Britannia looks at JVs to milk dairy business

Jun 08 2014, 01:17 IST
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SummaryBritannia Industries is looking at joint ventures and strategic alliances with domestic and international companies to boost its dairy business

Britannia Industries is looking at joint ventures and strategic alliances with domestic and international companies to boost its dairy business which contributed only 5% of the company’s overall revenues. After the implementation of the strategic growth plans for the dairy business, it will also look for JVs with international players and original equipment manufacturers to process its dairy products better.

Varun Berry, CEO of Britannia which registered sales of R6,829 crore for FY14, said: “The business is doing alright but it’s growing incrementally on a small base. If we want exponential growth, we will have to recraft the strategy and that’s what we are in the process of doing”. Betting big on innovations, it plans to increase investments in R&D for its entire business by 25 % in FY15.

“R&D will be a big driver of growth. We are looking at innovations in terms of people and equipment and studying different products in different formats within the biscuit category,” said Berry.

To fight competition in the R23,000-crore branded biscuit category, BIL is sharpening its focus on the top end. Britannia, which faces stiff competition from ITC, Parle Products and Mondelez in the premium biscuit category, plans to launch more premium biscuit brands this year.

The company is introducing ‘innovations’ in its distribution system in the urban and rural markets. To start with, it has increased the depth of its distribution in urban markets. “We have cut the number of our stock-keeping units to reduce the workload of our salesmen. We have also split the coverage by our salesmen. Instead of one salesman going to an outlet, we send two salesmen with different sets of stock-keeping units,’’ explained Berry. In rural markets, it is focusing on the width of its distribution by running a ‘hub & spoke’ model. “We are increasing our rural distribution by 12% in 2014-15,” said Berry.

Last year, Britannia witnessed the exit of many senior professionals. '' When times are tough, attrition levels rise. We have taken measures to retain employees, including giving staff the right opportunities and communicating regularly with them, ” added Berry.

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