Britannia Industries Ltd is planning to expand into product categories which are “adjacent” to its existing offerings in the biscuit-rusk-cake (BCR) and dairy segments.
According to Varun Berry, Managing Director, Britannia Industries, work on new product categories may begin after 18 months.
“We are looking to build bridges between biscuits and other categories surrounding it,” he told
The Wadia Group promoted biscuit-maker will, however, not explore “alien categories”; it will work on “hybrid” variations of its main products, for example, snacks and ready-to-eat foods. He, however, cautioned that plans are still fluid. Berry maintained that the company’s immediate focus is on the BCR segment.
“Right now we have our hands full,” he said.
Focus still on biscuits According to Berry, the company’s “first endeavour” is to be a “more dominant” player in biscuits and to “craft a strategy” for dairy.
“Once we feel we have reached a certain threshold, that’s the time we will evaluate adjacencies,” he added.
Currently, Britannia is the second largest biscuit-maker after Parle and has gained an additional 1.2 per cent of the market last fiscal.
The company plans to occupy the top spot in another three years.
Game for price war Interestingly, 90 per cent of Britannia’s new launches (in biscuits, rusks and cakes) are in the premium segment.
Roughly 80 per cent of its turnover is from these premium offerings while only 20 per cent is from economy products.
Claiming that Britannia won’t back away from a price war to take on regional brands, Berry pointed out the competition has been emerging at the economy end of the spectrum.
According to market sources, small regional players have taken on their bigger counterparts with economy offerings, smaller packs and low-cost alternatives.
“We will not let these players grow beyond a certain size. If it means compromising on our profits and realisable net revenue, we will do that,” he said.
West Bengal is one of the few States where the company has kept its prices lower than in other regions so as to take on competition.
“We will fight quality with quality and price with price,” Berry said, pointing out that the company is also not averse to exploring economy-priced options – such as ₹5-packs – if required. It has done so in case of its “Good Day” brand of biscuits.
Expanding distribution Also on cards is re-working the distribution system in urban areas. The plan is to get more offerings (stock keeping units, or SKUs) into stores, to get more shelf space and thereby improve brand visibility.
Accordingly, the number of salesmen has been increased and each person has been given a smaller portfolio (around 160 of its 320 SKUs) of products so that they can focus more.
“Right now, we have introduced this system in 25 cities and will take it to 50 soon,” he said.
In the rural market, Britannia will focus on expanding to villages with populations of 5,000 people. “We might explore villages with populations of up to 2,000 people sometime in the future,” Berry said.