Biscuit battle: Exploring the Nan Khatai business

Leading producers bring conventional recipes in hygienic packaging

KARACHI:

Sometimes, it takes ages to come up with an idea that consumes even longer to evolve into an eventual masterpiece. On other occasions, they are right there in front of you.

In what has become a new category, branded biscuit makers, English Biscuit Manufactures (EBM) and Continental Biscuits Limited (CBL) have ventured into a niche market segment — re-branding traditional recipes.

Tapping into a readily available resource, leading companies seem to be taking what is already stiff competition to the next level with back-to-back launch of traditional Nan Khatai biscuits. Each player is trying to expand its footprint in what a Nielsen research estimated to be over a Rs43-billion market.

Though Nan Khatai is available at established bakeries, the unhygienic processing of this traditional recipe remains a big concern for consumers who are increasingly becoming brand conscious.

However, the local recipe is now available in hygienic packaging across Pakistan, courtesy the economic muscle of market leader EBM and its main competitor CBL– a joint venture between the family of Hasan Ali Khan and Mondel-z International.

CBL Bakeri Range Brand Manager Munib Rizavi said the product has tremendous demand nationwide. “However, it was limited to certain outlets and geographical locations,” said Rizavi. “CBL is trying to make it [Nan Khatai] mainstream while maintaining quality and taste.”

Responding to a question, the brand manager said Bakeri Nan Khatai has now become a key strategic brand in the CBL portfolio – which launched the product last October – adding the product is largely exported as well.

Market welcomes variety of products

Arguably the first tradition recipe, Nan Khatai is not the only product launched recently. The branded biscuit industry has seen phenomenal growth during recent years with several other brands including Oreo, the billion-dollar brand of Mondel-z International, launched during the last couple of years.

The top players have been reporting a double-digit increase in their compound annual growth rate since 2012 – revenue of Sooper, EBM’s flagship product, alone surpassed Rs11 billion milestone in 2014.

Market analysts attribute the growth of branded biscuits category to multiple factors including a transformation in the biscuit-eating habits of the Pakistani consumers, higher consumption of fast moving consumer goods, increasing market penetration and higher volumes.

“The category of branded biscuits has been growing for the past six years,” said Zulfiqar Ansari who is Head of Marketing at EBM, which also launched its own Nan Khatai brand shortly after.

Ansari stated that the idea behind Nan Khatai was the conversion from loose food to high quality packaged food. “The new product is gaining popularity on the back of a growing demand,” said Ansari. “We see it [Nan Khatai] becoming one of the key pillars of our portfolio in coming years,”

Additionally, he noted that the product’s market reception exceeded their expectations.

Eye-witness account

A random visit to Imtiaz Super Market (IMS), Karachi’s largest chain of retail stores, certainly explains the industry’s optimism about this traditional recipe. One can easily find consumers carrying packs of Nan Khatai in their carts as they check out, which, in part, may be a function of excessive indoor promotion by these companies to lure consumers.

“The biscuits usually carter to the likes of high end corporate clients or adults who specifically want to eat Nan Khatai,” an IMS official said of the product’s buyers. “Its sales are way lower than the established brand for it is catering to a niche clientele,” he said.

Though IMS mainly caters to brand conscious customers, the scene in the city’s busy neighbourhoods seems no different.

“In the beginning it was flying off the shelves. But later on, it slowed down a bit,” said Kavi Kumar of Shuja Confectionary Store, a wholesale dealer at Korangi Crossing – the main market for one of the city’s highly populated areas that also has half a dozen bakeries selling loose Nan Khatais.

Kumar said the product is mostly bought by corporate clients, such as contractual canteens running in corporate firms, hotels and cafes. Given the market has been growing for the past few years, good reception may be an indicator that people were waiting for such a product for a while, he said.

By contrast, both companies said launching a product is a lengthy process and the launch timing shows the market was ready for it.

THE WRITER IS A STAFF CORRESPONDENT

Published in The Express Tribune, May 25^th,  2015.

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