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Britannia's crunchy growth plan
With competitive pressure growing in the biscuit and dairy segments, Vinita Bali, managing director of Britannia Industries, believes innovation will drive growth.
Over recent years, the company has attempted to do that - identifying changing consumer habits and launching new products. In an interview to Business Standard, she lists her priorities. Excerpts:
Your profitability was affected last year due to input price pressures. Will you raise prices this year?
In the past year, we have had four or five rounds of price hikes. Our business is impacted by sugar, wheat and milk prices.
Though sugar prices, we understand, have softened on account of a good harvest this year, wheat is a bit of a concern -- the quality of grains is small, on account of the heat wave in the north.
Milk prices, on the other hand, have shot up to as high as 35 per cent between last year and now in states such as Maharashtra.
This is a bit worrisome. I am hoping the whole food and food pricing scenario will stabilise shortly. We are keeping our fingers crossed.
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Britannia's crunchy growth plan
What do you have in store for markets in the coming months?
Variety and taste are major factors in the food business. So, expect some action from us, both in the bakery and dairy segments.
In the last quarter itself, we launched an assortment of products from cookies to choco dekkers to Actimind, a health drink, milk in tetrapaks, a variety of cheese spreads, new flavour variants of Tiger biscuits, veg cakes, Nutri Choice Nature Spice, which is a cream cracker, etc.
We may not launch the same number of products every quarter. But, we will keep the momentum going.
Is your focus on innovation a response to Parle products' volume play?
Volume is very much an inherent part of our strategy. There is no question about that. The difference between them (Parle) and us is that their portfolio is skewed to one product, whereas we have several in portfolio. We call them our power brands.
We have seven of them at the moment. All of them are rock-solid products, with clear positioning. If Good Day defines a cookie experience, Milk Bikkis is about the goodness of milk in biscuits, Tiger is an alternative in the glucose market, while NutriChoice is our foray into creating healthier options for consumers in biscuits.
Treat, on the other hand, is an indulgent product, Marie is a staple, while Britannia 50:50 is a salty-sweet product. How many companies in the biscuit segment can boast of a portfolio like this? You can't be a significant food player by selling plain milk and biscuits alone.
There has to be a variety on offer.
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Britannia's crunchy growth plan
How are consumers responding to these products?
I don't think we would have been able to double our turnover from Rs 1,700 crore (Rs 17 billion) to Rs 3,200 crore (Rs 32 billion) in the last five years had consumers not accepted our products.
Which is why we are clear that we would like to occupy spaces where we can use our core competency of making delightful products that taste good, combining it with a certain degree of functionality, because consumers want that.
We have no regrets about the space we occupy.
But, are you doing enough to make your products available everywhere and at all price points?
We have always had a Rs 2, Rs 3, Rs 5 and Rs 10 price point in our portfolio. So, it is not as if we are not addressing these segments at all. The biscuit business is about affordibility and acessibility. So, in terms of distribution, we are looking to push our products everywhere.
Britannia products are available in places where they weren't earlier -- at bus stations, cafeterias, canteens, coffee shops, railway platforms and even BPOs. This distribution drive is across urban and rural areas.
On the pack front, we see a new personal consumption opportunity emerging. Basically, there is a market out there of consumers who wouldn't mind buying, say, a pack of three jim-jams or four bourbons for Rs 5.
This is in contrast to the traditional low-unit packs meant for in-home consumption. So, we are moving with the times.
