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The lanky Varun Berry, Chief Operating Officer of Britannia Industries, has his job cut out. Managing Director Vinita Bali’s stewardship of the foods company through some challenging times has now taken it to a new high with the company reporting better-than-expected results for the quarter ending March 31. The stock has vaulted 18 per cent over the last two trading sessions, and hovers close to a two-year high.
The announcement that Berry will handle the India business of Britannia, while Bali will grow the global, comes as no surprise to those who have known Berry for years. A former colleague at PepsiCo, where Berry, in his early 50s, worked for over 18 years, recalls him as the quintessential salesman, driven by numbers.
Berry, who cut his teeth in the school for marketers, Hindustan Unilever, where he worked with the erstwhile Brooke Bond before its merger with HUL, was later part of the core leadership team at PepsiCo, when he worked closely with former Pepsi chief Suman Sinha.
An MBA from the Faculty of Management Studies, University of Delhi, Berry worked as southern regional head for Pepsi in Chennai from 1998 to 2000 before he moved to Vietnam. A long and successful stint in Vietnam, the Philippines and West Asia followed before he moved back to India to head the foods division of PepsiCo in 2009.
In 2010, Berry oversaw the creation of a separate company, Lehar Foods. The objective, Berry said in an earlier interview to Business Line , was simple: Have a separate team, be very entrepreneurial, keep the fixed costs down, be nimble, move fast, do local and regional variants and get a larger share of the traditional snacks category. Berry had an aggressive plan to grow in three years, in volume terms, Pepsi’s snacks business to about 40 per cent of the size of its blockbuster chips business.
However, Berry quit Pepsi suddenly in early 2012, saying he wanted to venture out on his own. He worked with former Pepsi executives on some start-ups for several months before he was roped in by Britannia as COO in January this year.
Expectations from Berry will be high, given Britannia’s recent performance. What stoked the market’s excitement was the unexpected expansion in the company’s operating profit margins in the latest quarter to 8.8 per cent from 6.1 per cent last quarter. Net profits, helped by ‘other income’, vaulted 65 per cent. Overall, Britannia closed 2012-13 much better than much of India Inc, with sales up 12.5 per cent and better margins helped by declining raw material costs.
Analysts are betting on the company’s changing product mix lifting its growth rates as well as profitability. Recognising that food products such as bread, cakes, dairy and snack foods present higher growth opportunities than biscuits, where ITC is breathing down its neck, Britannia has launched several new products that straddle both wellness and food in the last couple of years.
It is here that Berry’s experience in the foods business can make that difference.
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