The domestic fast-moving consumer goods (FMCG) market will see a gradual recovery in FY26, with the year being a test of both revenue and volume growth, Varun Berry, executive vice-chairman and MD, Britannia Industries said on Monday during a post-results analysts’ call. The company, which reported a 9% and 4% year-on-year increase in Q4FY25 revenue and net profit, respectively, would continue to lean on cost savings, which had delivered nine times return on the base year of FY14. Quick commerce, among the fastest growing channels for the company, is also expected to double the share to 8% from 4% now in the next three years.
Describing the demand revival as a steady journey up, unlike that of a sharp “hockey stick”, Berry also cautioned about commodity inflation that could rear its head if weather was erratic. The Met department has projected an early onset of monsoons this year, with some parts of the country already seeing unseasonal rains in April and May. Berry also said that the company would appoint a new CEO in the next 3-4 months as part of succession planning. Last week, Berry was appointed as CEO of Britannia in addition to being vice-chairman and MD. This came following the exit of Rajneet Kohli in March. Kohli joined HUL as executive director, foods, in April.
“The position of the CEO has to be filled. It is a statutory requirement. Succession planning is under process. And it will be clear to you in 3-4 months with regard to the new appointment,” Berry said in response to an investor query on the subject.
Berry’s comments about the broader FMCG market also comes at a time when food companies in general remain watchful of inflationary pressures, notably, in tea, coffee, wheat, sugar, cocoa, milk and palm oil. Firms such as Tata Consumer, Hindustan Unilever (HUL) and Nestle India have all said that they will need to read the fine print on food inflation before halting price hikes for now.
Britannia, for instance, undertook price hikes of about 5-6% in the last few months to tide over inflationary pressures in key inputs such as wheat, where prices have been higher versus the previous year despite a higher yield. Berry pointed to a 7% higher minimum support price offered by the government for wheat prices inching up. Other inputs such as cocoa, palm oil and milk had surged 83%, 54% and 21% each versus the previous year.
“We are hoping that we will be able to grow revenue and volumes. Obviously, there will be a delta because we have taken a pretty high price increase in the last quarter and we will be necessitated to take slightly more price increases to make sure that we deal with the inflation which comes in to protect margins. Having said that, we are hoping to see healthy growth, both volume and revenue,” he said.
The company was also cautious about potential price cuts from smaller rivals, Berry said, and would continue to look at adjacencies beyond biscuits to drive growth. Categories such as cakes, croissants, milkshakes and cheese emerged as growth drivers, with most crossing Rs 200 crore in revenue. The relaunch of cheese led to over 40% growth in traditional trade, Berry said.
Britannia, which reaches 6.5 million outlets in total, out of an overall outlet base of 9 million in biscuits, would continue to expand direct distribution, the company said. Direct distribution now accounted for half (3 million) of Britannia’s total outlet reach (of 6.5 million), the company said.
The company is also working on improving both depth and width of outlet coverage in rural areas, Berry said, to drive more volume sales per store. Like most FMCG companies, Britannia derives a third of its sales from rural areas and two-third from urban areas.