Cream biscuits may not be the healthiest food choice, but they certainly seem healthy for manufacturers' bottom lines. Global dairy products maker Kraft Foods announced on Wednesday that it would manufacture and sell its famous 'Oreo' sandwich cookie in India.

Oreo is one of the world's biggest cookie brands - sometimes called the 20th century's most popular - and it has already attained a leadership position in China. It is now sold with the slogan 'Milk's favourite cookie' - in the past, it used to be 'America's favourite cookie'.

The Indian version will be launched through Cadbury India, which is now a subsidiary of the $50-billion US giant. While Oreo is a Kraft product, it will be promoted as a Cadbury brand in India.

"Cadbury is an iconic brand in this category and it was the most appropriate thing to do," Anand Kripalu, president, South Asia & Indo-China, Kraft Foods and managing director of Cadbury India, told newspersons in Mumbai.

Cadbury, once a leading British manufacturer, was acquired by Kraft last year in a deal that raised some controversy, particularly in the UK. Kraft has also dragged Indian competitor Britannia to court over alleged trademark infringement against the latter's Treat-O biscuit. The matter is slated to come up for hearing on 28 April.

In any case, the acquisition of Cadbury has given Kraft the opportunity to launch products other than chocolate-based confectionery, which was Cadbury's mainstay.

The Indian version of Oreo will be suited to Indian pockets. While the imported Oreo costs Rs50 for a 14-pack, the 'Made in India' ones will be available from Rs5 (for three biscuits) to Rs20 for the larger pack. They will be supplied by Jalandhar-based Mrs Bector's Food Specialities.

Kraft, of course, faces considerable competition. The Indian biscuits market is worth Rs11,500 crore; but it is dominated by the plain-vanilla glucose biscuit, to mix a metaphor.

Mumbai-based Parle is the undisputed king of that segment, claiming to have 75 per cent of the market, though it needs to do more to prevent the prolification of spin-offs in small and rural markets.

At the same time, a Nielsen study says fancier biscuits are leading growth in the market, which grew at 17 per cent in 2010. The glucose segment has been growing at a sluggish 8-10 per cent compared with the premium segment's 25-30 per cent. "Our ambitions are to have a sizeable market share in this segment," said Kripalu.

Sanjay Khosla, executive vice president and president, developing markets, Kraft Foods, who was in India recently, said he believed the snacking potential in India was high.

Room for everyone

Mayank Shah, group product manager, Parle Products, seems to agree with the general diagnosis. "For consumers entering the biscuits market, glucose is the access point, beyond which there are better formats - cookies, creams, salted, non-salted, crackers. While glucose is growing, premium biscuits are growing faster. For newer players in the biscuit market, it makes sense to tap the premium market," he said.

Kraft (or Cadbury as you please) is up against other established players as well. Britannia Industries has its Pure Magic and Jim-Jam Treat, and ITC's Sunfeast has a brand extension called Dark Fantasy, which pretty much sit in the same category as Oreo.

In fact, the Oreo is cheaper than Jim-Jams, which are priced at Rs25 for 14 biscuits. This kind of pricing strategy, along with the company's 1.2 million-store reach in urban and rural India, could help the brand reach a wider consumer base.

The company said the launch of Oreo is part of its long-term strategy in India to gradually expand business operations from a pure play confectionery company to a broader foods company that will leverage the global scale of Kraft Foods in India. 

"Our extensive consumer research shows that more and more consumers are looking for new, innovative products. We think Oreo responds well to these preferences with its unique taste and special ritual of twist, lick, and dunk," said Kripalu.