Product diversification centre stage at Britannia Industries

Says it's aiming to become 'complete food' company

TThree and a half years since taking over as Britannia Industries’ managing director, Varun Berry is putting the third leg of his master plan in place to transform the Wadia Group company into a well-rounded food major.

The initial years of his tenure (Berry, now 55, joined Britannia in early 2013 as operations head, subsequently becoming MD) were spent ramping up distribution and manufacturing. The third leg will now see the biscuit major step into areas such as croissants, snacks and beverages.

“We want to become a total food company,” Berry told Business Standard. “Our plan is to get into a new category every year. Five years from now, we intend to play in a lot of more categories than we now do.”

The diversification comes when rivals Patanjali, ITC and Parle are rapidly expanding into new areas. At the recent World Food India 2017, Patanjali, ITC and Britannia committed a total of Rs 32,500 crore over the next few years in food processing investments, a substantial chunk of the Rs 68,000 crore in commitments given to the government at the event.

Britannia’s investment of Rs 1,500 crore involves setting up an integrated food park at Ranjangaon, Maharashtra, for manufacture of biscuits, cakes, rusks and croissants, Berry said. It also plans to set up units at Guwahati, Assam and Gujarat, he added, for new product lines.
 

The diversification exercise will also see the company strengthening its presence in existing categories, especially dairy. “We derive about five per cent of our revenue from dairy,” Berry said. “The objective would be to grow this segment into a much bigger one. Cheese will be the main foundation of what we do in dairy to begin with.”

The plan here, he said, involved adding new cheese formats to its existing portfolio -- spreads, slices, cubes, blocks and cream cheese. For this, Britannia could partner with companies abroad, to bring those products into its portfolio in the coming months. The company will also improve its presence in dairy whiteners and UHT (tetrapak) milk, categories where it is a small player at the moment.

Phase-II of expansion in this segment will see Britannia step into dairy-based beverages and snacks, Berry says, which could come in the next couple of years.

In biscuits, Britannia will continue to premiumise the portfolio, said the MD, having recently added two new products, in cookies and cream biscuits. The company gets 75 per cent of its revenue from biscuits, the balance coming from bread, cakes and rusks, beside dairy.