Britannia to strengthen dairy, snacks portfolios in 20192 min read . Updated: 25 Dec 2018, 03:17 PM IST
Britannia, a maker of biscuits, bread and dairy products, is considering repositioning the brand as a foods company and diversifying its revenue streams
Bengaluru: Britannia Industries Ltd plans to strengthen its dairy and snacks portfolios through new product launches and by ramping up its supply and distribution network. The maker of biscuits, bread and dairy products is considering repositioning the brand as a foods company and diversifying its revenue streams. The 100-year-old company has traditionally earned a majority of its revenue through the sale of biscuits. As part of the recent business strategy, it plans to launch milk-based drinks and yogurts, besides cream wafers and croissants early next year.
In fact, ever since Varun Berry took over as managing director of Britannia in April 2014, the focus has very sharply been on introducing new products and categories. India’s biscuit market is estimated to be worth ₹ 30,000 crore.
But over the long-term, biscuits, as a category, may struggle to expand significantly given the changing consumer preferences. Britannia is therefore looking to diversify its portfolio with dairy, breads, rusks and macro-snacking products.
Dairy alone is a massive market in India with Gujarat Cooperative Milk Marketing Federation Ltd’s (GCMMF) Amul brand leading the pack with revenue of about ₹ 30,000 crore.
Experts say Britannia’s toughest challenge is to get a bigger slice of the dairy pie considering the presence of Amul and a host of other regional brands.
The company’s new dairy head, Venkat Shankar, is in charge of the ambitious plan of making it a ₹ 1,500 crore business over the next five years. While Britannia sells its products under two brands—Britannia and Winkin’ Cow (for milkshakes)—the plan is to “resolve a brand architecture" for its dairy business by the end of the current financial year.
“The way we see this business is not to play in the turf where others are strong, which is largely around liquid milk, but in the value-added segment only, and there we feel the game is wide open," said Shankar. Besides, snacking is also a significant market, dominated by unorganized mom-and-pop stores and bakeries. Britannia’s Jayant Kapre, who heads its breads, rusks, cakes and related business verticals, estimates the snacking market to be worth ₹ 1 trillion. Of that, salty snacks account for ₹ 24,000 crore, he added.
However, Britannia typically prefers sweet over savoury. For instance, it launched cream wafers two weeks ago.
“We’ve had snacks in the other space in the past and I have to say upfront that it’s a very difficult and complicated space to be in. We’ve done salty snacks a few years ago. We’ve seen other players come in and go out. So we want to decide whether we can make a meaningful play and do it well or else not do it at all," said Kapre.