SUNFEAST

(
AN ITC INITIATIVE)

TO BISCUITSFROMCIGARETTES
ITC was incorporated on August 24, 1910 the Company's multi-business
portfolioencompassing a wide range of businesses - Cigarettes & Tobacco,
Hotels, InformationTechnology, Packaging, Paperboards & Specialty
Papers, Agri-business, Foods, LifestyleRetailing, Education & Stationery
and Personal Care .

In July 2003, ITC forayed into the Biscuits market with the
Sunfeast
range of Glucose, Marieand Cream Biscuits. Sunfeasts brand essence,
"Spread the Smile"
connotes happiness,contentment, satisfaction and pleasure. The mascot
Sunny
reinforces the emotional aspects of the brand.ITC has now moved
seamlessly from the role of master blender who creates new
cigaretteflavours to master chef, using its expertise to create a veritable
feast, or should we say"Sunfeast", for the biscuit consumer.The Sunfeast
umbrella brand, powered by Sunny the mascot, is intended to "spread
thesmile", given the new product innovations of Orange Marie and
Butterscotch Cream biscuitsaimed at the young members of the Indian
households.He said growth in the biscuits market had risen from five per
cent earlier to 12 per cent in2002, and was obviously an attractive
proposition right now, given the company's distributiveand marketing
strengths.These are the most liked biscuits in India for their better taste
and rates.
FINANCIAL STATISTICS
ITCLtd. concluded yet another year of strong performance with Gross
Turnover at Rs.21356crores reflecting a growth of 10.7% over the previous
year. Net Turnover at Rs.13948 croresincreased by 14.7% driven by the
handsome 49% growth of non-cigarette FMCG businessesand a healthy
performance by the Hotels and Paperboards, Paper & Packaging
segments. .For the fourth quarter, Net Turnover registered a growth of
16.7% to touch Rs. 3934 crores whileThe Board of Directors recommended

a dividend of Rs. 3.50 per Ordinary share of Re.1/-each (Previous year:

Rs.3.10 per share). This will entail a total cash outflow of Rs. 1543crores,
comprising proposed dividend of Rs. 1319 crores and income tax on the
proposedDividend of Rs 224 crores.

HOW
SUNFEAST
W
AS SUCCESSFUL:
Can a cigarette manufacturer succeed in marketing Biscuits? What do
management thinkerssay about unrelated diversification? Unrelated
diversification will succeed if it is based on thecore competency of the
firm. So What is the core competency of ITC that is being leveragedwhen
it decided to enter the Foods market. ITC relies on three core
competencies

The depth of distribution

y

Its brand building capabilities.

y

The ability of Quality outsourcing.Sunfeast has been a success because of

these three competencies of ITC which made them e aserious FMCG
player from its position of Tobacco products leader. ITC had the advantage
of the well entrenched distribution setup which is matched only by HLL.
SUNFEAST- AN
OV
ER

V
IE
W
:
"
Sunfeast
" - The umbrella brand name introduced in the Glucose, Marie and Cream
segments"
Sun
" mascot - The brand ambassador reinforcing the positioning of the brand
"
Spread theSmile
"
Product Innovatio
n - Two unique and new flavours - for the first time in the India marketOrange Marie and Butterscotch Cream biscuit"
Sunfeast
" - To be launched nationally in phases in over
O
ne million
retail outlets across thecountry."
Sunfeast
", with the Brand Essence "Spread the Smile" connotes happiness;
contentment,satisfaction and pleasure one would derive from great
tasting and high quality biscuits. The brand positioning and imagery is
reinforced by the Sun mascot conveying the emotional andgratifying
aspects of the product."
Sunfeast
" range of biscuits is competitively priced and would include two new
productinnovations - Orange flavoured Marie and Butterscotch flavoured
Cream biscuits launchedafter 12 months of product research and
development and extensive sampling across 14,000consumers across all
POP for the first time in the Indian market.

D
IFFERENT PR
O
D
UCTS
V
arious products offered by Sunfeast are
Sunfeast milky magic
,
Sunfeast Marie light
-Sunfeast Marie light
original
; Sunfeast Marie light
O
range
,
Sunfeast golden bakery
,
Sunfeast dark fantasy
,
Sunfeast Glucose
,
Sunfeast dream cream

strawberry
cream;
bourbon
;

orange cream
;
butterscotch
cream,
Sunfeast snaky, Sunfeast sweet n salt
,
Sunfeast nice
,
Sunfeast benne vita flaxseed biscuits
,
Sunfeast special
- special cookies andspecial
creams
,
Sunfeast pasta treat- pizza style; chicken; tangy tomato.
C
O
MPETIT
O
RS:
Major players in biscuits who dominated the industry long back were Parle
and Britannia.

With that there were smaller brands in various regions. Instead of all this
ITC took a bold stepto hit on these biscuit mammoths making 82% of
industry in 2004.Let me enumerate some reason why ITC entered into this
product category.

1.

In developing markets, the above percentage is as high as 95%. So

looking intofuture, Indias will have more organized and branded food
product categories. It willlead to dual effect: Increase in base of biscuit
segment and Increase in % of brandedfood categories.2.

ITC has a great scope to be a branded player.3.

Branded Biscuits industry come out to be around Rs. 4000 crores .4.

Increasing at the rate from 12% to 14% p.a.5.

Synergies with ITC core competencies (value addition to wheat with

Aashirwad Atta brand).6.

Biscuits as a segment positively affect the bottom line.

REAS
O
NF
O
R ENTRY INT
O
BISCUITS
1.

Innovation:
Findings revealed that consumers wished to taste new and innovative
products. The company decided that this could be its biggest point of
attack. In 2003,ITC launched Sunfeast with six ranges along with that, it
also launched innovationssuch as orange-flavoured Marie, Marie light and
butterscotch-flavoured cream biscuits. In 2004, Sunfeast followed this up
with the launch of Milky Magic. Morerecently Sunfeast Snaky and Sunfeast
Golden Bakes.2.

Distribution:

In biscuit category, distribution and visibility is extremely importantand in

this regard, Sunfeast did not stumble. The main credit goes to tobacco
business its understanding and deep grasp in distribution. The company
says the brand is nowavailable in nearly 1.8 million outlets compared to
Britannias -