We are bolstering premium category, eyeing gourmet

Written by Lalitha Srinivasan | Updated: Sep 12 2014, 08:12am hrs
With sales revenue of R6,829 crore in FY14, Britannia Industries (BIL) is planning to invest R200 crore to gain leadership in the branded biscuits segment. The company plans to use this investment to drive innovation, capacity expansion and technology upgrade. As part of BIL's turnaround strategy for all its brands, managing director Varun Berry has made key changes to the company's operations to drive its innovation agenda and quality assurance. Parle currently leads the pack with a 38% market share in the branded biscuits market, followed closely by BIL with 34%. In an exclusive interview with Lalitha Srinivasan, Berry talks about BILs growth plans. Excerpts

BIL embarked on a turnaround strategy after you took charge last year. Whats the latest on it

My first stop was evaluation of manpower. After meeting many managers, I ensured that the right people were in the right positions.

In the second stage, I looked closely at sales and distribution infrastructure and, in consultation with the leadership team, took decisions to introduce initiatives such as the go to market system. We broke down the components of fixed cost and identified opportunities to reduce them to ensure that these were affordable and effective for our moderate margin business. My focus is to bring efficiencies to the back-end and build muscle at the front-end to power the business forward.

BIL is planning to invest R150-200 crore to fight competition in the branded biscuits market. How do you plan to use this investment

Investments will be mainly to drive innovation and capacity expansion. The market needs superior products that delight consumers. We will focus on strengthening the premium category and entering gourmet categories. As part of our turnaround strategy, we have built our R&D team to ensure that we have a pipeline of innovations ready for launch in the coming months.

What are the major innovations being introduced in BILs distribution

system

We are introducing innovations in both our rural and urban distribution network. To start with, we have increased the depth of 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 coverage by our salesmen. Instead of one salesman going to an outlet, we send two salesmen with different sets of stock-keeping units. 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.

What are the expansion plans for the biscuits

business

We are gaining share and aspire to be market leaders soon in this sector. We plan to expand our manufacturing capabilities and build infra for disruptive innovation in the future.

What are your marketing and advertising plans to fight competition

We will continue to focus on our five big brands. We will be rolling out innovative advertising campaigns for them soon. As for celerity endorsements, we will evaluate on a need basis and, wherever required, bring in celebrities to endorse our brands.