Business · Companies · 3 hrs ago
Rising costs push Indian snack makers to rethink ₹5 packs
Indian snack makers are struggling to make their smallest packs profitable as the costs of potatoes, cooking oil and packaging rise.
The pressure is focused on ₹5 and ₹10 packs, which account for about 60–65% of snack and biscuit sales by volume.
These low-priced packs are especially important to price-sensitive consumers and are a major source of revenue for companies including Balaji Wafers, Parle Products and Gopal Snacks.
Brands have already cut the weight of some ₹5 packs by more than half over the past three to four years, but further cuts could put off customers.
Some manufacturers are offering retailers better incentives on larger packs to encourage them to stock and promote those products, though Parle says it has kept margins the same across pack sizes.
Others are redesigning pouches to reduce packaging costs, while some are expanding premium products for modern retail and quick-commerce sales.
These changes aim to protect profits without relying on further cuts to the amount in small packs.
Rising costs are squeezing margins on India’s small snack packs, prompting manufacturers to reconsider their pricing, packaging and sales strategies.
₹5 and ₹10 packs account for roughly 60-65% of biscuit and snack sales volumes, according to industry executives.
Potato prices rose 30-40% and edible oil costs rose 25-35% over the past six months.
Some manufacturers are reportedly cutting retailer margins on ₹5 packs and offering better incentives on larger packs.
Parle Products says it has kept retailer margins the same across pack sizes, warning that differential margins could reduce its visibility in neighbourhood stores.
- Who
- Indian biscuit and snack manufacturers, including Balaji Wafers, DFM Foods and Parle Products.
- What
- Rising costs are prompting manufacturers to rethink small-pack margins, packaging and product sizes, and to encourage sales of larger packs.
- When
- The article was published on 5 November 2026. Input costs had risen sharply over the previous six months.
- Where
- India, with the article datelined Bengaluru.
- Why
- Higher potato, edible oil and packaging costs are squeezing margins on low-priced packs.
Manufacturers shifting retailer incentives to larger packs
Parle Products
Retailer margins on ₹5 packs
Manufacturers shifting retailer incentives to larger packs
A distributor said Balaji Wafers and DFM Foods had cut margins on these packs by about 10% and shifted incentives to larger packs.
Parle Products
Parle Products said it had not cut margins on smaller packs and offered the same margin across pack sizes.
Effect on store sales
Manufacturers shifting retailer incentives to larger packs
The distributor said retailers naturally stop displaying ₹5 packs when they earn more from a ₹10 pack.
Parle Products
Parle Products’ Mayank Shah said differential margins could make retailers lose interest in the brand.
Brands including Lay’s and Yellow Diamond more than halved the weight of their ₹5 packs, from 25-30g to 11-14g.
Cold-storage potato prices rose 30-40% and edible cooking oil costs rose 25-35%.
A Mint report quoted Prataap Snacks chief executive Amit Kumat saying plastic film for snack wrappers had become 20% costlier in recent weeks and 30-40% more expensive than a year earlier.
Balaji Wafers and DFM Foods reportedly cut retailer margins on ₹5 packs by about 10% and offered better incentives on ₹10 and ₹20 packs.
- Small-pack sales share
- ₹5 and ₹10 packs account for roughly 60-65% of biscuit and snack sales volumes.
- Balaji Wafers
- ₹5 and ₹10 packs account for nearly 65% of annual revenue.
- Parle Products
- The value segment generates up to 75% of revenue.
- Gopal Snacks
- ₹5 wafer packs account for 60% of revenue.
- Potato price increase
- 30-40% over the past six months.
- Edible oil cost increase
- 25-35% over the past six months.
What people are saying
Reducing grammage is a dangerous strategy. There comes a point where you open a pack and find only five broken chips inside.
Companies have trimmed margins on ₹5 pouches by about 10% and shifted that margin to larger packs.
We have not cut margins on smaller packs. We continue to offer the same margin across pack sizes.