AN INTRODUCTION TO FOOD & BEVERAGES SECTOR The multi-billion food and beverage industry comprises several markets including

bakery products such as bread, biscuits etc., milk and dairy products, beverages such a s t e a , c o f f e e , j u i c e s , b o t t l e d w a t e r e t c . , s n a c k f o o d , c h o c o l a t e s, et c . b e v e r a ge , confectionery, processed foods and others. India's Food and Beverage industry is valued at Rs. 3584 billion. India produces above 600 million tones of food product every year and is one of the major producers of food in the world. The food and beverage industry registered a growth rate of 8.5% in 2005-06. With increase in disposable income of consumers, growing awareness among consumers about health products, rapid urbanization, and increasing popularity of convenience foods, food and beverage sector is expected to grow at a high rate. This sector holds ahuge potential to grow because of the increase in advertisement spending, awareness c a m p a i g n a b o u t p r o d u c t s i n u r b a n a s w e l l a s r u r a l a r e a s , a n d l a r g e s c a l e transformation. T h e f oo d a n d b e v e r a ge i n d u s t r y i s p r i m a r i l y d r i v e n b y c o n s u m e r h e a l t h t r e n ds . Presently, the food and beverage industry is in a dynamic phase, marked by a high degree of competition. As product development within the food and beverage market moves towards a focus on health and nutrition, the growth and development of food manufacturers in the market depends on having prudent strategies in place, which can be applied globally. In effect, this has created a highly competitive market place, which fosters growth of participants with a clear vision of "growing with their customers."T h e m a j o r p l a ye r s i n t h e " F o o d a n d B e v e r a g e " In d u s t r y i s : H e i nz , M a r s , M a r i c o , Conagra, Pepsi, HLL, Pillsbury, Nestl, Amul, ITC, Dabur, Britannia, Cadbury, SmithKline Beecham, The Surya Food and Agro Private Ltd.

BAKERY INDUSTRY Bakery industry in India is probably the largest among the processed food industries, production of which has been increasing steadily in the country. Bakery products once considered as sick mans diet have now become essential food items of the vast majority of population. The two major bakery industries, viz., bread and biscuit account for about 82% of the total bakery products. The annual production of bakery products which includes bread, biscuits, pastries, cakes, buns, Rusk, etc., most of which are in the unorganized sector, is estimated to be in excess of 3 million tones. The production of bread and biscuits int h e c o u nt r y b o t h i n t h e o r ga n i z e d a n d u no r ga n i z ed s e c t o r s i s estimated to be around 1.5 million tones and 1.1 million tones respectively. Of the total production of bread and biscuits, about3 5 % i s pr o d u c e d i n t h e o r ga n i z e d s e c t o r a n d t h e r e m a i n i n g i s manufactured in the unorganized sector. Indian Bakery sector is indicating significant growth both in terms of volumes and customer base. The sector, which is estimated at Rs 3,500 crore ,i s c u r r e n t l y r e g i s t e r i n g a 4 0 % g r o w t h a c c o r d i n g t o i n d u s t r y sources. The production of Bakery products has increased from5.19 lakh tones in 1975 to 18.95 lakh tones in 1990 recording four-fold increase in 15 years. S o m e o f t h e w e l l - k no w n a n d m o st f r e q ue n t e d b a k e r i e s i n t he c o u n t r y a r e S w e e t C h a r i o t , M o d e r n B a k e r y , D a i l y B r e a d i n Bangalore, Monginis, Birdie's, Croissants in the west, and in the north and eastern parts of the country, there are quite a few big players too. BREAD Bread is the cheapest and basic instant food available for consumption. Though bread is not a staple food in the country, its c o n s u m p t i o n ha s i n c r e a s e d o v e r t h e ye a r s . In In d i a i t i s s t i l l a secondary staple food when compared to chapatti, pure or rice. T h e d i f f e r e n t t yp e s o f b r e a d a v a i l a b l e a r e W hi t e b r e a d , W h o l e meal or whole wheat bread, mixed grain bread, Kibbled wheat a n d c r a c k e d w h e a t b r e a d , F i b e r - i n c r e a s e d w h i t e b r e a d s , R ye bread

INTRODUCTION TO BRITANNIA INDUSTRIES T h e s t o r y o f o n e o f In d i a 's f a v o r i t e b r a n d s r e a d s a l m os t l i ke a f f a i r t a l e . O n c e u p o n a t i m e , i n 1 8 9 2 t o b e p r e c i s e , a b i s c u i t company was started i n a n o n d e s c r i pt h ou s e i n C a l c u t t a ( n ow Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today is one of Indias best known brands and also one of the most admired Food Brand in the country. Having succeeded in garnering the trust of almost one-third of India's o n e b i l l i o n p op u l a t i o n a n d a s t r o n g m a n a ge m e n t a t t h e helm m e a n s B r i t a n n i a w i l l c o n t i n u e t o d r e a m b i g o n i t s p a t h o f innovation and quality. And millions of consumers will savors the results, happily ever after. T h e c o m p a n y h a s f o u r p r o d u c t i o n facilities, 4367 employees, and sells its products in over 600,000outlets across India . The Britannia Brand is all about eating healthy for leading a b e t t e r l i f e . I t i s t h e l a r g e s t c o m p a n y i n t h e f o o d p r o c e s s i n g industry whose product range also includes breads and cakes. Britannia has a basketful of goodies with biscuits like Nice Time, T i ge r , M a r i e G o l d , 5 0 5 0 M a s k e r C h a s k a , M i l k B a k e s , P u r e M a gi c , Time Pass Nimkee, Treat, Good Day, Little Hearts, Nutria Choice, Nutrichoice Digestive, Daily Fresh Bread and Britannia Cakes.

BRITANNIA DAILY FRESH BREAD Till 1958, there were no breads in the organized sector and bread consumption was a habit typified by the British. Then, a mechanized bread unit was set up in Delhi with the name "Derbies" which produced sliced bread and packed it under the Britannia name. Thus, Britannia was not only the pioneer, but also inculcated in the people of Delhi the habit of eating white sliced bread. The Mumbai unit came up in 1963, and there again Britannia was the first branded bread in the city. From a company offering 2 packs - the 400gm and the 800gm plain white sliced bread - Britannia has evolved into a company offering 22 packs, catering toa variety of taste and price segments in the bread consuming market. The last couple of years also saw the introduction of Whole Wheat Bread as a part of "Eat Healthy, Think Better" credo. Britannia Daily Fresh Bread, which finds its way to over 6 lakh households daily, is the mainstay of the companys non-biscuit business at present. Britannia hopes to drive this emerging business through the exploding modern trade and has already gained access to Reliance Retail, Trinethra and Fab mall for its breads. Britannia is widely recognized as an innovative marketer.

COST SHEET OF BRITANNIA BREAD PROFORMA OF COST SHEET Cost sheet for every 1lac units produced and sold. Quantity Manufactured Quantity sold DIRECT COST Raw materials consumed Opening stock of raw materials Purchases of Raw Materials (-)Closing stock of Raw Materials Materials Consumed Direct labour/wages Direct cost/expenses PRIME COST INDIRECT COST Factory/Works Overheads Indirect labour Depreciation on Machinery Works Overheads Cost of Maintanence Other Factory Expenses Supervisors Salary Power & Fuel Total Overheads FACTORYCOST/WORKS COST Office and Administrative Overheads Depreciation on office furniture@7% Office rent Salary of staff Office and General Expenses Telephone expenses Electricity and Lightings Printing and stationary Total Office and AdministrativeOverheads COST OF GOODS SOLD Selling and Administrative Overheads Sales Commission Salary of Salesman Carriage Outward Cost Per Unit 1 1 CPU(Rs) 100000 100000

0 5.805 0 5.805 0.124 o.2415 6.1705

0.122 0.675 0.05204 0.0589 0.0282 0.0385 0.5678 1.54244 7.71294 0.0281 0.0585 0.089 0.0257 0.0219 0.03123 0.00294 0.25737 7.97031 0.705 0.1 0.12798

Sales Expenses Total Selling and AdministrativeOverheads COST OF SALES PROFITS SALES

0.057 0.98998 8.96029 1.03971 10

Raw Materials Cost: Flour Water Yeast Salt Raw Materials per unit 3.756 0.892 0.6789 0.4781 5.805

NOTE The Value are determined on the basis of apportionment as the company produces more than one product (including fixed cost) Cost sheet for every 1lac units produced and sold. Some of the above Values are estimated

COST SHEET ANALYSIS Direct cost: Direct material To manufacture one unit of bread the following raw materials are required. Flour Water Yeast

Salt

Direct labor/wages: Direct labor/wages amounts to rs. 0.124 per unit which is approximately 2.009% of the prime cost. This percentage is low because a good amount of work is automated as a result of which human resources are diverted to more productive areas such as sales and marketing. Direct cost/expenses: Direct cost includes costs incurred in bringing the raw materials into the factory which is carriage inward. It also includes the amount paid loading unloading charges and other petty expenses. Indirect costs: Factory overheads: The factory overheads includes the indirect labor, depreciation on machinery, works overheads, cost of maintenance, other factory expenses, supervisors salary and power & fuel. Indirect labor: the amount of indirect labor is Rs. 0.122 per unit. This value includes sweeper charges, support staff etc. Depreciation on machinery: the depreciation is calculated on the basis of WDV calculated @ 10% p.a. this value amount to around 43.7% of the factory overheads. The percentage high because of the level automation and technology used for production. Power: per unit power and fuel consumption is Rs. 0.5678. Other factory expenses: other factory expenses include maintenance of factory and other miscellaneous expenses.

Office and administration overheads:Office and administration overheads include depreciation on office furniture @7%, office rent, salary to staff, office and general expenses, postage and telegrams, telephone expenses, electricity and lightings. Salary to staff: the salary paid to staff comes up to around Rs.0.089 per unit cost. Office and general expenses: this comprises of refreshment postage and telegrams and other petty expenses. Printing and stationary: This consists of photocopy charges, printouts and other stationary items. Telephone Expenses: Calls made by the staff members. Electricity and lightings: It consists of office lighting and air conditioning expenses Sales and distribution overheads:

Selling and distribution cost includes Sales Commission, Discount allowed, Salary of salesmen, Carriage outward and Sales expenses Sales Commission: As a part of encouragement for sales people, they are given commission of 5 % of thetotal sales done by them. Discount allowed : To attract whole sellers to buy the product they are offered a discount of 5% on theselling price. Salary of salesmen : The average salary paid to the sales people is around Rs. 0.1 of the total per unit costof the product. Carriage outward : To carry the finished goods to the whole sellers, the transportations charge per unit/product is set as RS 0.12798. Sales expenses : This includes expenses incurred on advertisements and promotional expenses such asnewspaper advertisements, hoardings, TV commercials etc. Profit: The Profit arise out of selling per unit of the product is 11.603% of the total per unit costprice

CONCLUSION:
As per the study, we would like to conclude that bread not being the staple food in India, has definitely evolved as a substitute for chapattis, rotis, rice, etc. It is easily available due to its excellent distribution channels. Britannia bread has acquired almost50% stake in daily bread market. Today a variety of breads are available, such as brown bread, whole wheat bread, chutney bread, etc.