Britannia looks to capture Indian rural markets

Britannia is planning to relaunch its biscuit packs as part of its renewed branding.

Hyderabad: Britannia Industries, which is witnessing its rural markets contributing to about 20-22 per cent of overall sales, is eyeing to capture a bigger pie in these markets. Though it will not reduce efforts to expand presence in urban markets, it is drawing a strategy to explore larger opportunity to cater to reach out to its rural customers.

To woo the customers in rural India, the company is also creating price points that are lower to meet the expectations of the rural markets. Products had been designed and developed to be offered at even Rs 5 and Rs 10 range. The company which wants to make its cost leadership an entry barrier for its competitors will also use last-mover strategy in some segments to understand what happens to the competitors’ products.

The Rs 10,000 crore (turnover) company today sells one billion packs to 77 million households through its five million retail outlets, across its markets. Bulk of the company’s raw materials is sourced from within India, while it imports cocoa and cashew.

Britannia Industries vice president Sales, Gunjan Shah, told Telangana Today, “We were underpenetrated in the rural parts of the country. We wanted to focus in these markets through our direct reach strategy. In the last three years, we have achieved double digit growth in rural markets. We have always focused on the freshness of the products. Our company has used technology to strength our sales and distribution. We have enhanced workforce in the rural markets with about 16,000 personnel while deputing 7,000 sales professionals in the urban markets.”

He added, “Almost 90 per cent of our sales force is enabled with technology devices/smartphones with an app that gives them outlet, market and consumer profile insights. With the internet penetration improving in rural India, the company is able to getter better insights from the region. To make the system foolproof, offline platforms had been created for the company’s salesmen. We are using geospatial technology, artificial intelligence and analytics that help us get appropriate data insights leading to meaningful market analytics. We have expanded our horizon and went few steps forward to pool data from other sources that are relevant to markets. For instance-how certain government implemented infrastructure projects will improve connectivity to our target markets.”

Britannia, which has been focusing on achieving direct reach to its markets, has been able to sell products faster across segments. It has also strengthened its presence in Gujarat, UP, Rajasthan, MP and Uttaranchal in the last few years. The company which has been primarily focusing on east sees north and south markets equally attractive.

Product portfolio
Britannia which sells 80,000 tonnes of biscuits every month operates 80 units keeps adding five biscuit lines every year, which are both greenfield and brownfield.

The company, which spends about Rs 300 crore on R&D, is planning to enter into larger product categories such as snacks and eventually want to become total food company in the coming years. Britannia will come with a series of new products during the current fiscal. The company will focus on cake, rusk and bread segments. New formats and variants in cakes will evolve. Innovation will happen in the bakery snacks segment. The company which has presence in dairy segment with its cheese, yogurt and milk-based products will enter into packed milk category in September this year. Efforts are on in progress for milk procurement.

Varun Berry, MD, Britannia Industries, said, “We will launch 50 innovative products this year. We will also strengthen our exports, which currently accounts for seven per cent of our overall revenues.”

Manufacturing investments
Britchip Foods, a joint venture of Britannia (with majority holding) and Greek food company Chipita, plans to begin production at its green-field facility being established in Ranjangaon in Maharashtra by 2018-end, with an investment of Rs 1,000 crore. The company is also open for more collaboration in future to explore new segments or product categories.

Britannia has recently commissioned units in Mundra and Guwahati. By acquiring companies in the GCC countries, the company is strengthening its presence in those markets. The company is eyeing for expansion in Africa and South Asia.

On the sustainability front, the company is increasingly deploying renewable energy, which accounts for one-third of its source. In the health perspective, the company is making conscious effort to bring down the usage levels of sugar and salt in all of its products.

The company which earns upto 70 per cent of its revenues through biscuits segment is planning to relaunch its packs as a part of its renewed branding strategy by January/February 2019. In next five years, the company will have 50 per cent of biscuit portfolio and remaining 50 per cent to be non-biscuit.

Shah added, “Based on the insights from consumer behaviour in the last 10 years, we have mapped our strategy to identify new segments of products we would like to enter. We are eyeing a ‘share of wallet’ with a range of products in our portfolio.”