Industry

English Edition | 08 November, 2022, 01:30 PM IST | Today's Paper

Britannia CEO Varun Berry finalising plan to build

non-biscuit categories, enter new businesses
Synopsis
The plan will essentially have details on new segments, expansion strategy into international markets and how to scale up its dairy
business.

MUMBAI: Less than a year after taking over as the chief executive of Britannia
ET Bureau

Industries, Varun Berry is busy finalising a roadmap to help shed the company’s
cookie-maker tag by building existing non-biscuit categories and entering newer
businesses. “We are in the process of drafting our strategic plan — what will we do
to our existing categories to dramatically grow them, what are the adjacent
categories that we should get to, and how to make dairy half-a-billion-dollar
business, among other things,” Berry told ET.

The plan, which will be ready by April, will essentially have details on new
segments, expansion strategy into international markets and how to scale up its dairy business. The company could be
looking at bridge categories towards chocolates and snacks. “We want to encompass the centre of the plate rather than
being on the side with biscuits,” said Berry, adding that he is just picking up the strategy from where his predecessor
Vinita Bali left off. Berry, 52, took the CEO job at Britannia in March last year, facing a number of challenges in a slowing
consumer market, which included having a portfolio of mostly premium products at a time when many consumers were
cutting back spends on discretionary items.

Day and NutriChoice biscuits has added nearly half a dozen new manufacturing units with plans to invest Rs 400 crore
in the next 18 months to set up additional capacity and increase its in-house production to 60-65% of its total sales from
about half now. The company has also doubled its direct distribution, especially in the Hindi heartland where it was
traditionally weaker. It will soon open a R&D centre in Bangalore to enable faster innovations and new launches. As part
of its cost-cutting exercise, the company has identified five key brands — out of more than a dozen brands in its portfolio
— to invest in terms of marketing.

Analysts are mostly pleased with Britannia’s strategy. “Market leadership in the core category of biscuits, ramp-up in new
launches and expansion of the health-focused NutriChoice brand, focus on the top and premium segments should aid
both volumes and margins,” wrote Balaji Prasad and Rohit Goel of Barclays Capital.

The company’s fortune has changed at the bourses too, with Britannia’s market capitalisation doubling to around Rs
22,300 crore in less than a year. Berry, former head at Pepsi Foods, is keen to ramp up Britannia’s international business
and dairy. While companies such as Marico, Dabur and Godrej Consumer earns 20%-40% of their annual sales from
global operations, Britannia gets less than 7% of revenues from outside India. “We could even acquire companies globally
as there is a huge opportunity for us to grow,” Berry said.

He said Britannia chairman Nusli Wadia is keen on shoring up the firm’s share in the biscuits market that it once
dominated despite it being a weak spot in terms of margins. After Berry joined Britannia two years ago, the company has
managed to increase its share in the Rs 25,000-crore biscuit market, but still trails Parle Products.

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