We will continue to sell premium cookies: Nikhil Sen, Unibic
Nikhil Sen, Managing Director of Unibic Biscuits has seen a growth which is around two and half or three times more growth than what Britannia and ITC has seen over the last three years.
Last year, cookies had the largest share of the market pie. The segment had a market share of 30%, followed only by the cream biscuit segment which had 20% market share. One company which is rightly placed to ride on the cookie popularity in India is local player Unibic Biscuits, which caters to specifically to this space.
Nikhil Sen, Managing Director of Unibic Biscuits told the Zeebiz team that they are seeing a growth of over 50% compound annual growth rate (CAGR), which is around two and half or three times more growth than what Britannia and ITC have seen over the last three years.
Here are excerpts of the interview:
While Unibic has been strong in South, its market share in other parts of the country is weak. What is the reason for this?
Two things, South was our home base as our factory is there and so we expanded very easily initially.
With a limited amount of marketing budget you can create awareness in the four markets in South India.
The moment I go to north, west and east, I would be spending a lot more money and the returns I could get would be much less. Also, I don’t think we have a reliant and efficient distribution network in these three regions, which we are trying to build and invest in.
How much has your marketing spends grown from last year?
We spend in double digits when it comes to marketing to our sales and turnover ratio.
That is something that we will keep doing because we will spend to make an impact which is disproportionate to the 'big boys'. I can never spend what Britannia spends on Good Day.
What has been the growth that Unibic in the last year?
Over the last three years we have been growing at over 50% CAGR per year, which is close to two and half to three times more than what Britannia or ITC has seen.
Will Unibic cater to only the premium segment or will it look at the higher volume mass market segment?
We are not looking at being a mass market player. We don't have a reason at present to be there.
Has Patanjali's entry into the market impacted Unibic?
At present they do not pose a threat to us. They pose a threat to the more established players because they are there in the value-for-money segment where their offerings are basically priced at Rs 5-10, which is the bottom-end of the market. But yes, they have a presence and obviously the shelf space that is available is limited and all of us have to fight for the same space.
How will GST impact the FMCG business?
Depending on what percentage it is fixed at, say 15% or 18% for a category like ours, we will welcome it. If it is 26% we will end up increasing prices which the consumer will have to bear.
Apart from the biscuit category are you looking to enter into any other category?
We are looking at related categories which could end up being good opportunities for us. Right now I don't have any definitive plans because the cookies segment itself offers me an opportunity both in terms of product offerings and geographical expansion.