Home / Opinion / Views /  How Parle-G biscuit shows buying power of India’s bottom-of-the-pyramid billion

Back in 2016, the then 16-year-old Ramavva, daughter of poor peasants in Karnataka’s Gokak district, created a sensation among nutritionists – and became the subject of a months-long study at Kolkata’s Lake View Hospital – when it was discovered that she had survived on Parle-G biscuits – and nothing else – her entire life.

Apparently, Ramavva’s mother had not breastfed her but fed her only Parle-G biscuits and cow milk since birth. The girl refused to eat anything else even after growing up. Her poverty-stricken parents, who could ill afford the six or seven packets she consumed in a day, tried to convert her to other foods, but failed. Nutrition researchers found her to be essentially healthy but somewhat underdeveloped for her age.

Ramavva is perhaps an extreme case but millions of fanatic consumers like her – mostly from India’s often overlooked bottom-of-the-pyramid market – are the reason why Parle-G – a basic flour-and-sugar biscuit sold in packs priced as low as 2 – has become the single largest biscuit brand by volume in the world and propelled its maker, Parle Products, into a $2 billion-in-revenues company.

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That’s right, $2 billion. The nearly century-old maker of biscuits and snacks reported net sales of 16,202 crore for the year ended March 31, 2022, according to filings with the Registrar of Companies (Parle Products is not a listed company). This was a healthy 9 per cent over the sales of 14,923 crore it had logged in FY21.

Not bad for a company which is actually not the market leader by value in India – rival Britannia is ahead by a shade. But while Britannia gets its volumes – and market share – from higher-priced cookies catering to the urban middle class, Parle has remained laser-focused on the mass market, and on its most affordable product. The result: while Britannia has more than double Parle’s market share in the higher-priced range, Parle has a staggering 85 per cent of the market in the basic glucose biscuit category.

It has also managed – despite inflation – to hang on to the “magic price point" of 5 per pack for close to three decades. The pricing of its most popular pack – the 5 pack of Parle-G – has remained unchanged since 1994. Pack weight has fallen dramatically, though. In 1994, the 5 pack weighed 100 gm. Today, it weighs just 55 gm. But for India’s poor, affordability remains key. Which is why the Parle-G 5 pack and Haldiram’s 5 bhujiya pack have helped both become billion-dollar brands in India.

Parle-G’s success is also a testimony to the collective buying power of India’s poor. According to UN data, India has the largest absolute number of poor people in the world (228.9 million), based on 2020 population data. Over 90 per cent of them live in rural India. And that is where Parle-G sells most of its biscuits. Biscuits have an astonishing 83 per cent market penetration in rural India and over 94 per cent in urban India, making biscuits the largest FMCG category in India.

This strong rural connect has also helped keep Parle-G at the top of the charts for India’s “most chosen" brands for more than decades, edging out that other home-grown foods behemoth, Amul. According to Kantar Worldpanel’s Brand Footprint study, Parle-G occupied the top spot as the most chosen brand based on its estimate of what it calls Consumer Reach Points – a composite metric that combines how many households are buying a brand (penetration) and how often (frequency of purchase). Parle-G topped with 6,531 million CRPs, followed by Amul with 5,561 million, helped by its easy availability even in remote markets, its affordable pricing and, above all, its ability to maintain consistency in taste and quality, critical to the longevity of any food brand.

This, more than anything else, underlines the real potential at the bottom of the pyramid in India. Income poverty is an obvious deterrent to consumption – but that does not mean that the poor do not consume anything. If brands can get the ‘three Ps’ of marketing right – product, price and placement – there is still a fortune waiting to be made at the bottom of the pyramid.

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