Keeping store-shelves stocked is Britannia’s challenge

Stocked out shelves, supply chain disruptions, under-utilised plants, shut distributors, ‘feet-on-ground’ salesmen not turning up... All of these are a business chief’s worst nightmare. But that’s the reality for everyone now, says Varun Berry, Managing Director of biscuits-to-bread maker Britannia Industries Ltd.

Ever since the lockdown began on midnight of March 24, Berry has been at home, marshalling his troops as best as he can to ensure Britannia products get to the shelves. But the problems are multifarious, he says.

“The issue is that the supply chain, which has so many links, is not normal; we have clearance only for a few production people to operate the plants, so most plants are operating only at 20-25 per cent capacity,” says Berry.

Britannia has 16 factories and 30 contract packers, churning out one lakh tonnes of biscuits in a normal month. But, now, the output is far lower. “If we have to operate with the number of people we’ve got clearances for, we could probably get to around 35 per cent capacity,; but even those who are allowed to come are not turning up,” he says.

Getting trucks and drivers is another problem, and many distributors are not operating. The company has been able to reach stocks to 75-80 per cent of distributors but many say salesmen are not operating at full strength. “What’s happening is that whoever is having stocks is selling somehow, so it’s not in an organised way that sales are happening; it’s a very disorganised way of getting product to the market and it will continue for some time. Hopefully, April 15 onwards it will start to get more organised,” says Berry.

Even among the distributors who have opened up, many are selling biscuits at their counters only as they don’t have salesmen to deliver to the stores.

Britannia’s MD says the company is unable to get its biscuits to even 50 per cent of the stores it normally covers. The company reaches 5.2 million outlets directly and indirectly, but now its products are reaching only two million outlets and, of those, probably reaching around 1.4 million outlets directly. “Times are tough,” sighs Berry.

Fast-moving brands

The factories, he says, have prioritised making fast-moving brands such as Britannia Marie and Milk Bikis. “We are going by the 80:20 rule; push the fast moving stuff before we get to the premium and niche stuff. Marie and Milk Bikis are the faster moving products in this environment. Distributors, too, want to push the faster moving products,” says Berry. However, production of bread, the base of the business, is holding up well.

While he’s resigned to a disappointing quarter of sales, Berry is positive that things will get better.

“If we are able to control the coronavirus, then it will all be worth it; a little bit of pain for long-term gain is good. If we return to normal soon, we can recover quickly,” says a sanguine Berry.

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