With innovation at its core, Britannia has launched several products (Wonderfulls, Oats NutriChoice, etc) over the last six-eight months. Apart from biscuits, it has even ventured into regional products after
innovating in the snacks category. One of the oldest food companies in the country, its strategic expansion plan is based on the principle of ‘one new market a year’. In a freewheeling interaction, Ali Harris Shere of Britannia Industries discusses how the company is growing post GST, its plans for new media and more with BrandWagon’s Meghna Sharma. Edited excerpts:
Over the years, what changes have you witnessed in consumer behaviour, considering people are becoming more health conscious about snacks?
While convenience has emerged as a trend, other trends include on-the-go consumption, eating out, healthy food and want for exotic/premium food as people are well-travelled today. Though consumers want to lead a healthier lifestyle, the adoption of the health category has been slow. There are health believers, health activists and health beginners. Believers and activists are the ones who have actually adopted a healthy lifestyle and opt for healthier food, exercise, etc, whereas for beginners — the highest lot — the retention rate is low.
We have a health segment wherein we have different products. Building taste and benefits together, as well as accessibility of healthy products at lower price points are efforts from our end to enlarge this franchise.
Out of Britannia’s vast portfolio, which brands are doing well? Also, have you witnessed any geographical or demographical shift in the demand and consumption of your products?
We have seven power brands — Good Day, Marie Gold, 50:50, NutriChoice, Treat, Milk Bikis and Tiger. We have seen a very good growth in our flagship brands which are Good Day and Marie Gold. The biscuit market is totally divided into premium products and (low-priced) value products. Our two flagship brands are growing faster than others because people are upgrading from their current choice into more premium products. We have launched these premium biscuits at a lower price; now, one can have a Marie for Rs 5. As for our other products, Milk Bikis and Bourbon continue to do well.
As for the market, UP, Rajasthan and MP are large value markets. These are the markets where you sell a lot of low priced biscuits. Even these markets are upgrading from value to premium brands. But we are stronger in Maharashtra, southern states, West Bengal and Odisha because inherently, we are not a large value player. However, there has been a very conscious effort in the last two-three years to change Britannia’s market share in HSMs (Hindi-speaking markets).
With Diwali behind us, how is the festive season faring this year, especially for the premium biscuit category?
We are not a very large category to be sold during festive season. People have moved from traditional sweets to chocolates and dry fruits, etc. But like other brands, we too have brands like Britannia Shubhkamnayein that do decently well during the gifting season. But our regular sales don’t get impacted.
For Britannia, packaging means a lot. Over the years, what alterations has the brand made to catch a consumer’s attention in an aisle?
There are two things when it comes to packaging. One is the packaging design which is the aesthetic of the pack and the second is the format of the packaging where you concentrate on the structure of packaging. We have come a long way when it comes to the visual design of packaging as we work with some of the best packaging companies in the world. If you look at our Wonderfulls packaging, it is cutting-edge and world-class. Unfortunately, on the format front, we have not been able to innovate much because these are very price-sensitive products. Consumers do not want to pay extra for packaging.
Many staple companies were affected by the implementation of GST. How far were you impacted and how long would it take to come back to normal?
GST was a very bold move by the government. We did see some minor disruptions but they were expected. But we have gotten back to normal sooner than expected. The difference between GST and demonetisation is that during demonetisation, a consumer’s consumption power got affected. As for GST, there was no impact on the consumer, only on trade. If one managed the trade well through digitisation and attractive value packages, GST would not have made major dents in their business.
For FMCG firms, about 35% of the distribution currently comes from wholesale channels. But is the company looking at decreasing dependence on wholesale trade as a medium of distribution post GST?
We believe that direct distribution is far superior to wholesale trade because it is similar to a situation where a customer goes to a retail store and picks up what she wants from the lot. When we go to an outlet, we get an opportunity to sell our entire portfolio; and we have been working on this strategy — go direct — from the last three years to maximise our presence in every outlet. In that direction, we have done something like RTM (roots to market) where earlier, one salesman used to visit 140 towns (where we are present), but now we have two people going and booking orders for us. This has let every salesman give more focus to their respective sales area. Having said that, I want to make it clear that this has nothing to do with GST. In fact, this strategy helped us when GST was imposed.
For Good Day, Britannia launched its first-ever digital film. Why so late in the day to go digital? Which is the lead medium of communication for you?
The lead medium is and will always remain television because as a category, we need to reach a large number of consumers. Of the total media spends, 75-80% of the ad spends go to TV and the rest get divided between other mediums.
Digital is growing and we give it due importance. We do participate in digital but do not want to be there for the sake of being there. We want to put together a strategy wherein we want to talk about what Britannia stands for on digital. We have relevant tasks for each of our brands and want to convey these through digital films; which is a longer, more detailed format. For example, the Good Day film was based around the story of a guard and I do not think the concept would have worked well on television.
As for the budgets, we follow the A:S (advertising to sales) ratio. Therefore, as the market share increases, ad budgets increase too. The challenge here is that media is getting fragmented and one needs to understand what is working best. Every year, we see a 10-12% increase in our media budgets.
Meghna.Sharma@expressindia.com
@meghna0101
