New Delhi: Biscuit major Britannia Industries Ltd will wait for a few months before it launches some of its new products such as croissants and salty snacks as the maker of Good Day and Tiger biscuits awaits revival in consumer demand. The new products are in the trial phase.
In a call on Monday, the company's managing director Varun Berry told analysts that for some of its projects such as croissants and salty salts “We haven’t moved beyond that (test market) because these are not the times to probably take these projects nationally".
Berry added that the company is “trying to fine tune those". He, however, indicated that the company could scale up some of these innovations over the next three-to-six months.
Consumption slowdown in India has prompted companies to take a measured approach when it comes to new launches, promotions, and marketing costs as shoppers go easy on discretionary spending.
“We've also prioritised some of the future innovation projects because in times like this when (the) economy is a little slow, consumers tend to go back to their favourite brands, that gives them more comfort, and are not as experimentative as they would be in good times," Berry said.
For the December quarter, Britannia posted a 5% rise in total revenue from operations to ₹2,982.68 crores, up from ₹2,842.44 crore reported in the year-ago period, the company said in its earnings last week. It reported a 23.26% jump in consolidated net profit to ₹369.88 crore as it improved its reach and distribution to parts of the country.
Berry said demand has taken a hit predominantly in rural parts, which is growing much slower than last year. “It is not that the slowdown is not hitting the large cities and the urban area, it is. But the largest slowdown is in rural areas. While we have grown share very aggressively in rural areas because of our programs but growths have not been comparable to what they used to be three-to-four quarters back," he added.
Britannia has been on an innovation spree over the last few years as it moves towards becoming a total foods company--expanding its sales from and bakery to other packaged snacks.
India’s fast moving consumer goods (FMCG) makers have been feeling the pain of slower growth rates. The FMCG market grew at 9.7% in 2019, market research company Nielsen said in a report in January.
The slowdown was more pronounced in India’s villages where growth rates dropped sharply for goods of daily use items such as soaps and packaged foods, among others.