Category Attractiveness Analysis

Snack Industry
PRESENTED BY:-
SAHIL JAGGA
RAMAN DEEP SINGH
VAIBHAV TYAGI
DHIRYA
KUNAL NAYAR
 Introduction
• MINISTRY OF FOOD PROCESSING INDUSTRIES
• Set up in July 1988.
- Fruits and vegetable processing industry.
- Food grain milling industry.
- Dairy products.
- Processing of poultry and eggs, meat and meat products.
- Fish processing.
- Bread, oilseeds, meals (edible), breakfast foods, biscuits,
confectionery (including cocoa processing and chocolate), protein

isolate, high protein food, and other ready to eat food products.
- Beer, including non-alcoholic beer.
- Alcoholic drinks from non-molasses base.
- Aerated waters / soft drinks and other processed foods.
- Specialized packaging for food processing industries.
- Technical assistance and advice to food processing industry.
• Indian foods industry is US$ 6.1 billion industry.
• 44 per cent of the entire FMCG sales.
• Growing at 9 percent per annum.
• Snack food industry is worth Rs 100 billion in value and over 4,00,000
tones in terms of volume. (ministry of food processing)
• Almost 1,000 snack items and 300 types of savouries are sold across India.
(Apeda survey)
 Aggregate Market Factors
Category Size
- Rs 2,200-crore snack food market.
Major Players-
• Frito Lays
• ITC (Bingo)
• Haldiram
• Parle (Hippo)
• SM Foods
• Garden Hygienic
• Fun Flips
• Regional Players like Balaji, Bikano..
Category Growth
- The industry has been growing10% for the last 3 years.
- Branded segment is growing around 25% per annum.
- Due to Multiplex culture, changing food habits, snacking at home while watching
TV, pubs and bars (where they are served free).
Market Attractiveness: (+)
Sales Cyclicity
- Prices are such that they do not get impacted directly with the variations in
income.
- No direct affect due to changes in income so it has more attractiveness.
Seasonality
- Year round Sales.
- Sales increase in the Holy festival seasons specially near Diwali, as people tend to
purchase snacks as gifts.
- Market Attractiveness: (+)
Profits
- Less production cost.
- High advertisement cost and packaging cost.
Market Attractiveness: (-)
 Category Factors
Threats of New Entrants
- High Capital required.
- Strong distribution network.
- Large number of intermediaries.
- Low availability of adequate infrastructural facilities.
- High inventory carrying cost, High packaging cost.
- High competition.
- Huge Market & Lack of Differentiation, differentiation is largely through
the brand, flavour, style, shape.
Market Attractiveness: [-]
Supplier Power
- Large number of suppliers but supply is limited.
- High demand.
- High competition.
Market Attractiveness: [-]

Threat of Substitutes
- Close substitutes from big players.
- Same products from same sector.
- Also other substitutes like biscuits, toffees etc.
Market Attractiveness: [ - ]
Buying Power
- No bulk purchase.
- Buyers are fragmented.
- Liking for special flavour.
- Prices are fixed.
Market Attractiveness: [+]

Degree of Rivalry
- large no. of firms.
- low switching cost.
- High storage cost and highly perishable product.
- Low level of product differentiation.
- Personal rivalries.
Market Attractiveness: [-]
 Environmental Factors
Economical
- All income groups are favorable for the Industry.
Market Attractiveness: [+]

Political Factors / Regulatory

- The Ministry acts for bringing in greater investment into this sector,
guiding and helping the industry in a proper direction and creating a
conducive environment for the healthy growth of the food processing
industry. 
Market Attractiveness: [+]
Technological factors
- Need of modern technology to enhance the production and the quality.
- So many quality restrictions.
Market Attractiveness: [-]

Social/ cultural factors

- Change in lifestyle.
- Change in eating habits.
Market Attractiveness: [+]