ITC Sunfeast goes rural to premiumise biscuits, not just dominate mass market

In a category as deeply penetrated as biscuits, one that reaches nearly every Indian household, ITC’s Sunfeast isn’t looking to play it safe. Instead, it’s focussing on rural and semi-urban markets to drive its premium biscuit portfolio, traditionally seen as an urban play. And the reason is simple: “40% of affluent consumers live in Tier-2+ and rural India,” says Ali Harris Shere, chief operating officer, Biscuits and Cakes Cluster at ITC Foods.

While the biscuit category is large, diverse and highly fragmented, ranging from functional digestives to indulgent cookies, the growth game is shifting. Not only are premium products gaining traction beyond metros, but consumers in smaller towns are showing greater willingness to pay for differentiated snacking experiences. “There is a need for premiumisation happening,” Shere says. “The accessibility of premium products is not as much there as the need and the affordability possibly is.”

The company is leaning into rural and Tier 2+ markets not only because the appetite exists, but also because growth in these markets has started to outpace urban. “Urban consumers are a little under pressure as far as consumption is concerned,” says Shere. “Inflation has been high, but salaries and incomes haven’t kept up. And there are other spends such as telecom, personal care, eating out that are taking up a larger share of the wallet.” In contrast, he adds, rural demand is beginning to pick up, aided by a better monsoon outlook and more headroom for premium consumption.

Originally a challenger brand in a market dominated by Parle and Britannia, Sunfeast focused early on creating premium, differentiated sub-categories. Its flagship brands — Dark Fantasy, Mom’s Magic, and Bounce — have all crossed the ₹1,000 crore sales mark individually. “We are the market leader in premium biscuits in India. In creams, the most premium sub-segment, we lead with Dark Fantasy and Bounce,” Shere says. 

Now the company is taking this premium portfolio deeper into rural India. The playbook includes multiple price points to make aspirational products more accessible at ₹5, ₹10, ₹20 and ₹40 packs across brands. “When we launched Dark Fantasy, we started with ₹30. Today, we have an entire back price architecture that helps us penetrate semi-urban and rural (areas),” he explains.

Crucially, ITC’s innovation strategy is not one-dimensional. “We look at it as acceleration versus scale,” says Shere. Acceleration comes from disruptive innovation like the molten chocolate-filled Dark Fantasy Choco Fills, which redefined what a biscuit could be. Scale, on the other hand, comes from “fluent innovation” — small but meaningful tweaks to existing formats. The ‘Evening Marie’ biscuit, flavoured with ajwain and kala jeera, is one such example. It retains the health cues of a traditional Marie biscuit but is tailored for a post-tea craving. “Why do we need the same Marie in the morning and evening? That’s where we saw an opportunity,” he says.

Take Mom’s Magic, which had been around for over a decade. A recent tweak, introducing ghee-roasted nuts, led to a doubling of growth rates in pilot markets within three months, according to Shere.

Beyond product innovation, distribution models are also evolving. While traditional retail remains dominant, 7-8% of ITC’s biscuit business now comes from e-commerce and quick commerce, and that’s growing fast. The company even launched Sunfeast Bake Creations, a digital-only premium cookie brand, to test niche ideas with low distribution friction.

Still, the challenge of being a premium brand in a value-driven market looms large. “You need a symbol of re-evaluation,” says Shere. “The consumer is in a habit loop. Unless we do something that forces them to re-evaluate their existing choice, they won’t switch.”

In a highly commoditised category, ITC is betting that deep insights, product innovation, and pricing flexibility and not just mass advertising, will create that switch. The goal isn’t just to grow faster than the market, but to build what Shere calls the “most preferred bakery brand” in India. Market leadership can wait.