Savory Snacks in India: Industry Profile

INDUSTRY PROFILE
Savory Snacks in
India
Reference Code: 0102-0199

Publication Date: October 2010
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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Market value
The Indian savory snacks market grew by 17.1% in 2009 to reach a value of $535.4 million.
Market value forecast
In 2014, the Indian savory snacks market is forecast to have a value of $1,017 million, an increase of 90%
since 2009.
Market volume
The Indian savory snacks market grew by 13.2% in 2009 to reach a volume of 119.7 million kilograms.
Market volume forecast
In 2014, the Indian savory snacks market is forecast to have a volume of 196.7 million kilograms, an
increase of 64.3% since 2009.
Market segmentation I
Potato chips is the largest segment of the savory snacks market in India, accounting for 45.7% of the
market's total value.
Market segmentation II
India accounts for 3.2% of the Asia-Pacific savory snacks market value.
Market share
Pepsico, Inc. is the leading player in the Indian savory snacks market, generating a 42.5% share of the
market's value.
Market rivalry
The Indian savory snacks market is highly concentrated with the top three players accounting for 78.3%
of the total market value.

CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY 2
MARKET OVERVIEW 7
Market definition 7
Research highlights 8
Market analysis 9
MARKET VALUE 10
MARKET VOLUME 11
MARKET SEGMENTATION I 12
MARKET SEGMENTATION II 13
MARKET SHARE 14
FIVE FORCES ANALYSIS 15
Summary 15
Buyer power 16
Supplier power 17
New entrants 18
Substitutes 19
Rivalry 20
LEADING COMPANIES 21
Pepsico, Inc. 21
Haldiram’s Food International Limited 26
ITC Limited 27
MARKET DISTRIBUTION 31
MARKET FORECASTS 32
Market value forecast 32
Market volume forecast 33
MACROECONOMIC INDICATORS 34
APPENDIX 36
Methodology 36

CONTENTS
Industry associations 37
Related Datamonitor research 37
Disclaimer 39
ABOUT DATAMONITOR 40
Premium Reports 40
Summary Reports 40
Datamonitor consulting 40

CONTENTS
LIST OF TABLES
Table 1: India savory snacks market value: $ million, 2005–09 10
Table 2: India savory snacks market volume: million kilograms, 2005–09 11

Table 3: India savory snacks market segmentation I:% share, by value, 2009 12
Table 4: India savory snacks market segmentation II: % share, by value, 2009 13
Table 5: India savory snacks market share: % share, by value, 2009 14

Table 6: Pepsico, Inc.: key facts 21
Table 7: Pepsico, Inc.: key financials ($) 24
Table 8: Pepsico, Inc.: key financial ratios 24

Table 9: Haldiram’s Food International Limited: key facts 26
Table 10: ITC Limited: key facts 27
Table 11: ITC Limited: key financials ($) 29
Table 12: ITC Limited: key financials (Rs.) 29
Table 13: ITC Limited: key financial ratios 29
Table 14: India savory snacks market distribution: % share, by value, 2009 31
Table 15: India savory snacks market value forecast: $ million, 2009–14 32
Table 16: India savory snacks market volume forecast: million kilograms, 2009–14 33
Table 17: India size of population (million), 2005–09 34

Table 18: India gdp (constant 2000 prices, $ billion), 2005–09 34
Table 19: India gdp (current prices, $ billion), 2005–09 34
Table 20: India inflation, 2005–09 35

Table 21: India consumer price index (absolute), 2005–09 35
Table 22: India exchange rate, 2005–09 35

CONTENTS
LIST OF FIGURES
Figure 1: India savory snacks market value: $ million, 2005–09 10
Figure 2: India savory snacks market volume: million kilograms, 2005–09 11

Figure 3: India savory snacks market segmentation I:% share, by value, 2009 12
Figure 4: India savory snacks market segmentation II: % share, by value, 2009 13
Figure 5: India savory snacks market share: % share, by value, 2009 14

Figure 6: Forces driving competition in the savory snacks market in India, 2009 15
Figure 7: Drivers of buyer power in the savory snacks market in India, 2009 16
Figure 8: Drivers of supplier power in the savory snacks market in India, 2009 17
Figure 9: Factors influencing the likelihood of new entrants in the savory snacks market in India,
2009 18
Figure 10: Factors influencing the threat of substitutes in the savory snacks market in India, 2009 19
Figure 11: Drivers of degree of rivalry in the savory snacks market in India, 2009 20
Figure 12: Pepsico, Inc.: revenues & profitability 25
Figure 13: Pepsico, Inc.: assets & liabilities 25
Figure 14: ITC Limited: revenues & profitability 30
Figure 15: ITC Limited: assets & liabilities 30
Figure 16: India savory snacks market distribution: % share, by value, 2009 31
Figure 17: India savory snacks market value forecast: $ million, 2009–14 32
Figure 18: India savory snacks market volume forecast: million kilograms, 2009–14 33

MARKET OVERVIEW
MARKET OVERVIEW
Market definition
The savory snacks market consists of the retail sale of processed snacks, potato chips, nuts & seeds,
other savory snacks and popcorn. The market is valued according to retail selling price (RSP) and
includes any applicable taxes. Any currency conversions used in the creation of this report have been
calculated using constant 2009 annual average exchange rates.
For the purpose of this report Asia-Pacific comprises Australia, China, Japan, India, Singapore, South
Korea and Taiwan.

MARKET OVERVIEW
Research highlights
The Indian savory snacks market generated total revenues of $535.4 million in 2009, representing a
compound annual growth rate (CAGR) of 18.3% for the period spanning 2005-2009.
Potato chips sales proved the most lucrative for the Indian savory snacks market in 2009, generating total
revenues of $244.8 million, equivalent to 45.7% of the market's overall value.
The performance of the market is forecast to decelerate, with an anticipated CAGR of 13.7% for the five-
year period 2009-2014, which is expected to lead the market to a value of $1 billion by the end of 2014.

MARKET OVERVIEW
Market analysis
The Indian savory snacks market enjoyed double digit annualized growth during 2005-2009, owing to
strong sales growth in the popcorn and processed snacks categories. Overall, market growth is expected
to decelerate in the forthcoming five years.
The Indian savory snacks market generated total revenues of $535.4 million in 2009, representing a
compound annual growth rate (CAGR) of 18.3% for the period spanning 2005-2009. In comparison, the
Chinese and Japanese markets grew with CAGRs of 6.6% and 3.2% respectively, over the same period,
to reach respective values of $3.6 billion and $14 billion in 2009.
Market consumption volumes increased with a CAGR of 15.7% between 2005 and 2009, to reach a total
of 119.7 million kilograms in 2009. The market's volume is expected to rise to 196.7 million kilograms by
the end of 2014, representing a CAGR of 10.4% for the 2009-2014 period.
Potato chips sales proved the most lucrative for the Indian savory snacks market in 2009, generating total
revenues of $244.8 million, equivalent to 45.7% of the market's overall value. In comparison, sales of
other savory snacks generated revenues of $170 million in 2009, equating to 31.7% of the market's
aggregate revenues.
The performance of the market is forecast to decelerate, with an anticipated CAGR of 13.7% for the five-
year period 2009-2014, which is expected to lead the market to a value of $1 billion by the end of 2014.
Comparatively, the Chinese and Japanese markets will grow with CAGRs of 5.5% and 4.1% respectively,
over the same period, to reach respective values of $4.7 billion and $17.1 billion in 2014.

MARKET VALUE
MARKET VALUE
The Indian savory snacks market grew by 17.1% in 2009 to reach a value of $535.4 million.
The compound annual growth rate of the market in the period 2005–09 was 18.3%.
Table 1: India savory snacks market value: $ million, 2005–09
Year $ million Rs. million € million % Growth

2005 273.6 13,363.7 196.7
2006 316.0 15,435.2 227.2 15.5%
2007 383.9 18,752.8 276.1 21.5%
2008 457.3 22,337.3 328.8 19.1%
2009 535.4 26,151.9 385.0 17.1%
CAGR: 2005–09 18.3%
Source: Datamonitor DATAMONITOR
Figure 1: India savory snacks market value: $ million, 2005–09

MARKET VOLUME
MARKET VOLUME
The Indian savory snacks market grew by 13.2% in 2009 to reach a volume of 119.7 million kilograms.
The compound annual growth rate of the market in the period 2005–09 was 15.7%.
Table 2: India savory snacks market volume: million kilograms, 2005–09
Year million kilograms % Growth

2005 66.7
2006 76.0 13.9%
2007 89.9 18.3%
2008 105.7 17.6%
2009 119.7 13.2%
CAGR: 2005–09 15.7%
Figure 2: India savory snacks market volume: million kilograms, 2005–09

MARKET SEGMENTATION I
MARKET SEGMENTATION I
Potato chips is the largest segment of the savory snacks market in India, accounting for 45.7% of the
market's total value.
The other savory snacks segment accounts for a further 31.7% of the market.
Table 3: India savory snacks market segmentation I:% share, by value, 2009
Category % Share
Potato chips 45.7%
Other savory snacks 31.7%
Processed snacks 16.0%
Nuts & seeds 3.7%
Popcorn 2.9%
Total 100%
Figure 3: India savory snacks market segmentation I:% share, by value, 2009

MARKET SEGMENTATION II
MARKET SEGMENTATION II
India accounts for 3.2% of the Asia-Pacific savory snacks market value.
Japan accounts for a further 66.4% of the Asia-Pacific market.
Table 4: India savory snacks market segmentation II: % share, by value, 2009
Category % Share
Japan 66.4%
China 18.5%
South Korea 3.3%
India 3.2%
Rest of Asia-Pacific 8.6%
Total 100%
Figure 4: India savory snacks market segmentation II: % share, by value, 2009

MARKET SHARE
MARKET SHARE
Pepsico, Inc. is the leading player in the Indian savory snacks market, generating a 42.5% share of the
market's value.
Haldiram Manufacturing Co.Pvt.Ltd accounts for a further 27.1% of the market.
Table 5: India savory snacks market share: % share, by value, 2009
Company % Share
Pepsico, Inc. 42.5%
Haldiram Manufacturing Co.Pvt.Ltd 27.1%
ITC Limited 8.8%
Others 21.7%
Total 100%
Figure 5: India savory snacks market share: % share, by value, 2009

FIVE FORCES ANALYSIS
The savory snacks market will be analyzed taking manufacturers of nuts & seeds, popcorn, potato chips,
processed snacks and other savory snacks as players. The key buyers will be taken as food retailers, and
agricultural commodity traders, agricultural producers, manufacturers of ingredients and packaging, and
factory automation equipment as the key suppliers.
Summary
Figure 6: Forces driving competition in the savory snacks market in India, 2009
The Indian savory snacks market is highly concentrated with the top three players accounting for 78.3%
of the total market value.
Independent retailers are the main buyers in the Indian market and may exert strong buyer power.
Suppliers to the savory snacks market are weakened by the scale of market players. Attempting to enter
this market is difficult, with new entrants competing with large multinational companies. The market is well
developed and many of the players sell similar products, leading to an intensely competitive environment,
with players competing for the same share of the market.

Buyer power
Figure 7: Drivers of buyer power in the savory snacks market in India, 2009
The major buyers in the Indian savory snacks market are independent retailers (about 62% of the total
distribution). Savory snacks constitute just one of a wide range of products sold by most food retailers and
this reduces the importance of this product to buyers, increasing buyer power. While retailers themselves
are not very susceptible to brand loyalty, the end consumer might exert strong brand loyalty and hence
some pull-through of end-consumer demand on retailers is expected. Such a situation weakens buyer
power. Consumer demand is likely to be more price-sensitive in countries where average consumer
incomes are lower, and retailers will be correspondingly price-sensitive if they wish to maintain their
margins on these products. Overall, buyer power is assessed to be moderate in the Indian savory snacks
market.

Supplier power
Figure 8: Drivers of supplier power in the savory snacks market in India, 2009
Suppliers in the savory snacks market include agricultural commodity traders, agricultural producers,
manufacturers of ingredients and packaging, and factory automation equipment. Market players generally
buy perishable raw materials, such as potatoes, direct from the growers, which are often relatively small
businesses. Vegetable oils, and grains such as maize, are more commonly provided by commodity
traders and these are often large multinationals. While market players rarely integrate backwards into
farming, some have already become active in commodity trading; a trend that weakens supplier power.
Similarly, many market players manufacture ingredients such as flavorings. While consumer preferences
must be catered for, players can mitigate the impact of changing raw material prices by diversifying their
product mix - for example, producing both potato chips and corn chips. Overall, supplier power is
assessed to be moderate in the Indian savory snacks market.

New entrants
Figure 9: Factors influencing the likelihood of new entrants in the savory snacks market in India,
2009
The Indian savory snacks market has presence of large multinationals such as PepsiCo. These
companies have developed and acquired extensive product portfolios, and built brands with large
marketing and advertising budgets. A new entrant may find it difficult to differentiate its products, although
some smaller players have succeeded by emphasizing artisanal production techniques or unusual
ingredients (for example Kettle Foods offers hand-cooked potato chips, and chips made from root
vegetables). New entrants may also be able to take advantage of emerging trends in Western countries,
with consumers becoming increasingly focused on healthy eating and organic food, and the demand for
convenience food continues to grow as a result of consumers' time pressed modern lifestyles. Gaining
access to distribution channels may be difficult as retail space is a finite resource, which means that new
entrants must persuade the stores to replace established brands to make way for a new product. Overall,
the likelihood of new entrants is moderate.

Substitutes
Figure 10: Factors influencing the threat of substitutes in the savory snacks market in India, 2009
Retailers are compelled to cater to consumer demands, and therefore sales of savory snacks are
threatened by many substitutes, including confectionery, fruit, and beverages. All these products are
available at relatively similar prices, and therefore it is not costly for a retailer to switch to substitutes. For
example a retailer might stock more confectionery products and fewer potato chips. The fast spreading
consciousness for healthy, sugar and salt free meals influences the snacks market. More people are
switching to healthier options, like fruits. Moreover, compared to savory snacks, the substitutes can have
benefits such as easier display (for example it is relatively easy to display compact candy bars than fluffy
packs of potato chips). However there are also some disadvantages, for example fruits often require
chilled display, and its shorter lifetime means that it is less able to ride out small fluctuations in consumer
demand. Overall, there is a strong threat from substitutes.

Rivalry
Figure 11: Drivers of degree of rivalry in the savory snacks market in India, 2009
The Indian savory snacks market has the presence of large multinationals such as PepsiCo. The leading
players tend to offer a diverse range of savory snacks products, and may operate in other business areas
as well. This diversification defends their performance against competition pressures in any one market.
Fixed costs are high in this market, as most companies own large production facilities, and the need to
divest such assets on exiting the Indian market constitutes an exit barrier and increases rivalry to a
certain degree. The majority of these companies are geographically diversified which weakens rivalry to
some extent. The strong market growth in recent years also eases rivalry to a certain degree. Overall,
there is a moderate degree of rivalry in the market.

LEADING COMPANIES
LEADING COMPANIES
Pepsico, Inc.
Table 6: Pepsico, Inc.: key facts
Head office: 700 Anderson Hill Road, Purchase, New York 10577, USA
Telephone: 1 914 253 2000
Fax: 1 914 253 2070
Local office: PepsiCo India, 3B, DLF Corporate Park, S Block, Qutab Enclave,
Phase-III, Gurgaon – 122002, Haryana, IND
Telephone: 91 124 288 0699
Website: www.pepsico.com
Financial year-end: December
Ticker: PEP
Stock exchange: New York
Source: company website DATAMONITOR
PepsiCo is one of the leading global beverage, snack and food companies. It manufactures, markets, and
sells a variety of salty, sweet and grain-based snacks; and carbonated and non-carbonated beverages in
approximately 200 countries across the world. The company has its largest operation in North America
(the US and Canada), Mexico and the UK.
PepsiCo operates through three business units: PepsiCo Americas Foods (PAF), PepsiCo Americas
Beverages (PAB), and PepsiCo International (PI). The company's three business units are further divided
into six reportable segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA),
Latin America Foods (LAF), PepsiCo Americas Beverages (PAB), Europe, and Asia, Middle East and
Africa (AMEA).
The company's PAF business division includes FLNA, QFNA, and LAF, including Sabritas and Gamesa
businesses in Mexico.
FLNA markets and distributes branded snacks. These snacks include Lay's potato chips, Doritos tortilla
chips, Tostitos tortilla chips, Cheetos cheese flavored snacks, Fritos corn chips, branded dips, Ruffles
potato chips, Quaker Chewy granola bars, and Sun Chips multigrain snacks. In addition, FLNA's joint
venture with Strauss Group produces and sells Sabra refrigerated dips. FLNA branded products are sold
to independent distributors and retailers. FLNA also owns or leases approximately 40 food manufacturing
and processing plants and approximately 1,830 warehouses, distribution centers and offices.

LEADING COMPANIES
QFNA manufactures, markets, and sells cereals, rice, pasta and other branded products in the US and
Canada. QFNA's products also include Quaker oatmeal, Aunt Jemima mixes and syrups, Cap'n Crunch
cereal, Quaker grits, Life cereal, Rice-A-Roni, Pasta Roni and Near East side dishes. The company sells
all these products to independent distributors and retailers. QFNA utilizes approximately 25
manufacturing plants and production processing facilities in North America.
LAF markets and sells salty and sweet snack brands including Gamesa, Doritos, Cheetos, Ruffles,
Sabritas and Lay’s in Brazil, Argentina, Colombia, Peru and Venezuela. It owns or leases approximately
50 food manufacturing and processing plants and approximately 640 warehouses, distribution centers
and offices.
PAB division includes PepsiCo Beverages North America (PBNA) and Latin American beverage
businesses. PAB sells beverage concentrates, fountain syrups and finished goods under various
beverage brands including Pepsi, Mountain Dew, Gatorade, Tropicana Pure Premium, Lipton, Sierra Mist,
Tropicana juice drinks, Naked juice, Propel, Dole and SoBe Lifewater. PAB also manufactures or uses
contract manufacturers to market and sell ready-to-drink tea, coffee and water products through joint
ventures with Unilever (under the Lipton brand name) and Starbucks. In addition, the business division
has licensed the Aquafina water brand to its bottlers.
PAB owns or leases approximately 20 plants and production processing facilities and approximately 65
warehouses, distribution centers and offices. In addition, the company has an ownership interest in
approximately 80 bottling plants and 220 distribution centers. The company’s contract manufacturers or
co-packers also own or lease approximately 55 plants and production processing facilities and
approximately 50 warehouses and distribution centers.
The PI business division includes PepsiCo's businesses in Europe, and AMEA. Europe markets and sells
salty and sweet snack brands including Doritos, Cheetos, Ruffles, Lay’s and Walkers. It also sells
beverage concentrates and fountain syrup under various beverage brands including Pepsi, 7UP and
Tropicana. In addition, Europe licenses the Aquafina water brand to certain of its authorized bottlers. It
also manufactures and markets ready-to-drink tea products through an international joint venture with
Unilever (under the Lipton brand name). In Europe, the company owns or leases approximately 40 plants
and 370 warehouses, distribution centers and offices. In addition, it utilizes one plant and production
processing facility and two distribution centers that are co-owned or co-leased with a joint venture partner.
AMEA manufactures and markets salty and sweet snack brands including Lay's, Kurkure, Chipsy, Red
Rock Deli, Cheetos, Doritos, Ruffles and Smith’s. The division also manufactures, markets, and sells
beverage concentrates, fountain syrups and finished goods under the brands Pepsi, 7UP, Mirinda and
Mountain Dew. These brands are sold to authorized bottlers, independent distributors and retailers.
AMEA owns or leases approximately 80 plants and 1,100 warehouses, distribution centers and offices. It
also utilizes approximately 40 properties owned by contract manufacturers or co-packers.

LEADING COMPANIES
PepsiCo manufactures and markets range of soft drinks brands globally, through its beverage units, PAB
and PI. Its North American brands include Pepsi, Mountain Dew, Sierra Mist, Izze, SoBe, Mug, Tropicana,
Dole and Ocean Spray. International soft drinks brands include Pepsi, Mirinda, 7UP, Teem, Fruko, Shani,
Fiesta, Evervess and Manzanita Sol.
The company has significant customer base. In 2009, the company’s sales to top five retail customers
accounted for approximately 33% of its revenues from North America, with Wal-Mart (including Sam’s
Club) representing approximately 19%.
In 2010, PepsiCo India Holdings introduced four new flavours of potato chips under the Lay's brand
name. The flavours are - Mastana Mango, Hip Hop Honey & Chilli, Cheesy Mexicana and, Tangy Twist.
International Dairy and Juice Limited (IDJ), a PepsiCo-Almarai joint venture, acquired 75% of a Jordanian
dairy producer, Teeba Investment for Developed Food Processing Company (Teeba), in 2009.
Meanwhile, PepsiCo formed a strategic alliance with Calbee Foods to jointly produce and sell a range of
food products such as potato chips, vegetable snacks, breakfast cereal and prawn crackers in Japan.
Key Metrics
PepsiCo generated revenues of $43.2 billion in the financial year (FY) ended December 2009, a decrease
of 0.04% as compared to 2008. The company's net income totaled $5.9 billion in FY2009, an increase of
15.6% over 2008.
FLNA division accounted for 30.6% of the total revenues in FY2009. Revenues from FLNA division
reached $13.2 billion in FY2009, an increase of 5.7% over 2008.
LAF division accounted for 13.2% of the total revenues in FY2009. Revenues from LAF division reached
$5.7 billion in FY2009, a decrease of 3.3% as compared to 2008.
Europe division accounted for 15.6% of the total revenues in FY2009. Revenues from Europe division
reached $6.7 billion in FY2009, a decrease of 2.4% as compared to 2008.
AMEA division accounted for 12.9% of the total revenues in FY2009. Revenues from AMEA division
reached $5.6 billion in FY2009, an increase of 9% over 2008.
All other countries (including India and excluding the US, Mexico, Canada and the UK) accounted for
31.8% of the total revenues in FY2009. Revenues from all other countries reached $13.8 billion in
FY2009, an increase of 7.4% as compared to 2008.

LEADING COMPANIES
Table 7: Pepsico, Inc.: key financials ($)
$ million 2005 2006 2007 2008 2009

Revenues 32,562.0 35,137.0 39,474.0 43,251.0 43,232.0
Net income (loss) 4,078.0 5,642.0 5,658.0 5,142.0 5,946.0
Total assets 31,727.0 29,930.0 34,628.0 35,994.0 39,848.0
Total liabilities 17,476.0 14,562.0 17,394.0 23,412.0 22,406.0
Employees 157,000 168,000 185,000 198,000 203,000
Source: company filings DATAMONITOR
Table 8: Pepsico, Inc.: key financial ratios
Ratio 2005 2006 2007 2008 2009

Profit margin 12.5% 16.1% 14.3% 11.9% 13.8%
Revenue growth 11.3% 7.9% 12.3% 9.6% N.M
Asset growth 13.4% (5.7%) 15.7% 3.9% 10.7%
Liabilities growth 20.8% (16.7%) 19.4% 34.6% (4.3%)
Debt/asset ratio 55.1% 48.7% 50.2% 65.0% 56.2%
Return on assets 13.7% 18.3% 17.5% 14.6% 15.7%
Revenue per employee $207,401 $209,149 $213,373 $218,439 $212,966
Profit per employee $25,975 $33,583 $30,584 $25,970 $29,291

LEADING COMPANIES
Figure 12: Pepsico, Inc.: revenues & profitability
Figure 13: Pepsico, Inc.: assets & liabilities

LEADING COMPANIES
Haldiram’s Food International Limited
Table 9: Haldiram’s Food International Limited: key facts
Head office: 880, Haldiram House, Small Factory Area, Bhandara Road, Nagpur
440 008, Maharashtra, IND
Telephone: 91 0712 268 1191
Fax: 91 0712 268 0218
Website: www.haldirams.com
Financial year-end:
Haldiram’s Food International is one of India’s largest producers and marketer of candy & confectionery,
processed food and snacks. The company also owns and operates a chain of retail outlets and
restaurants. The company exports its products to Canada, Australia, New Zealand, Italy, Sri Lanka, the
US, Malaysia, Poland, Singapore and Hong Kong among others. The company is headquartered in
Nagpur, India.
Haldiram’s product line comprises of sweets, salty snacks, crackers, fruit juices and ready to drink
beverages, vermicelli, crunchy snack sticks, cream doughnuts, coated and salty nuts, sandwich bread,
cream rolls, spicy dry fruit mixtures, spicy cornflakes mixtures, milk breads, puffs, and pizza base. The
company markets its products under the flagship brand Haldiram’s.
Key Metrics
As Haldiram’s Food International is a private company, it is not obligated to release any financial data.

LEADING COMPANIES
ITC Limited
Table 10: ITC Limited: key facts
Head office: 37 Jawaharlal Nehru Road, Virginia House, Kolkata 700071, West
Bengal, IND
Telephone: 91 33 2288 9371
Fax: 91 33 2288 2358
Website: www.itcportal.com
Financial year-end: March
Ticker: 500875
Stock exchange: Bombay
ITC is one of India's foremost private sector companies. The group's products are sold in many other
Asian countries apart from India.
The group's business is divided into five segments: FMCG; agribusiness; paperboards, paper and
packaging; hotels; and others.
FMCG segment offers various tobacco products including value-priced cigarettes and roll-your-own
tobacco products. ITC's cigarettes are produced in its factories at Bangalore, Munger, Saharanpur and
Kolkata. The group's portfolio of cigarette brands includes Insignia, India Kings, Gold Flake, Navy Cut and
Scissors. Outside India, the FMCG segment has operations in UAE, Saudi Arabia, Kuwait, Bahrain,
Oman and Qatar.
Apart from tobacco products, the group offers lifestyle retailing, branded apparels, greeting cards, gifts
and stationery items, incense sticks, and packaged foods (staples, confectionery, snack foods, ready to
eat foods) through FMCG - others segment. ITC's lifestyle retailing business has established a nationwide
retailing presence through its Wills Lifestyle and John Players chain of retail stores. John Players offers
branded clothes exclusively for men including casual wear, party wear and work wear. The note books,
greeting cards, processed and packaged foods are offered under brands like Classmate, Paperkraft,
Aashirvaad, Kitchens of India and Sunfeast.
The food business of the group is represented through four categories: ready to eat foods, staples,
confectionary, and snack foods. The group offers ready to eat foods under the Kitchens of India brand
name; staples under the Aashirvaad brand name; confectionary products under the brand name mint-o
and Candyman; and snack foods products under Sunfeast and Bingo brand names.

LEADING COMPANIES
The agribusiness segment is engaged in the business of agricultural commodities such as rice, soya,
wheat, coffee, and leaf tobacco. In addition, the segment exports food grains, processed fruits, marine
products and nuts. Its major customers include Cargill, Marubeni and Toepfer, who source agriculture
commodities and food products from India. It exports frozen as well as cooked shrimps and other seafood
products to Japan, US and Europe. ITC's agribusiness segment has strong backward linkages with the
farmers. Networking with the farming community has enabled ITC to build a highly cost effective
procurement system called e-Choupal.
The group's paperboard products include packaging boards, coated folding box boards, solid bleached
sulphate boards, white lined chipboards, liquid packaging boards, poly extruded coated boards for food
and barrier packaging cast coated papers and boards. ITC's paperboard board and specialty papers are
used in the manufacture of cigarettes, decorative laminates, electrical equipment, fireworks and
automotive filters. They are also used for fine printing, packaging and carbonizing. The group exports
cigarette tissues and decor paper for laminates to Iran, Indonesia, Philippines, Nepal, Bhutan and
Bangladesh. ITC's packaging business converts over 50,000 tons of paper and paperboard per annum
into a variety of value-added packaging solutions for the food and beverage, personal products, cigarette,
liquor and IT packaging industries. It has also entered the flexible and corrugated cartons business.
The hotels segment operates over 100 hotels across 80 locations in India, operating under four brands.
These include ‘ITC Hotel’ at the top end, ‘WelcomHotel’ in the five star category, ‘Fortune’ in the mid
market segment and ‘WelcomHeritage’ in the heritage leisure segment. In addition, the business has co-
branding agreement with two international brands ‘The Luxury Collection’ and ‘Sheraton’, franchised from
Starwood Hotels & Resorts, a global hospitality chain.
The other businesses of the companies include information technology (IT) services, investments, golf,
resorts and real estate. The group operates its IT business through, ITC InfoTech, which provides
services for its clients with a strategic focus on customer relationship management (CRM), product life
cycle management (PLM) and engineering services, enterprise resource planning (ERP), supply chain
management (SCM), E-Business - business to business (B2B), business to customers (B2C) and
community portals and business process outsourcing (BPO).
Key Metrics
ITC Ltd generated revenues of $3.9 billion in the financial year (FY) ended March 2010, an increase of
15.6% as compared to the previous year. The company's net income totaled $853.3 million in fiscal 2010,
an increase of 25.4% over 2009.
The company’s revenues from FMCG – Others business segment accounted for 19.1% of the total
revenues generated by the company in FY2010. Revenues from FMCG – Others business segment
reached $749.5 million in FY2010, an increase of 20.6% as compared to the previous year.

LEADING COMPANIES
Table 11: ITC Limited: key financials ($)
$ million 2006 2007 2008 2009 2010

Revenues 2,177.7 2,667.2 3,120.8 3,389.2 3,917.3
Net income (loss) 469.9 564.0 646.4 680.6 853.3
Total assets 2,746.3 3,156.0 3,696.9 4,123.6 4,872.0
Total liabilities 841.8 954.5 1,158.3 1,225.3 1,886.4
Table 12: ITC Limited: key financials (Rs.)
Rs. million 2006 2007 2008 2009 2010

Revenues 106,379.9 130,294.8 152,452.9 165,561.4 191,358.7
Net income (loss) 22,953.8 27,552.6 31,577.6 33,245.9 41,681.8
Total assets 134,154.5 154,169.7 180,594.3 201,439.1 237,999.2
Total liabilities 41,122.4 46,628.1 56,584.2 59,857.9 92,152.3
Table 13: ITC Limited: key financial ratios
Ratio 2006 2007 2008 2009 2010

Profit margin 21.6% 21.1% 20.7% 20.1% 21.8%
Revenue growth 27.9% 22.5% 17.0% 8.6% 15.6%
Asset growth 14.3% 14.9% 17.1% 11.5% 18.1%
Liabilities growth 10.1% 13.4% 21.4% 5.8% 54.0%
Debt/asset ratio 30.7% 30.2% 31.3% 29.7% 38.7%
Return on assets 18.3% 19.1% 18.9% 17.4% 19.0%

LEADING COMPANIES
Figure 14: ITC Limited: revenues & profitability
Figure 15: ITC Limited: assets & liabilities

DISTRIBUTION
MARKET DISTRIBUTION
Independent Retailers form the leading distribution channel in the Indian savory snacks market,
accounting for a 62% share of the total market's value.
Convenience Stores accounts for a further 16.9% of the market.
Table 14: India savory snacks market distribution: % share, by value, 2009
Channel % Share
Independent Retailers 62.0%
Convenience Stores 16.9%
Supermarkets / hypermarkets 12.2%
Others 8.9%
Total 100%
Figure 16: India savory snacks market distribution: % share, by value, 2009

MARKET FORECASTS
MARKET FORECASTS
Market value forecast
In 2014, the Indian savory snacks market is forecast to have a value of $1,017 million, an increase of 90%
since 2009.
The compound annual growth rate of the market in the period 2009–14 is predicted to be 13.7%.
Table 15: India savory snacks market value forecast: $ million, 2009–14
Year $ million Rs. million € million % Growth

2009 535.4 26,151.9 385.0 17.1%
2010 618.8 30,229.7 445.0 15.6%
2011 705.6 34,467.8 507.4 14.0%
2012 801.5 39,152.7 576.4 13.6%
2013 905.3 44,224.8 651.1 13.0%
2014 1,017.0 49,678.0 731.4 12.3%
CAGR: 2009–14 13.7%
Figure 17: India savory snacks market value forecast: $ million, 2009–14

MARKET FORECASTS
Market volume forecast

In 2014, the Indian savory snacks market is forecast to have a volume of 196.7 million kilograms, an
increase of 64.3% since 2009.
The compound annual growth rate of the market in the period 2009–14 is predicted to be 10.4%.
Table 16: India savory snacks market volume forecast: million kilograms, 2009–14
Year million kilograms % Growth

2009 119.7 13.2%
2010 134.1 12.0%
2011 148.7 10.9%
2012 166.2 11.8%
2013 181.2 9.0%
2014 196.7 8.6%
CAGR: 2009–14 10.4%
Figure 18: India savory snacks market volume forecast: million kilograms, 2009–14

MACROECONOMIC INDICATORS
Table 17: India size of population (million), 2005–09
Year Population (million) % Growth

2005 1,091.0 1.6%
2006 1,107.6 1.5%
2007 1,124.1 1.5%
2008 1,140.6 1.5%
2009 1,156.9 1.4%
Table 18: India gdp (constant 2000 prices, $ billion), 2005–09
Year Constant 2000 Prices, $ billion % Growth

2005 648.8 9.1%
2006 711.8 9.7%
2007 776.8 9.1%
2008 832.5 7.2%
2009 892.5 7.2%
Table 19: India gdp (current prices, $ billion), 2005–09
Year Current Prices, $ billion % Growth

2005 764.4 15.7%
2006 872.7 14.2%
2007 1,127.4 29.2%
2008 1,244.6 10.4%
2009 1,403.0 12.7%

Table 20: India inflation, 2005–09
Year Inflation Rate (%)

2005 3.3%
2006 6.9%
2007 8.1%
2008 8.4%
2009 10.9%
Table 21: India consumer price index (absolute), 2005–09
Year Consumer Price Index (2000 = % Growth

100)
2005 115.6 3.3%
2006 123.6 6.9%
2007 133.6 8.1%
2008 144.8 8.4%
2009 160.6 10.9%
Table 22: India exchange rate, 2005–09
Year Exchange rate ($/Rs.) Exchange rate (€/Rs.)

2005 44.1154 54.8337
2006 45.3188 56.8596
2007 41.3570 56.5898
2008 43.8145 64.1115
2009 48.8500 67.9264

APPENDIX
APPENDIX
Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated,
analyzed, cross-checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys
and supported by analysis from industry experts using highly complex modeling & forecasting tools,
Datamonitor’s in-house databases provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst

commentary, company profiles and macroeconomic & demographic information, which enable our
researchers to build an accurate market overview
Definitions – Market definitions are standardized to allow comparison from country to country. The
parameters of each definition are carefully reviewed at the start of the research process to ensure they
match the requirements of both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest
industry events and trends
Datamonitor aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – Datamonitor has developed powerful tools that allow quantitative
and qualitative data to be combined with related macroeconomic and demographic drivers to create
market models and forecasts, which can then be refined according to specific competitive, regulatory
and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and
up-to-date

APPENDIX
Industry associations
European Snacks Association
6 Catherine Street, London, WC2B 5JJ, United Kingdom
Tel.: 44 20 7420 7220
Fax: 44 20 7420 7221
http://www.esa.org.uk
Related Datamonitor research
Industry profiles
Global Savory Snacks
Savory Snacks in Europe
Savory Snacks in Asia-Pacific
Savory Snacks in the United Kingdom
Savory Snacks in Sweden
Savory Snacks in Spain
Savory Snacks in Portugal
Savory Snacks in Norway
Savory Snacks in the Netherlands
Savory Snacks in Italy
Savory Snacks in Ireland
Savory Snacks in Germany
Savory Snacks in France
Savory Snacks in Denmark
Savory Snacks in Belgium
Savory Snacks in Russia
Savory Snacks in Poland
Savory Snacks in Hungary
Savory Snacks in the Czech Republic
Savory Snacks in New Zealand

APPENDIX
Savory Snacks in Australia
Savory Snacks in Taiwan
Savory Snacks in South Korea
Savory Snacks in Singapore
Savory Snacks in Japan
Savory Snacks in Hong Kong
Savory Snacks in China
Savory Snacks in Venezuela
Savory Snacks in Peru
Savory Snacks in Colombia
Savory Snacks in Chile
Savory Snacks in Brazil
Savory Snacks in the United States
Savory Snacks in Mexico
Savory Snacks in Canada
Savory Snacks in South Africa

APPENDIX
Disclaimer
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permission of the publisher, Datamonitor plc.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed.
Please note that the findings, conclusions and recommendations that Datamonitor delivers will be
based on information gathered in good faith from both primary and secondary sources, whose
accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability
whatever for actions taken based on any information that may subsequently prove to be incorrect.

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INDUSTRY PROFILE

Reference Code: 0102-0199

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 1

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 2

FIVE FORCES ANALYSIS 15

Haldiram’s Food International Limited 26

Market value forecast 32

Market volume forecast 33

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 3

Related Datamonitor research 37

India - Savory Snacks 0102 - 0199 - 2009

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Table 2: India savory snacks market volume: million kilograms, 2005–09 11

Table 5: India savory snacks market share: % share, by value, 2009 14

Table 7: Pepsico, Inc.: key financials ($) 24

Table 8: Pepsico, Inc.: key financial ratios 24

Table 10: ITC Limited: key facts 27

Table 11: ITC Limited: key financials ($) 29

Table 12: ITC Limited: key financials (Rs.) 29

Table 13: ITC Limited: key financial ratios 29

Table 17: India size of population (million), 2005–09 34

Table 19: India gdp (current prices, $ billion), 2005–09 34

Table 20: India inflation, 2005–09 35

Table 22: India exchange rate, 2005–09 35

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 5

Figure 2: India savory snacks market volume: million kilograms, 2005–09 11

Figure 5: India savory snacks market share: % share, by value, 2009 14

Figure 12: Pepsico, Inc.: revenues & profitability 25

Figure 13: Pepsico, Inc.: assets & liabilities 25

Figure 14: ITC Limited: revenues & profitability 30

Figure 15: ITC Limited: assets & liabilities 30

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 6

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 7

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 8

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 9

Table 1: India savory snacks market value: $ million, 2005–09

Year $ million Rs. million € million % Growth

CAGR: 2005–09 18.3%

Source: Datamonitor DATAMONITOR

Figure 1: India savory snacks market value: $ million, 2005–09

Source: Datamonitor DATAMONITOR

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 10

Table 2: India savory snacks market volume: million kilograms, 2005–09

Year million kilograms % Growth

CAGR: 2005–09 15.7%

Source: Datamonitor DATAMONITOR

Figure 2: India savory snacks market volume: million kilograms, 2005–09

Source: Datamonitor DATAMONITOR

India - Savory Snacks 0102 - 0199 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied Page 11

Source: Datamonitor DATAMONITOR

Source: Datamonitor DATAMONITOR

India - Savory Snacks 0102 - 0199 - 2009