The maker of Marie Gold and Good Day biscuit brands has enlisted global consulting firm Bain & Co. to prepare an aggressive ‘go-to-market’ project” by leveraging data-driven strategies, Berry told ET.
The Nusli Wadia-owned company is looking to map its target market segments closely for mounting an effective challenge to existing players in the new categories. It will also hire talent to build the sales team, Berry said.
“While our current focus is to pause and consolidate, we remain vigilant for opportunities to fuel portfolio growth,” said Berry, credited with Britannia’s transformation from a biscuit-centric entity to one with a broader product range. He assumed the role of vice chairman in 2022, after Rajneet Kohli of Domino’s Restaurants was appointed as CEO.
“Chocolates is a big market but difficult to penetrate and therefore it will only be through a JV if and when it is possible,” he said. “We are present in multiple categories and want to get them larger before going to others. The go-to-market strategy with the help of Bain will help identify blank spaces more precisely to ensure improved distribution of its products across markets,” he added.
Meanwhile, dismissing market rumours of a stake sale in Britannia to large players or private equity firms, Berry said, “There is no truth to this and absolutely no chance of that happening.”Despite ambitions to become a comprehensive food company, Britannia’s immediate priorities involve scaling up existing categories such as biscuits, cakes, rusks, croissants, energy bars, protein bars, cheese, milkshakes, and yogurt.”Pause and consolidate is all about ensuring better focus. We are currently going to do that better with scale; about scaling up, for example, cheese is now a Rs 100 crore business,” he said.
Britannia’s top biscuit brands include Marie Gold, Tiger, NutriChoice, Good Day, 50-50, Treat, Pure Magic, Milk Bikis, Bourbon, Nice Time and Little Hearts. The company has a JV with French Cheese Maker Bel Group’ and a JV with Greek firm Chipita SA for producing and selling ready-to-eat croissants in India.
“Our focus is to grow topline aggressively as input prices have stabilised, and scale up adjacent businesses such as cheese, croissants and rusks,” said Berry.
His comments track the company’s tepid earnings in the December quarter. Revenue grew a modest 2% from a year earlier during the quarter to Rs 4192 crore, while net profit fell 40% to Rs 555 crore on a high base. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin remained steady over 19%.
“Profit fell because of a one time gains of the company’s dairy JV stake sale last year, otherwise it is a double digit gain on operating profits” Berry said.
For the nine months ended December, revenues grew 3.6% to Rs 12,532 crore and net profit fell 9% to Rs 1598 crore.
For FMCG companies, it is a double whammy. While inflationary concerns are weighing on private consumption, competitive intensity has increased due to regional players, direct-to-consumer (DTC) startups and large, listed peers. Regional players tend to sell at lower price points and pay more margin to wholesalers and retailers.
To beat competition, Britannia is introducing new products such as energy and protein bars under the brand Be You, makhanas and differentiated cheese formats.
Unlike the domestic market, Brittania has posted double-digit revenues growth in international markets in the quarter to December. It is also strengthening its rural distribution, expanding direct reach and its growth in its focus states is 2.4 times faster than in other states.
