Varun Berry, the tall and lanky MD, of the 100-year-old biscuit manufacturer, has tall ambitions - to make Britannia a complete foods company by 2020. He says 2018 was a year of innovations.
The biscuit manufacturer launched a host of new products such as milkshakes, chocolate-filled cakes and wafer biscuits, all of which, claims Berry, have done well in the market. "We really heightened our innovations last year. What we have launched till now is not even half of what we are going to do. As we sit here, the next few months will be the result of all that we have done in the past six-eight months."
According to a report by Edelweiss, innovations account for around 5 per cent of Britannia's revenue, and the ambition is to scale it up to 8-10 per cent in the next few years. Berry is excited about his company's upcoming launch of long-shelf life baked croissants for which it entered into a joint venture with a Greek company, Chipita SA. "We have got some really exciting products coming up in cakes too. We have got some completely new-to-market products where we were not present but smaller players were there." Getting into these newer categories will mean that Britannia will no longer be a biscuit-only company (80 per cent volume growth comes from biscuits). The company has invested Rs 1,500 crore towards its innovation strategy.
Berry's approach to business is contrary to his predecessor, Vinita Bali, whose focus was on health and nutrition. "At one end you have consumers who have disposable income, who are looking for healthier options, and on the other end you have people for whom bhukh-pyaas is important, and for whom taste is important too... The larger population will look at products that fill their stomach and are tasty."
Berry's focus on taste has worked. In the past six years, the company has been registering an impressive revenue growth of 15 per cent a year. Profits have grown by close to 40 per cent a year in the last few years. The stock price of the Rs 9,829 crore-company surged by 70 per cent last year.
More to the Pie
The soon-to-be total foods company is testing global waters as well. While Britannia exports to West Asia and also to the US and the UK, its first global manufacturing facility will come up in adjoining Nepal. "We will start selling products in Nepal that are made in Nepal. We have also started to seed markets such as Myanmar and Egypt where we are exporting products from the Middle East," says Berry. The company is also planning to set up its own operations in Nigeria.
Another focus point is dairy. Berry has for long wanted to take the company's Rs 400 crore-dairy business back to the drawing board. The company has been running its dairy products business through contract manufacturers, but recently set up a procurement network in Maharashtra, from where it collects 30,000 litres of milk per day. They started small. "We still haven't broken ground as far as the factory is concerned. We are evaluating the equipment and all of that," says Berry.
Dairy is a long gestation business and it will be a while before the company gets to a reasonable scale in procurement. Meanwhile, it plans to strengthen its cheese and milkshake portfolios, and has exited commodity categories such as ghee. It's also strengthening dairy distribution and keeping prices competitive. Berry says the dairy business still has a lot of ground to cover, but this is the most exciting stage.
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