Wednesday, June 19, 2024

The growing appetite for premium sweet biscuits and cookies in India

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Sweet biscuits and cookies are a well-established, indulgent snacking category in India. Not surprisingly, some consumers are willing to pay a premium for elevated indulgence. At the same time, a majority of them are also willing to pay more for healthier biscuits. 

The chai-biscuit ritual is considered a driving force for sweet biscuit/cookie consumption. It is often consumed as an accompaniment to hot beverages like chai, coffee, plain milk, malt drinks and green tea.

Therefore, the time is ripe for premiumisation. Better-for-you (BFY) offerings and elevated indulgence can both open consumer wallets. Focusing on hot beverage pairings can help drive usage.

Appeal with BFY offerings

The growing prevalence of chronic diseases associated with stressful urban lifestyles is likely driving interest in healthy snacking among urban consumers. A similar trend is seen in sweet biscuits and cookies, where 57% of metro dwellers (vs 53% in tier-3 and 54% in tier-2 cities) are willing to pay more for healthier than regular biscuits and cookies.

It is crucial for biscuit/cookie brands to understand the varied definitions of healthfulness, as it differs from consumer to consumer. For example, features like lower sugar and higher protein and fibre content resonate more among upper-tier city consumers than lower-tier city dwellers. Therefore, develop lower sugar, high protein and fibre-rich biscuits/cookies and emphasise these features in marketing communications.

Sweet biscuits enjoy mass appeal in India. Even among financially struggling consumers who are typically more price-sensitive, nearly 57% of those who are currently in OK or a tight financial situation are willing to pay more for healthier biscuit/cookie variants. This means that even price-conscious consumers are willing to spend extra if they perceive a clear health benefit.

Therefore, positioning better-for-you biscuit offerings in a mass-premium tier is a growth opportunity. Emphasising value-for-money proposition to drive trials and adoption among price-conscious middle-class Indians is the key to getting ahead.

Amp up the indulgence

Nearly a third (31%) of consumers are willing to pay a premium for elevated indulgence in biscuits/cookies. This sentiment particularly resonates better with Gen Z living in metro cities. It is worth noting that the demand for indulgence decreases as age progresses, making it crucial for brands to find ways to deliver added indulgence with new product offerings to broaden their appeal among Gen Z consumers.

Flavour and texture will play a pivotal role in justifying premium pricing in sweet biscuits/cookies. Therefore, brands can deliver a superior consumption experience with novel and intense flavours with crunchy textures. For instance, the TURF analysis states that Indian-mithai-flavour, crunchier in texture and smaller/munchable packs can help reach 69% of indulgence seekers in sweet biscuits/cookies.

Premiumisation opportunity lies in giving a desi twist to the mithai biscuits/cookies with mithai flavour. This can even help brands to break into the festive celebrations and festive gifting. For example, one in four consumers find sweet biscuits ideal festive gifts. Therefore, make sweet biscuits/cookies gift-friendly to tap into this untapped market. 

Besides mithai flavour, make the crunch count. Currently, crunchy texture leads in biscuit launches; stand out by delivering crunchier texture than rivals. 

 The potential exists for sweet biscuits/cookies brands to compete with other on-the-go categories by introducing smaller, munchable biscuits and convenient pack sizes.

Drive consumption with hot beverage pairings

94% of biscuit/cookie consumers have consumed biscuits/cookies with hot tea/green tea/hot coffee/black coffee/plain milk or malt drinks. Chai is the most popular beverage drink paired with biscuits/cookies and Marie is the most common sweet biscuit format consumed with chai.

Emphasising hot beverage pairings, especially with chai, provides an avenue for brands to enhance the overall consumption experience. Besides chai, green tea and coffee can also be strategically paired with biscuits/cookies, helping sweet biscuits/cookies to appeal to different consumer segments. 

What we think

The time is ripe for premiumisation in the biscuit/cookie category.

BFY offerings in sweet biscuits/cookies are key to unlocking the potential for mass premiumisation by upgrading the mighty middle-class Indian consumers. Appeal to upper city-tier health seekers with lower sugar, higher protein and fibre content. All-natural ingredients can help broaden the appeal of BFY biscuits/cookies among health-seekers in Tier-2 cities.

Gen Z and metro dwellers make up the majority of the indulgence-seeking cohort. To win over indulgence seekers, deliver a superior consumption experience. Appeal to them with mithai-flavoured biscuits/cookies that have crunchier and melt-in-the-mouth textures and are available in munchable/smaller packs.

Expansion opportunity also lies in emphasising hot beverage pairings. The hot-beverage-biscuit ritual drives biscuit consumption. Hot milk tea is the most popular beverage drunk alongside biscuits/cookies. Similarly, encourage consumption by pairing biscuits/cookies with other hot beverages like green tea, hot milk coffee and plain milk/malt drinks.

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