During the fiscal year ended March 31, the biscuit maker increased net sales by 9% to Rs 16,202 crore, while profit fell by 81% to Rs 256 crore. According to the company's filing with the Registrar of Companies, it had sales of Rs 14,923 crore and profit of Rs 1,366 crore a year ago.
Parle Products stated that its value-for-money strategy, particularly for Parle G, has been critical in consistently growing the brand over the years, especially during inflationary times when consumers are cutting back on spending and opting for more miniature packs.
"Rural areas, which account for nearly 55-60% of total sales, also drove growth. We also increased our distribution by 12% last year, which helped," said Mayank Shah, senior category head at Parle Products. "Last year's profit was unusual because we didn't run any schemes or promotions in the trade, cut back on advertising, and saved significantly on variable costs during Covid."
Last year, the five-rupee-a-pack Parle-G became the second Indian fast-moving consumer goods brand, after Haldiram, to cross the $1 billion retail sales. According to Brand Footprint, Kantar Worldpanel's annual ranking of the most preferred consumer brands in India, the biscuit brand has been India's top FMCG brand for a decade.
Two years ago, the 90-year-old company surpassed competitors such as Britannia and Nestle to become the country's largest food company in annual revenue. Britannia had revenues of Rs 14,359 crore last fiscal year, while Nestle had sales of Rs 14,829 crore.
To be sure, Parle's main competitor Britannia is the value market leader in the biscuits category, having gained market share for the past 38 quarters after tripling their dealership and retail coverage over the last 7-8 years. In fact, after outpacing Parle in 2015-16, Britannia has increased its lead to over 40% of the Rs 45,000 crore biscuit market. On the other hand, Parle is the market leader in volume, selling 1.2 million tonnes of biscuits annually.
According to Kantar, daily groceries and essentials purchased by consumers during the fiscal year ended March fell 0.8%, as price increases forced people to cut back on household spending. Parle said its ubiquitous glucose biscuit brand benefited from rising packaged food prices. Biscuits have grown consistently even as other consumer goods have declined. Despite being a basic necessity in most markets, per capita consumption of biscuits remains very low. Also, biscuits have the lowest price per kilogramme in the packaged food segment, at Rs 100-120, compared to other snacks, which sell for more than Rs 250 per kg," Shah added.
The biscuit segment grew in the double digits and by about 7-8% in volume during the year. Mohanlal Dayal Chauhan founded Parle Products in 1929 in Vile-Parle, a Mumbai suburb, with orange candy and other confectionery items before entering the biscuits segment ten years later. The company operates over 132 manufacturing facilities in the country, with biscuits accounting for 70% of annual sales, followed by snacks and confectionery.
