Bangalore: The past few weeks have been action-filled ones for bakery and dairy company Britannia Industries Ltd. First the Wadias brought out French foods company Groupe Danone’s stake in the company. Britannia then also ended its joint venture with New Zealand-based Fonterra Cooperative Group for the dairy business.
Power brands: Britannia Industries managing director Vinita Bali says the firm holds one-third of the Rs8,500 crore organized biscuit market. Hemant Mishra / Mint
In January 2005, Vinita Bali joined Britannia as chief executive officer; she was named managing director in June 2006. A consumer products industry veteran who had worked for Cadbury and Coca-Cola in several countries, Bali faced huge challenges in restructuring the company in the initial years. Her predecessor Sunil Alagh had left the company on a controversial note, and Britannia was losing share to aggressive new entrants such as ITC Ltd’s food division.
In the past two years, Bali has managed to get Britannia’s numbers back on the growth track. The turnover of the company has doubled in the last four years. In an extensive interview, she spoke on Britannia’s plans. Edited excerpts:
Has the successful resolution of the uncomfortable relationships Britannia had with Groupe Danone and Fonterra set the ground for the next stage of growth for the company ?
Let me clarify.... Danone and Fonterra were very different in terms of what it meant to the business. It is only the media which believed that the relationship was cantankerous on the Danone front. From the operational point of view, there was absolutely no impact due to whatever was happening between the shareholders, and for that I must give credit to the board of Britannia and the shareholders. On the Danone-Wadia (spat), I did not spend even two nanoseconds as it didn’t concern the operations part of the business.
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In the case of Fonterra, it was a joint venture. The decision to buy over Fonterra’s stake was discussed by the Britannia New Zealand Foods Pvt. Ltd board, the joint venture company. It was a good and mutually amicable decision. Remember Fonterra’s core business is not brands, though, like (they do) in Sri Lanka, they may have some brands (in some countries). Fonterra is a cooperative of farmers in New Zealand. They are different from a (traditional) multinational. Whereas Britannia’s business is brands; for Fonterra it was more of milk, milk productivity and expertise, which they sell to other large dairy companies like, say, Nestle, Kraft or Danone. We realized that the way milk is accessed in India is not going to change. So the decision to part ways were driven by strategy and the core competence of the joint venture partners…
Did you separate because the joint venture introduced liquid milk, which didn’t take off and you had to withdraw it from the market?