 53 . provide foodies with an option of a healthy snack that satiates their taste buds too.exists a gap with snacks which are ‘fun’ to eat and ‘healthy’ to eat. Monaco has been associated with the snack category for a long time and with this brand extension we wanted to capitalize on the high recall value of the brand. so being an early entrant we would like to capitalize on an early mover advantage. Smart Chips will be available in four exciting flavors – Macho Masala. Today’s consumers are health conscious and most of the products available in the market are not healthy.34 billion. These are not fried chips and priced at Rs 5 to Rs 10 for 25 Gms and 50gms respectively and they target a wide consumer faction ranging from youth to family groups. Tangy Tomato and Crazy Chat.” Parle has already diversified into the non biscuit snacks market with the launch of Musst Chips and Musst Stix in mid 2008. a part of the company’s expansion plans beyond biscuits. The snack food market in India is estimated to be worth $3 billion. CHAPTER 3 RESEARCH METHODOLOGY 54 . Frito Lay commands a share of 48%. In a market segment that is very fragmented we wanted to find out if a relatively new player could carve a niche for itself in the consumers mind.2 STATEMENT OF RESEARCH OBJECTIVES The main objectives of our research were as follows: To find out which brand of potato chips has the highest recognition and recall. ITC has launched Bingo in a wide variety of flavors and formats. our aim was to find out consumer perceptions of Bingo. to get down to basics. RESEARCH METHODOLOGY 3. ranging from potato chips to finger snacks.3.1 NEED AND SIGNIFICANCE In the branded snacks market. wannabes and many regional players. The rest is divided between a handful of new entrants. Because of its different and catchy advertisements Bingo has created a buzz in the market. 55 . which was launched in 2007. followed by Haldiram’s at 25% and ITC at 16%. Out of these ITC’s Bingo is a relatively new entrant in the market. Therefore. 3. 56 .3 RESEARCH DESIGN: DESCRIPTIVE Research design is the basic framework which provides guidelines for the rest of research process. To compare Bingo to the market leader Lays 3.4 ANALYSIS OF DATA In order to extract meaningful information from the data collected. We have divided the analysis in two parts. My sample size is 80. 3. We conducted a survey in Mumbai. qualitative analysis and quantitative analysis. It specifies the methods for data collection and data analysis . an analysis of data was done.To find which is the most preferred snack brand and which is the least preferred.In this research project we have used the descriptive research design. Respondents in the sample were asked to fill questionnaires. CHAPTER 4 DATA INTERPRETATIO 57 . N AND ANALYSIS 1.1 Analysis of times consumed fast food 58 . Approximately. Deviation 2.023 Variance 4. how many times in the last week have you consumed fast food? Descriptive Statistics N how many times in the last week have you consumed fast food? Valid N (listwise) 80 Minimum Maximum 0 9 Mean 3.091 80 Table 4.90 Std. Please rate the following parameter that induces you in consuming fast food over normal food. we can interpret that an average 4 times in last couple of week respondents purchased and consumed fast food. 2. 59 .From the above table. 883 1.20 Deviation 1.403 Price Time Factor Hunger Taste Quantity Hygiene Valid (listwise) Table 4.544 3.571 2.061 3.15 6.961 2.015 1.27 7.847 4.484 2. please rate the following option according to your preference 60 .Descriptive Statistics Std. 3.845 Variance 3.25 6. When it comes to eating food.117 1.50 3. Whereas Hygiene factor is the least factor to be accounted while consuming fast food.30 4.2 Analysis of parameters inducing fast food over normal food From the above data we can analyze that Time factor is the most influencing factor among all the factors for inducing Fast Food followed by Taste and Hunger later. N 80 80 80 80 80 80 N 80 Minimum 1 2 4 1 1 1 Maximum 9 10 10 10 8 9 Mean 5.468 4. 232 1.285 1.800 1.4 Analysis of preference for packaged fast food * Age Crosstab 61 .28 2.134 1. Would you prefer packaged fast food over road side items? Count Age 0-18 Years 18-35 Years 35-55 Years Total 6 54 2 62 0 12 6 18 6 66 8 80 Would you prefer packaged fast Yes No food over road side items? Total Table 4.07 2.772 1.85 3.3 Analysis of parameters for consuming fast food From the above data we can analyze that Packaged Chips is the most preferred food among the above data followed by Burger and Frankie being the least preferred food item to be consumed.408 Table 4.342 1.40 Deviation 1.331 1.186 Variance 1. 4. N Sandwich 80 Vada-Pav 80 Burger 80 Frankie 80 Packaged Chips 80 Valid N 80 (listwise) Minimum 1 1 1 1 1 Maximum 5 5 5 5 5 Mean 3.Descriptive Statistics Std.73 3.518 1. 5 Analysis of preference for packaged fast food * Gender Crosstab 62 .1 Analysis of preference for packaged fast food * Age Crosstab From the above data we can analyze that considering the age factor only the most preferred age group which prefers packaged fast food over road side items is 0 – 18 age group.Figure 4. Count Gender Male Female 28 34 10 8 Total 62 18 Would you prefer packaged fast Yes No food over road side items? Total 38 42 80 Table 4. The second place is age group 18 – 35 and the least preferred is 35 – 55 year old age group. Figure 4.6 Analysis of preference for packaged fast food * Occupation Crosstab 63 . There is slight preference liking of females more as compared to Male’s in the above bar chart.2 Analysis of preference for packaged fast food * Gender Crosstab From the above data we can analyze that both genders Male and Female prefer packaged fast food over road side items. Occupation Housewife Service 0 12 2 10 2 22 Would you prefer packaged Yes No fast food over road side items? Total Business 2 0 2 Student 48 6 54 Total 62 18 80 Table 4. Service class is more or less equal but a slight higher on the yes side. Please rate the reasons for selecting packaged food on the following parameter 64 .Figure 4. Business class definitely prefers it and Students also prefer packaged fast food over road side items.3 Analysis of preference for packaged fast food * Occupation Crosstab From the above data we can analyze that Housewives do not prefer packaged fast food over road side items. 5. 6.42 5.7 Analysis of reasons for selecting packaged foods From the above data we can analyze that Hygiene factor has the highest factor while selecting a packaged fast food item. followed by Availability.840 1.556 3.Descriptive Statistics Std.387 3.203 2.074 2.896 2.163 Variance 4.270 2.28 7.854 3.42 1. On the scale of 1 to 5 (1-Very Bad and 5-Very Good) rate the following flavors according to your choice? 65 .678 Price Availability Taste Quantity Hygiene Packaging Advertising Influence Brand Name Valid N (listwise) 80 80 2 9 6.594 4.75 6.08 Deviation 2.437 Table 4.57 5.855 4.303 5. Whereas Advertising Influence and Taste surprisingly are the least factors to be considered by people consuming packaged fast food.135 1.152 4.27 6.73 6. N 80 80 80 80 80 80 80 Minimum 2 2 1 2 2 2 1 Maximum 10 10 10 10 10 10 10 Mean 6. 113 Variance 1.95 2.78 2.134 1.93 2.594 1.222 1.90 2.493 1.263 1. 7.98 Deviation 1.051 1.Descriptive Statistics Std.162 1. Salted and Tomato are the most preferred flavors whereas Spicy and Chilly are the least preferred.078 1.104 1. N Tomato 80 Cream & Onion 80 Salted 80 Spicy 80 Chilly 80 Cheese 80 Valid N 80 (listwise) Minimum 1 1 1 1 1 1 Maximum 5 5 5 5 5 5 Mean 2.8 Analysis of the most preferred flavour From the above data we can analyze that flavors such as Cheese.285 1.9 Analysis of willingness to try packaged fried chips * Age Crosstab 66 . Have you ever tried any of the packaged fried chips? Age 0-18 Years 18-35 Years 35-55 Years Total 6 62 6 74 0 4 2 6 6 66 8 80 Have you ever tried any of the packaged Yes No fried chips Total Table 4.240 Table 4.78 2. Figure 4.10 Analysis of willingness to try packaged fried chips * Gender Crosstab 67 .4 Analysis of willingness to try packaged fried chips * Age Crosstab From the above data we can analyze that all the age groups have mostly tried packaged fried chips the ratio is higher on 0 – 18 age group and lowest on 35 – 55 age group since behavioral patterns of the higher age people. Gender Male 36 2 38 Have you ever tried any of the Yes No packaged fried chips Total Female 38 4 42 Total 74 6 80 Table 4. Count Occupation Housewife Have you ever tried any of the Yes 2 No 0 packaged fried chips Total 2 Service 22 0 22 Business 2 0 2 Student 48 6 54 Total 74 6 80 Table 4.5 Analysis of willingness to try packaged fried chips * Gender Crosstab From the above data we can analyze that in case of gender wise both genders have tried packaged fried chips but the ratio is higher on Male side when compared to females.Figure 4.11 Analysis of willingness to try packaged fried chips * Occupation Crosstab 68 . Figure 4. 69 .6 Analysis of willingness to try packaged fried chips * Occupation Crosstab From the above data we can analyze that all the occupation have tried packaged fried Chips it is only in the Student’s that some of them have not tried it. 8. Did you like packaged fried chip? 70 .Brand Preference for Packaged Fried Chips Peppy 8% Balaji 5% Lays 42% Bingo 42% Halidram 3% Figure 4.7 Analysis of brand preference of packaged fried chips From the above data we can analyze that Brand Preference is highest and equal in Lays and Bingo followed by peppy. Balaji and Haldiram in ascending order. 12 Analysis of liking towards packaged fried chips * Age Crosstabs Figure 4.8 Analysis of liking towards packaged fried chips * Age Crosstabs From the above data we can analyze that Age wise 0 – 18 have 50% liking and 18 – 35 have the highest liking whereas age group 35 – 55 have the lowest liking.Did you like the packaged fried Yes No chip Total Age 0-18 Years 18-35 Years 35-55 Years Total 4 54 6 64 2 12 2 16 6 66 8 80 Table 4. 71 . 9 Analysis of liking towards packaged fried chips * Gender Crosstabs From the above data we can analyze that Gender wise the liking is on the highest side for both Male and Females but More higher on the Female side only when compared with Males.Count Gender Male 30 8 38 Female 34 8 42 Total 64 16 80 Did you like the packaged fried chip Yes No Total Table 4. 72 .13 Analysis of liking towards packaged fried chips * Gender Crosstabs Figure 4. 9.14 Analysis of liking towards packaged fried chips * Occupation Crosstabs Figure 4. Which branded packaged fried chip would you prefer among the following? 73 .10 Analysis of liking towards packaged fried chips * Occupation Crosstabs From the above data we can analyze that Occupation wise if we check then Housewives and Businessmen have definitely liked packaged fried chips but when checked in Service and Student liking is definitely there but not 100% as seen in others.Count Occupation Housewife Service 2 18 0 4 2 22 Business 2 0 2 Student 42 12 54 Total 64 16 80 Did you like packaged fried chip Total the Yes No Table 4. 091 .880 Bingo Lays Balaji Peppy Haldiram Valid (listwise) Table 4.938 Variance 1.15 Analysis of the most preferred brand From the above data we can analyze that Bingo is the highest preferred packaged fried chip followed by lays.60 2. Peppy and Balaji amounts to nearly the same and haldiram is the least preferred among these.88 2. 10.65 1. N 80 80 80 80 80 N 80 Minimum 1 1 1 1 1 Maximum 5 5 5 5 4 Mean 3. Will you be loyal to your most preferred packaged fried chip? Count Age 0-18 Years 18-35 Years 35-55 Years Total 2 26 6 34 4 40 2 46 6 66 8 80 Will you be loyal to your most Yes No preferred packaged fried chip? Total 74 .074 1.045 .478 .154 1.946 1.Descriptive Statistics Std.973 1.216 .63 2.93 Deviation 1. 11 Analysis of loyalty towards packaged fried chips * Age Crosstabs From the above table and Chart we can analyze that in terms of loyalty with packaged fried chip age groups does not matter much as we can see in all the age group ranging from 0-18 and 18-35 there is no loyalty and above that i.17 Analysis of loyalty towards packaged fried chips * Gender Crosstabs 75 .e 35-55 loyalty is visible.Table 4.16 Analysis of loyalty towards packaged fried chips * Age Crosstabs Figure 4. Count Gender Male 16 22 38 Female 18 24 42 Total 34 46 80 Will you be loyal to your most preferred packaged Yes No fried chip? Total Table 4. 18 Analysis of loyalty towards packaged fried chips * Occupation Crosstabs 76 . Count Occupation Housewife Service Will you be loyal to your most preferred packaged fried chip? Total Yes No 2 0 2 10 12 22 Business 0 2 2 Student 22 32 54 Total 34 46 80 Table 4.Figure 4.12 Analysis of loyalty towards packaged fried chips * Gender Crosstabs In the following case we can analyze that loyalty in terms of Gender is not applicable since in both cases male and female one cannot see any loyalty for the packaged fried chip. 77 . in Service it is nearly equal and Business Men are not loyal to their respective brand of Packaged Fried Chip. it can be quite clearly interpreted that House wives are loyal to the brand.Figure 4.13 Analysis of loyalty towards packaged fried chips * Occupation Crosstabs From the above table and figure. CHAPTER 5 MAJOR FINDINGS AND SUMMARY 5. MAJOR FINDINGS AND SUMMARY 5.1SUMMARY Since Bingo is a relatively new product and we wanted to gauge what kind of recall value it has and what are consumers’ perceptions towards it compared to 78 . On the parameters of quantity. Respondents clearly point out that they would not prefer Bingo when purchasing. The questionnaire was constructed using Likert scale and Henry’s Hierarchy. packaging and price they feel Bingo is as good as Lays. a majority of respondents prefer Bingo while Haldiram is the least preferred. We used the stratified sampling technique to conduct the survey. this in spite of having the second highest recall value. We have also given an overview of the Indian snack market and described ITC’s business activities in brief and their strategy in launching Bingo. 79 . Lays is the second most preferred brand when it comes to purchase decisions. 5. When it comes to purchase decisions.2 MAJOR FINDINGS I have found out that of all the snack brands Bingo has the highest recall value followed by Lays and then others.the market leader Lays. We conducted the study by interviewing people using questionnaires. Consumers feel that Bingo tastes much better than Lays. Our sample size was 100. Bingo has the highest brand recall 80 . SUGGESTION AND CONCLUSION After conducting the survey I am in a position to say that since its launch Bingo has been able to garner significant interest.CHAPTER 6 CONCLUSION 6. Consumers’ perceptions of the brand will have to be altered as they have to feel it is as good as or better than Lays in terms of taste and as a value for money product. 10 pack. Their ad campaigns so far have done an excellent job in creating hype around the brand has fortunately been able to live up to the expectations.com http://www.com 81 . BIBLOGRAPHY SME rating agency of India ltd.financialexpress. If Bingo has to take on Lays then it has to focus on improving the taste of its offering. Since it is considered to be as good as lays on other parameters but not on taste customers do feel like switching to it. But people who have tried Bingo feel that although it is comparable to Lays in terms of quantity.com/news/Just-munch-it/271873/0 www. packaging. compared to 30 grams for Lays it is still not perceived as having more quantity compared to Lays.allbusiness.itcportal. We would suggest that they advertise this fact. crunchiness and price its performance on the taste parameter is abysmal.courtesy its high decibel ad campaigns. www. Even though Bingo has recently increased its quantity from 30 grams to 45 grams for a Rs. 82 . Approximately.Annexure a) Questionnaire 1. Please rate the following parameter that induces you in consuming fast food over normal food. how many times in the last week have you consumed fast food? 0 1 2 3 4 5 More (Specify: _____) 2. 83 . Would you prefer packaged fast food over road side items? Yes No 5. please rate the following option according to your preference Very Low Sandwich Vada-Pav Burger Frankie Packaged Chips 12345 12345 12345 12345 12345 Very High 4. Please rate the reasons for selecting packaged food on the following parameter Very Low Very High 84 . When it comes to eating food.Very Low Very High Price Time factor Hunger Taste Quantity Hygiene 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 3. Have you ever tried any of the packaged fried chips Yes No If yes which one ___________________________________ 8. Did you like packaged fried chip? Yes No 85 . On the scale of 1 to 5 (1-Very Bad and 5-Very Good) rate the following flavors according to your choice? Tomato Cream and onion Salted Spicy Chilly Cheese 12345 12345 12345 12345 12345 12345 7.Price Availability Taste Quantity Hygiene Packaging Advertising Influence Brand Name 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 6. Table 1.2 LIST OF TABLES Title of the Table Page No. Overview of the Indian Snack Food Business 15 Opportunities and Challenges 19 Analysis of times consumed fast food 58 Analysis of parameters inducing fast food over normal 59 86 .2 Table 4. Will you be loyal to your most preferred packaged fried chip? Yes No Name: ___________________________ Contact: _____________________________ Age :__________ Occupation : Gender : Housewife Male Service Female Business Student Address: ____________________________________________________________ ____________________________________________________________ b) List of Tables Table No.1 Table 1.1 Table 4.9. Which branded packaged fried chip would you prefer among the following? Very Low Bingo Lays Balaji Peppy Haldiram 1 1 1 1 1 Low 2 2 2 2 2 Moderate 3 3 3 3 3 4 4 4 4 4 High 5 5 5 5 5 Very Most 10. 2 Figure 4.1 Figure 1.11 Table 4.9 Table 4.6 Table 4.Table 4.4 Table 4.5 Table 4.8 Table 4.16 Table 4.14 Table 4.15 Table 4.7 Table 4.3 Table 4. Figure 1.10 Table 4.1 LIST OF FIGURE Title of the Figure Potato Consumption in India Total Import of Snack Foods/Snack Food Ingredients in India CY 2006 Analysis of preference for packaged fast food * Age Crosstab 87 Page No.13 Table 4.18 food Analysis of parameters for consuming fast food Analysis of preference for packaged fast food * Age Crosstab Analysis of preference for packaged fast food * Gender Crosstab Analysis of preference for packaged fast food * Occupation Crosstab Analysis of reasons for selecting packaged foods Analysis of the most preferred flavor Analysis of willingness to try packaged fried chips * Age Crosstab Analysis of willingness to try packaged fried chips * Gender Crosstab Analysis of willingness to try packaged fried chips * Occupation Crosstab Analysis of liking towards packaged fried chips * Age Crosstabs Analysis of liking towards packaged fried chips * Gender Crosstabs Analysis of liking towards packaged fried chips * Occupation Crosstabs Analysis of the most preferred brand Analysis of loyalty towards packaged fried chips * Age Crosstabs Analysis of loyalty towards packaged fried chips * Gender Crosstabs Analysis of loyalty towards packaged fried chips * Occupation Crosstabs 60 61 62 63 64 65 66 67 68 70 71 72 73 74 75 76 c) List of Figures Figure No.17 Table 4.12 Table 4. 7 17 61 . 12 Figure 4.13 Analysis of preference for packaged fast food * Gender Crosstab Analysis of preference for packaged fast food * Occupation Crosstab Analysis of willingness to try packaged fried chips * Age Crosstab Analysis of willingness to try packaged fried chips * Gender Crosstab Analysis of willingness to try packaged fried chips * Occupation Crosstab Analysis of brand preference of packaged fried chips Analysis of liking towards packaged fried chips * Age Crosstabs Analysis of liking towards packaged fried chips * Gender Crosstabs Analysis of liking towards packaged fried chips * Occupation Crosstabs Analysis of loyalty towards packaged fried chips * Age Analysis of loyalty towards packaged fried chips * Gender Crosstabs Analysis of loyalty towards packaged fried chips * Occupation Crosstabs 62 63 66 67 68 69 70 71 72 74 75 76 88 .6 Figure 4.7 Figure 4.5 Figure 4.9 Figure 4.11 Figure 4.3 Figure 4.4 Figure 4.2 Figure 4.8 Figure 4.10 Figure 4.Figure 4.