Biscuit major Britannia Industries expects the second half of the ongoing financial year (FY26) to deliver stronger volume growth on the back of the GST rate rationalisation in food and beverages, Varun Berry, executive vice-chairman, MD & CEO, said during an earnings’ call on Friday. From 12-18% GST earlier, most food and beverage products including biscuits have moved to the 5% tax bracket. Britannia has responded to the change with a 10-13% grammage increase in low-unit packs including Rs 5 and Rs 10 packs and price drops on larger packs. The company will also enter the ready-to-drink (RTD) protein beverage market, a space that has seen the entry of companies such as Amul in recent quarters.
“65% of our portfolio consists of Rs 5 and Rs 10 packs, where grammage increase has been done. 35% of the portfolio will see price drops as pack sizes are larger. By the middle of November, all of this will be in place and in stores. We will see a positive impact of this on volume growth. Q2 was a lull before the storm, the second half will be better,” Berry said.
From low single-digit to flat volume growth seen in the first half of FY26, Britannia expects this number to increase to high single-digits and potentially double-digits in the second half, driven by the shift from unorganised to organised consumption, GST-led pricing and grammage interventions and local launches.
Berry says that with commodity prices stable for now, the focus for the company will be on “aggressive topline and volume-led growth” in the second half of the year. The company will also double-down on brand investment, restage products and increase media spends, as benign commodity prices give the company room to invest savings made on gross margins, he said.
“There is a very positive sentiment around consumer goods and especially foods. So, I do think this is our moment and it will definitely bring us the kind of growth that we’ve been missing for some time,” Berry said in response to investor queries on the company’s growth strategy.
Britannia is also expected to pursue an aggressive regionalisation strategy to tackle local competition including introducing new products such as zeera (cumin) biscuits in the east or relaunching its Tiger biscuit portfolio with new flavours to make it exciting for consumers in small towns and rural areas as well as increasing direct distribution into rural areas. Berry also said that the company is consolidating its adjacencies and aiming to scale categories such as rusk, cakes, croissants, dairy, and biscuits in the future.
“As far as Tiger was concerned, we were a me-too product,” Berry said. “It was important for the brand to stand out and give the consumer a reason to buy it. We thought through it and have come up with a proposition that will help establish it in smaller towns and rural areas,” he added.