Companies

Britannia readying for a bigger bite of premium biscuits in Hindi heartland

Kolkata Kolkata | Updated on January 15, 2018 Published on November 14, 2016

Varun Berry, Managing Director, Britannia Industries

Biscuit-major Britannia is looking to consolidate its position in the Hindi-heartland and Gujarat. The company is eyeing upping its portfolio in the weaker markets even as it ramps up distribution presence.

Apart from Gujarat, the other “traditionally weak” States include Uttar Pradesh, Rajasthan, Bihar, Madhya Pradesh and Chhattisgarh. Sources indicate Parle to be the dominant brand here.

Britannia earns 45 per cent of its revenue from economy products and the remaining 55 per cent from premium segments.

According to Varun Berry, Managing Director, Britannia Industries, in these “weaker States” Britannia’s penetration is around 20-22 per cent; that is – for every 100 stores, Britannia products are stocked in some 20-22 ones.

“What’s giving us a little bit of uptake in value is our foray in the Hindi belt in where we were traditionally very weak,” he told BusinessLine during an interview.

Distribution strategy

According to Berry, the first task for the company is to ramp up its distribution channel here.

Value products are being used as “carriers” to get into the outlets.

The company then follows up by pushing for premium offerings as the brands get more foothold there — a strategy that it has adopted across most markets.

“It is not about products. We always had the right products. Once we build that distribution footprint, we use the value products as the carrier product. And then we lure in our GoodDay, Marie, 50-50 and other brands,” he explained.

“So we get in our whole bouquet of products into this outlet. And that’s what giving us the growth and shares in these markets,” Berry added.

Improving market share

The strategy is already bearing fruit for the company. Britannia’s market share has improved to 13-14 per cent in these weaker markets.

In these States, Britannia’s market share was in “single digits” till two years back.

“Although we are growing very fast, we are still not where we would like to be,” Berry pointed out.

The aim now, is to have an over 20 per cent market share.

While, rural sales account for 30 per cent of Britannia’s turnover, a good run in the Hindi heartland will help the company achieve its larger target of a 50-50 break-up between urban and rural sales in the next five years.

Its market share in the value (or economy) segment is just 9 per cent.

Published on November 14, 2016
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