Bengaluru: Biscuit maker Britannia Industries Ltd will focus heavily on product innovation in the current fiscal year (FY18)—a journey the company began in earnest when current managing director Varun Berry took the reins in April 2014.

In its latest annual report, the Bengaluru-based company also said consumer-facing businesses have been inching back to normalcy from the impact of the 8 November invalidation of high-value banknotes, but still have some way to go. 

A full recovery and a restoration of the growth rate to prior levels may start in the second part of FY18, it added in the report filed with BSE late on Thursday.

Over the past five years, the company’s sales have grown at a compound annual growth rate (CAGR) of 11%. Net profit, using the same measure, has grown at a CAGR of 38%. 

Britannia’s strategy for FY18 includes developing products based on new technologies, focusing on health and wellness offerings, and entering into adjacent food categories. All of this builds into its aim of transforming itself from a biscuit maker to a total foods company. 

Its research and development (R&D) team is developing disruptive new products which will be launched in the coming years, it said. These are likely to be in its three core categories—biscuits, rusks and cakes. The R&D team is looking to partner with academia, other businesses and scientific institutions to further its innovation strategy, said the report.

“Since Berry took over, Britannia has done well in terms of developing new products," said Harminder Sahni, founder and managing director at consulting firm Wazir Advisors.

He added: “Another company that is also doing tremendous amount of work in this aspect is ITC. Britannia is keeping pace with ITC even though its resources are more limited in comparison."

The company launched a slew of products in FY17, including two variants under its Good Day (3 Nuts and choco chip cookies) and NutriChoice brands (Digestive Zero and Oats cookies), and a new product under its 50-50 brand called Mathri Masti. These products are doing well in the market and Britannia will continue to invest in their growth, it said in the report. 

However in value-added dairy products, which the company considers its single largest opportunity for expansion, intense competition and the availability of good quality milk are big challenges. Britannia is working actively to come up with strategies to deal with these, it said. 

In order to ensure its existing and new products reach as many customers as possible, Britannia has added 290,000 retail outlets to its direct reach network in FY17. The company also created eight new manufacturing lines and is in the process of setting up a new plant in Assam, with two more in the pipeline for FY18. Britannia set up a manufacturing plant in Nepal too in FY17 and continues to look for such opportunities. 

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