 "Britannia Industries is three months away from a decision on dairy: Varun Berry")
Managing director of Britannia Industries, Varun Berry, tells Viveat Susan Pinto where the company now stands in the pecking order of biscuit makers and why there is a delay in ramping up its dairy business, which gives the firm barely five per cent of its revenues currently. Excerpts:
You've been speaking of ramping up your dairy business for a while now. Why the delay?
We are still doing our due-diligence. We want everything to be tied up before we take a decision on it.
Britannia is the leader in cookies. But what is your position in creams, where you've been considered laggards?
We are now leading ITC in creams, but by a small margin. Our plan would be to expand this lead. I have not been terribly happy with where we've been going with creams. We lost considerable share in creams, though we did bounce back in the past two years. But it is not enough, given that the competition is stiff. Hopefully, we should come up with some aggressive strategies on creams to grow share. While I am not at liberty to give market share numbers, broadly cookies for us is more than two times that of creams in terms of share. This ratio needs to improve if we have to widen our lead in the segment.
From a two-way fight, organised biscuits is now a three-way fight. Holding share in a market like this is tougher. Your views.
The landscape is tougher. There is no denying that. But the challenge would be to monitor consumer trends and quickly respond to them. Consumers today are very different from what they were two decades ago.
They want to flirt with products, try out new things. They like or dislike things very easily.
Understanding all of this is critical and ensuring that your organisation has the bandwidth to respond to this quickly will be the challenge.
You have been investing significantly in improving manufacturing capacity. Will that mean that your dependence on third-party manufacturers will come down?
Our plan is to have about a third of our manufacturing outsourced and two-thirds to be done in-house. This way we have greater control on quality and production.
We have been moving in this direction over the years. From around 45-50 per cent a few years ago, we will touch 65 per cent in terms of in-house manufacturing capacity in the next financial year.
In terms of number of company-owned plants, the figure will work out to about 15 from 7 earlier. That is a significant increase in three years.
How does the rural and agri push help Britannia?
It will help us enormously. Our rural revenues are around 35 per cent now from around 25 per cent earlier. That pie has been growing for us and while the benefits from the government's rural and agri push will not kick in, it will in a few quarters from now.
You've been speaking of ramping up your dairy business for a while now. Why the delay?
We are still doing our due-diligence. We want everything to be tied up before we take a decision on it.
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Dairy will require big investment; almost Rs 300 crore. We have to look at all aspects before we make any commitments. We are three months away from making that decision.
Britannia is the leader in cookies. But what is your position in creams, where you've been considered laggards?
We are now leading ITC in creams, but by a small margin. Our plan would be to expand this lead. I have not been terribly happy with where we've been going with creams. We lost considerable share in creams, though we did bounce back in the past two years. But it is not enough, given that the competition is stiff. Hopefully, we should come up with some aggressive strategies on creams to grow share. While I am not at liberty to give market share numbers, broadly cookies for us is more than two times that of creams in terms of share. This ratio needs to improve if we have to widen our lead in the segment.
From a two-way fight, organised biscuits is now a three-way fight. Holding share in a market like this is tougher. Your views.
The landscape is tougher. There is no denying that. But the challenge would be to monitor consumer trends and quickly respond to them. Consumers today are very different from what they were two decades ago.
They want to flirt with products, try out new things. They like or dislike things very easily.
Understanding all of this is critical and ensuring that your organisation has the bandwidth to respond to this quickly will be the challenge.
You have been investing significantly in improving manufacturing capacity. Will that mean that your dependence on third-party manufacturers will come down?
Our plan is to have about a third of our manufacturing outsourced and two-thirds to be done in-house. This way we have greater control on quality and production.
We have been moving in this direction over the years. From around 45-50 per cent a few years ago, we will touch 65 per cent in terms of in-house manufacturing capacity in the next financial year.
In terms of number of company-owned plants, the figure will work out to about 15 from 7 earlier. That is a significant increase in three years.
How does the rural and agri push help Britannia?
It will help us enormously. Our rural revenues are around 35 per cent now from around 25 per cent earlier. That pie has been growing for us and while the benefits from the government's rural and agri push will not kick in, it will in a few quarters from now.