The Covid-19 lockdown last year was a windfall for snack and biscuit manufacturing behemoths like Britannia and Parle Products. As people were forced to stay indoors and were unable to go to restaurants and food courts, they indulged in salted snacks and biscuits. However, Indore-based snack-maker, Prataap Snacks, wasn't as lucky. For the first time, the company's sales dipped to ₹1,200 crore in 2020 from ₹1,400 crore the previous year. The reason for this was the company's over 85% dependence on ₹5 price-point products. The company has always focused on impulsive consumption with its Yellow Diamond chips, extruded snacks and namkeens, which largely happens out of homes. With mobility getting limited and schools, colleges and offices remaining closed, impulsive consumption took a huge hit.
The biggest learning for Amit Kumat, MD and CEO, Prataap Snacks, has been not to keep all his eggs in one basket. The company is now trying hard to reduce its dependence on the ₹5 price point to 60% (over the next three years) by launching bigger pack sizes priced between ₹10 and ₹30. Kumat says that competition (likes of Haldiram and Bikano) benefitted not because they were not overly dependent on smaller packs, they also benefitted because of their larger portfolio of Indian snacks such as namkeens. "Around 60-70% of their revenue comes from namkeen, which people consumed a lot during the lockdown. In our case, only 12-14% of our revenue comes from namkeens," Kumat explains.
Double-edged sword in ₹5 price point; how Prataap Snacks learnt the hard way - Fortune India
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