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Business News/ Companies / People/  Varun Berry | My priority at Britannia is product innovation
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Varun Berry | My priority at Britannia is product innovation

Britannia CEO Varun Berry speaks about the changes he's made and his rapport with chairman Nusli Wadia

Varun Berry says Britannia’s sales mantra has been: depth in the urban market (more brands, more pack sizes in existing outlets) and width in the rural market (reaching more outlets). Premium
Varun Berry says Britannia’s sales mantra has been: depth in the urban market (more brands, more pack sizes in existing outlets) and width in the rural market (reaching more outlets).

Bangalore: Britannia Industries Ltd appointed Varun Berry as chief executive officer (CEO) in March. Berry, a former Pepsico Inc. executive, had been running the biscuit maker for 10 months before that as the head of the company’s India business, which generates more than 90% of sales. In an interview, Berry spoke about the changes he’s made at Britannia, his priorities going forward and his rapport with chairman and promoter Nusli Wadia. Edited excerpts:

For Britannia the priorities were increasing market share that the company had lost to Parle and others, as well as improving margins. How has the company fared on these metrics over the past year?

I can’t share exact market share numbers, but we absolutely gained share and grew faster than the market last year. We’ve grown revenues, share and margins in the last year. These gains have come from improving the fundamentals in every area, whether it is about building better sales and distribution systems that are more efficient, creating a more aggressive, competitive mindset among employees, or at the back-end where we’ve improved our understanding of how much product is required at the front-end.

Britannia hasn’t come up with a so-called market-changing product for years. Do you have anything in the pipeline?

Now, my priority is the one where Britannia has been written off or criticized: product innovation. We haven’t done enough. While the fundamentals are in place and will be stronger, now is the time when we really need to look at consumers, see what they require and take them up the value chain by providing some disruptive products with disruptive packaging. Every type of innovation is something I’m going to look at closely this year.

Retailers say your sales and distribution has improved. What changes have you made there?

We changed the organization structure. We got the right authority and responsibility with the people. We gave them very clear KPIs (key performance indicators) and got to a very strong KPI-based culture where KPIs were discussed and tracked every month. We also got a system of getting senior people to spend more time in the market—going with the salesmen, helping the salesmen sell more rather than just sitting in the office.

Everyone in the company is now more competitive. The coordination between teams has improved. My mantra is: every team has to help the salesman sell that 1 kilo extra. No outlet in the country that sells biscuits would reject a Britannia biscuit. It’s our inability to reach that outlet that pulls us back. Our sales mantra has been: depth in the urban market (more brands, more pack sizes in existing outlets) and width in the rural market (reaching more outlets). If we get to the market the outlet will buy.

Britannia saw an exodus of senior employees last year. Are you struggling to check attrition? What are you doing to keep it under check?

Attrition rate is still high; it’s in the mid-teens. But last year, attrition rates were high for most companies. Whenever there are tough times, people start to get frustrated and circulate their CVs. We are trying though. We’ve promoted many people to senior roles. When people have left, we’ve replaced them with people from within. Most of my senior management team are Britannians. Only one or two are from outside. Hopefully all this will help bring us down the attrition rate. But it’s difficult and even if we can bring down the rate to 10%, I’ll be happy.

Have you cut brands or stock keeping units (SKUs)?

We’ve cut our SKUs significantly. We’ve reduced 60 SKUs on biscuits and almost 40 SKUs on dairy. So we cut 100 SKUs. Overall we now have 155-160 SKUs in biscuits and 60 in dairy. There were more than 300 earlier. We took a call on cutting SKUs based on how much revenues and profit they were bringing in, what the trend of the SKU was, whether it was going down or up, and also on the strength of the franchise. It was very difficult though. There was a lot of pain involved. But consolidation is the name of the game whether it’s SKUs, plants or brands. We don’t want to proliferate everywhere. We’ve got to make the business compact.

Analysts criticize Britannia for not making the most of the potential of its dairy business. What’s your plan there and how important is that business for you?

In dairy, it’s business as usual. We’re looking at double-digit growth and increasing profitability. But that is not the strategic view. We’re in the process of developing a strategic plan on dairy that can give us exponential growth. I’m personally involved in making sure we get that strategic plan going. We definitely believe in dairy being a big growth avenue in the future. We just have to define how we’re going to get there. This is a long-term plan. It’ll start taking roots after the next six months and then take us another three years.

There’s a perception that chairman and promoter Nusli Wadia is heavily involved in running Britannia. What’s your equation with him?

For me, it has been a delight. He and the (Wadia) Group are giving me tremendous support and tremendous independence. The decision-making process is much faster than MNCs where I’ve worked before Britannia. In MNCs, decision-making would go through multiple layers. From a country it would go to a region, to a sector, to a support centre, and to a CEO. Here it’s between me and the chairman. If I’ve got solid logic, a strong argument, I’ve noticed that it doesn’t take too much time to take decisions.

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Published: 02 Jun 2014, 02:15 PM IST
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