MUMBAI: When Parle Products launched Parle-G in 1939 during the British rule, the firm considered it a responsibility to sell affordable biscuits to Indians.Today, the same value plank has helped the glucose biscuit brand become the first Indian FMCG brand to cross the Rs 5,000-crore mark in retail sales in a year.In 2012, Parle Products sold Rs 5,010 crore worth of its flagship glucose biscuit brand at retail price, besting the entire domestic sales of Dabur or Godrej products and selling three times more than Maggi noodles.This meant sales of more than 100 crore packets across sizes every month, or 14,600 crore biscuits in the entire year, that is, 121 biscuits each for the 1.2 billion Indians.Mayank Shah, group product manager at Parle Products, said the company's realisation was around 60-65 per cent of the retail sale.While Parle-G, with less than $1 billion in annual sales, is nowhere near the world's top-selling brands such as Coca-Cola and Gillette, it has a healthy lead over its closest Indian rivals such as Hindustan Unilever's Wheel and Rohit Surfactants' Ghari Detergent.Started by Mohanlal Dayal Chauhan way back in 1929 at Vile-Parle, a Mumbai suburb, Parle Products first launched an orange candy and then other confectionaries before entering the biscuits segment 10 years later."Launching Parle-G in 1939 was not just a business decision but also a responsibility to sell affordable biscuits to Indians (during British rule) at a time the market was flooded with costly imports," said Ajay Chauhan, executive director at the Rs 8,000-crore Parle Products and a member of the founder's fourth generation clan."Even after 70 years, we haven't digressed from that philosophy and the pricing has helped the brand become a staple today," Chauhan added.This affordability proposition is exactly what has been paying off for Parle-G despite rivals such as ITC and Britannia entering the space. There was a time when Parle-G's dominance was threatened by rival brands, especially Britannia's Tiger, which targeted kids. But when Parle-G sponsored children's television show Shaktimaan on Doordarshan, it literally rescued the brand.The company also managed to keep prices unchanged for over a decade - between 1996 and 2006 - even as the prices of raw materials such as wheat, sugar and milk escalated up to 150 per cent.Net result: Parle-G increased its share from 67 per cent in 2002 to 79 per cent in 2012 while the share of Britannia's Tiger fell to 9 per cent from 26 per cent during the same period. ITC's Sunfeast brand too had over 9 per cent share in the glucose segment last year.Analysts said that Parle's relentless focus on top line has driven its rivals to shift strategy from glucose to other sub-segments such as cream and cookies."Historical analysis of the biscuits category reinforces that even a single margin disruptive player can impact the margin profile of the entire category," Anand Mour of ICICI Securities said in a recent note.

Between FY06 and FY11, Parle Biscuits' EBITDA margin declined by 720 bps to 2.9 per cent in FY11 and Britannia's EBITDA margin declined by 550 bps to 5.5 per cent. "This is despite Parle seeing the highest revenue CAGR of 32 per cent during the period, the highest among FMCG companies," Mour said.

Even rivals agree that it's tough to match Parle-G in pricing."Parle-G has sheer economies of scale which we can't match without impacting our margins," a senior official at ITC Foods said. "At that price point, it is difficult to compete in the category and we would rather focus and invest on our strength and earn profit on products such as cream biscuits," added the official, who didn't wish to be identified.Parle Products said the value-for-money plank has been crucial in growing Parle-G at over 15 per cent compounded annual growth rate in the past five years.Parle's 10 own manufacturing units and around 75 contract manufacturing plants across the country helped it beat rivals in distribution efficiency and cost. While rivals have signed on celebrities, Parle-G has managed to grow its sales with just a simple white-and-yellow striped wrapper with a picture of a baby on it.Yet, there are question marks over Parle-G's potential to keep its growth rate and to become the country's first Rs 10,000-crore FMCG brand mainly because of the increasing popularity of cookies and cream biscuits, which are available at similar price points as glucose biscuits. Another concern is the ability of the 73-year-old Parle-G brand to stay relevant to the next generation of customers. But the company is confident about the brand's future."We saw consumers upgrade to the cookie and cream segment as companies, including Parle, introduced lower-priced products in the past three years, which impacted the glucose category initially. However, Parle-G grew 10 per cent last year despite such a high base," Parle's Shah said.Experts agree. Alpana Parida, president at brand firm DY Works, said that Parle-G is to India what Coca-Cola is to America, "Many of us have grown up with Parle-G and tea at various points of time in our lives. It has an emotional connect to Indians."She said that Parle-G might not grow as fast as the overall biscuit market as cross-category competition increases. "However, it will still be the default biscuit in every house and if the company leverages the brand into other options such as hi-fibre biscuits or other value-added segments, the penetration of the brand will go up," Parida added.Share of Parle-G in the firm's overall sales has declined to about 50 per cent now from more than 70 per cent a decade ago.To stay connected to the new generation, Parle-G last month launched a new advertisement campaign after 10 years. Titled 'Kal Ke Genius', the campaign created by Ogilvy was received well and made waves in the social media platform.Parle also last year launched Parle-G Gold, a premium glucose biscuit that is heavier and has a richer formulation than Parle-G. The biscuit market in India is estimated at Rs 21,000 crore with the glucose segment accounting for 30 per cent of it.