Britannia has risen from a Rs 295 start-up to a Rs 4,000-cr leader
K.R. Balasubramanyam June 23, 2011During World War II, the government of British India needed a supply of specially made biscuits for its soldiers. The Britannia Biscuit Company rose to the challenge. The deal ran into several years, and the company sometimes devoted 95 per cent of its capacity to produce biscuits for the armed forces.
Today, the biscuit maker, rechristened Britannia Industries in 1979, partners with the United Nations World Food Programme, supplying biscuits worldwide, especially during emergencies. Many are customised to fulfil specific nutrient requirements.
Britannia, today a leading player in the Rs 12,400-crore biscuits market, started out in 1892 as a tiny operation in a modest house in Calcutta (now Kolkata), with an initial investment of Rs 295. Five years later, it was acquired by two brothers about whom little information is available besides their name: Gupta. The Guptas moved operations to Dum Dum, continuing them under the name V.S. Brothers. The company was incorporated as the Britannia Biscuit Company in 1918, after English businessman C.H. Holmes teamed up with the Guptas. It became the first biscuit maker in India to mechanise production, and the first one east of the Suez Canal to use gas ovens, which it imported in 1921.
In 1924, Britannia became a subsidiary of Peek, Frean & Co., a leading British biscuit maker. It was a public issue in 1978 that firmly established the company as Indian, as its Indian shareholding crossed 60 per cent.
The company went through its most acrimonious phase in the mid-1990s. A saga with many twists played out, ending with Nusli Wadia, owner of the Bombay Dyeing empire, teaming up with French food giant Danone, to wrest control from the Britannia chairman, the late Rajan Pillai. The relationship between Wadia and Danone remained uneasy. For instance, the Wadia Group claimed in 2007 that Danone had registered the Tiger brand in other countries without its consent.
Wadia also stalled Danone's attempt to set up an independent business venture in India. The French company exited two years ago, after selling its holding to Wadia. Britannia, whose product range spans biscuits, bread, dairy, cakes, and cereals, earned revenues of Rs 4,213 crore and a profit of Rs 145 crore in the last financial year.
Managing director Vinita Bali told analysts in February that "the opportunity is large, and Britannia is well-positioned to exploit it''.