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Unibic India: From Fastest Growing Niche Cookie Brand to a Challenger?

Case Code: MKTG428
Case Length: 17 Pages
Period: 2004-2020
Pub Date: 2020
Teaching Note: Available
Price: Rs.500
Organization : UNIBIC Foods India Pvt. Ltd.
Industry :Food & Beverage
Countries : India
Themes: New Business Development/ Segmentation/ Marketing Mix/Marketing Strategy
Global Economic Impact of Coronavirus – Assessment and Mitigation (B)
Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

The Troubled Days

In 2007, Lighthouse Funds acquired a 25% stake in Unibic from Unibic Australia for Rs. 200 million. In 2010, Unibic Australia started making losses and wanted to withdraw from the Indian market. At that time, Unibic operated solely in the premium, high-margin cookies segment in India, with a share of around 8%. It had a market presence primarily in south India and was exporting to the Middle East and Hong Kong. It had strategic alliances to make cookies for various private players. However, it was not yet making profits and was cash-strapped...

Unibic’s Retail Strategy

Over the next few years, Unibic grew rapidly. Its growth was primarily fueled by the changes sweeping through the Indian biscuit industry, wherein glucose biscuits that had dominated the market, gradually lost out to cream biscuits and cookies. The reasons for the shift included rising disposable incomes leading to an increase in consumption of premium biscuits; a larger number of manufacturing facilities of premium biscuits; growing health awareness; innovation bringing in attractive new products; rising affordability of cookies; and increase in eye-catching packaging...

Unibic’s Keen Eye on Quality and Product Innovation

Over the years, Unibic regularly introduced fresh and unique flavors, ultimately producing over 30 variants of cookies. Its products could be broadly categorized into chocolate, butter, milk, savory, and health. The company considered its target market to be between the ages of 14 and 40. It continued its efforts at innovation and produced new products which would appeal to its target market...

Laying Out the Marketing strategy

In 2015, Unibic had used celebrity endorsement by signing on south Indian actor Shruti Hassan, for over a year. It stated that it wanted someone who was relevant and would give the brand a boost to get to the numbers it wanted in the South...

Unibic’s Media Mix

Unibic didn’t advertise much in print media; TV remained the company’s core focus and got the largest chunk of its advertising spend, followed by digital and OOH. Instead of following the traditional strategy of having a similar marketing campaign across markets, Unibic employed a unique strategy in each market, thereby playing to its strengths in each market while keeping in mind the market conditions and consumption patterns...

The Testing Economic Environment

From 2019 onward, Unibic started feeling the heat of the economic slowdown in India. The Indian economic slowdown of 2019 led to a serious and continuing decline in the country’s real estate, automobile and construction sectors and in overall consumption demand. The second quarter (July-September) of the financial year (April 2019-March 2020) witnessed a drastic fall in the gross domestic product (GDP) growth rate to 4.5%. The main reasons attributed to the fall in the GDP growth rate were – contraction in manufacturing activity, weakened investments, and lower consumption demand. Vudayagiri added..

The Road Ahead

As of 2020, Unibic had the largest wire cut cookie manufacturing plant in India. The plant had the capability to manufacture 100 tonnes of cookies each day, with five production lines. While it used 98% of its production capability to produce its own brand, the rest was used to manufacture for private label brands – six in India and 10 across the world. It had annual revenues of Rs. 5 billion. It also exported its products to more than 21 countries including across Australia, North America, the UK, and Europe, Asia, the Middle East, and New Zealand. It derived 45% of its earnings from the south of India...

Exhibits

Exhibit I: Break-up of the Organized Indian Biscuit Industry in the Early 2000s
Exhibit II: ‘Biscuits on Pile’ and ‘Biscuits on Edge’
Exhibit III: Market Share of Unibic in the Cookie Segment, as of 2017
Exhibit IV: Classification of Indian Cities
Exhibit V: Biscuit Market in India, as of 2020
Exhibit VI: Unibic’s Product Range

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