The book that Vinita Bali, managing director of Britannia Industries Ltd, is currently reading couldn't be more appropriate: 'Too Big to Fail'.
Although that bestseller by New York Times columnist Andrew Ross Sorkin tells the inside story of how Wall Street and Washington saved the financial system -- and themselves, its title aptly sums up Bali's own half-a-decade tenure at the Bangalore-based foods conglomerate.
The cookie had all but crumbled for Britannia in 2005.
There had been no formal leadership for almost 18 months after Sunil Alagh quit as managing director under a cloud; national players ITC Foods and Parle, as well as regional ones, were eating away its marketshare; worse, ownership differences between Groupe Danon and Nusli Wadia were simmering.
But, when Wadia approached her for the top job at Britannia, Bali -- then worldwide marketing director for Coca-Cola reporting directly to the global chairman -- didn't think twice. Apart from the challenge of turning things around at a potentially great company, it also gave her an opportunity to tend to her ailing mother.
Observers say before she took over five-and-a-half years ago, Britannia made the mistake of being in a comfort zone of eight to10 per cent growth and took things for granted. Bali doesn't deny that she woke the company from a deep slumber.
"We had all the ingredients. It was just a matter of choice on how you want to steer the company. You want to grow by eight to nine per cent or by 17-18 per cent? We chose to take the more aggressive path," she says.
Bali has walked the talk. In 2005, Britannia had a top line of Rs 1,600 crore (Rs 16 billion). That more than doubled to Rs 3,800 crore (Rs 38 billion) in the last financial year -- a compounded annualised growth of 17.5 per cent. That, she says, is creditable as the company had some really bad years due to commodity inflation.
"We were badly hit in 2006-07 and thereafter," Bali adds. What she doesn't say is that operations remained on an even keel even though the company went through a huge ownership tussle that finally ended in an acrimonious split.
Bali says the simple thing she has done is take the company closer to the consumer. "For example, we have had a slogan 'Eat healthy, Think Better' since 1997. But, frankly did very little with it until 2006. It is good to have a great slogan, but you should know how to activate it," she says.
Under her stewardship, Britannia has fortified many of its products, taken out trans-fat from several more, added micro-nutrients and has constantly innovated as consumers turn towards healthier options. "It is at what level you talk to consumers. We are expanding our depth and breadth of understanding of what the consumer wants. It is how you respond to changes. It is about results and not the efforts that make a difference," she says.
The results vis-à-vis competition has, however, been a mixed one. Though Britannia has a 31 per cent marketshare, Parle Industries has gained clear volume leadership in the Rs 10,000-crore (Rs 100 billion) Indian biscuit market in recent times.
Bali concedes as much. "If you include the glucose segment, yes, we are the second-largest player in the industry. However, excluding that segment, we have 40 per cent share in the industry," she says.
The mass market glucose segment has been a sort of Achilles Heel for Britannia and it lags pretty much behind the Parle Group in this segment. Britannia, with its 'Tiger' brand, has been trying various ways to narrow the gap, but without very much success.
According to industry analysts, the glucose segment is a Rs 700-crore (Rs 7 billion) business for Britannia and it is trying to come up with various product lines to differentiate itself in the marketplace.
"The rate of growth in the glucose biscuit segment has slowed to 29 per cent from the earlier 33 per cent. If one gets a creamier, fortified biscuit at Rs 5, at almost the same cost of a glucose biscuit packet, people are opting for the creamier product," she explained, reasoning to an extent that Britannia is looking at more innovative products and may offer them at a lower cost to offset losing marketshare.
Britannia, according to industry analysts, cannot obviously ignore the mass glucose market as still 30 per cent of its sales come from this segment and will have to figure out ways to keep pace with the market leader.
While that is the case with the mass market glucose segment, Britannia is working pretty hard in the premium segment, which it terms the lifestyle and indulgence segment. Brands like Pure Magic and Chocó Decor are being pushed as competition to chocolates by leveraging festival gift packs, thus creating a value for the brand.
"The growth of the premium segment has not been what the company would have expected. But it is the crucial mid-segment market of Marie, Good Day and Milk Bikis, which have been coming in with good sales," notes an industry analyst.
Dairy is Bali's other focus business. "Britannia has been in the dairy business for three decades, but there hasn't been much headway. We are reinvigorating this segment.
This business is now pushing Rs 200 crore (Rs 2 billion), and has doubled in the last couple of years. We have a regular cheese and a cheese with 30 per cent less fat. This has been replicated with dahi as well as with milk," she adds.
"My marketing strategy is not driven by any bookish knowledge. Rather, I have learnt a lot from telecom companies and how I-Pads and I-Pods have been launched, which has a high degree of consumer connect," she says. Her competitors would do well to watch out for Bali's next move.
