Britannia wants to makes 100th year memorable

Britannia, which is celebrating its centenary year in 2018, will first look at expanding its dairy and bakery businesses, before turning its attention towards new food categories. The attempt is to become a total foods company, as it eyes a well-rounded presence in the market.

The Rs 99-billion Britannia Industries, best known as a bakery and dairy major, is getting future-ready as the packaged food market in the country evolves. Rivals such as ITC and Parle Products have taken steps in this direction, committing investments and resources as well as coming up with new launches in the segment.

Britannia, which is celebrating its centenary year in 2018, will first look at expanding its dairy and bakery businesses, before turning its attention towards new food categories. The attempt is to become a total foods company, as it eyes a well-rounded presence in the market.

"Our vision is to be a global, total foods company and in the past 12-14 months, we have taken affirmative steps in this direction. At the same time we are consolidating categories we are already in," Varun Berry, managing director, Britannia Industries, said.

"The vision is borne out of the exponential growth of macro-snacking in India, as also from our plan to bring to India the best of international food repertoire. Sharper economic growth, greater consumer expectations, busier lifestyles and more in-between meal consumption occasions will inform and fuel our new product development into adjacent food categories, both bakery and non-bakery," Berry said.

Some of the categories that Britannia will enter in the next six to eight months include centre-filled croissants, swiss rolls, muffins and cream wafers. Britannia will also launch value-added dairy products, including dairy drinks and specialised yoghurts in the next two quarters.

"We are also building a pipeline of different formats of cheese, which are in the early stages of product development. We are correcting the prices of some of our (existing) cheese variants to become more competitive," Venkat Shankar, vice-president and head of Britannia's dairy business said.

In categories such as cakes, rusk and breads, where Britannia has a significant presence, the company has a slew of launches planned on the back of new production lines it is putting up at its Pune factory.

"In the cakes business, there is a lot of emphasis on innovation. We are investing more in technology to pip competition in the space," said Jayant Kapre, Britannia's head of breads, cakes and rusk. In-house cake production is expected to go up with the new lines, only a third of the total production now, Kapre said.

Partnerships and acquisitions

Britannia is also looking at partnerships and acquisitions as it seeks a larger footprint in foods, putting past experiences behind, including with Danone and Fonterra. The company now has a joint venture with the Athens-based baking major Chipita for its foray into croissants, and is expected to look at alliances in dairy. The strategy of partnerships and acquisitions will also be explored when expanding into international markets, Berry said.

On the sales and distribution front, Berry said the company would focus on improving direct reach, and would also look to maintain a balanced distribution spread in urban and rural markets.

Britannia's products, according to industry sources, reach nearly five million outlets in the country, with the company focusing on the north and central Indian markets in recent quarters in its bid to improve reach.

On the manufacturing front, Berry said smart factories and food parks would be the way forward, as it evolves into a total foods company.

"The Ranjangaon food park in Maharashtra, with an investment of Rs 10 billion, is our largest manufacturing investment to date. It will also be our first fully smart factory to ensure efficiency in production, delivery of goods and resource utilisation," he said.

Under Berry, who took over as MD in March 2014, Britannia has grown at a compounded annual growth rate of nearly 10 per cent in terms of topline and 31 per cent in terms of bottomline.

In August, Berry received shareholder approval to continue as MD for another five years (effective April 2019), mandating him to take the company's vision forward.