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Wider network, investment in brands paying off: Britannia

Varun Berry

Varun Berry  

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Posts sales growth in States that earlier saw muted activity

Britannia Industries Ltd. had succeeded in increasing penetration in four States where it had been trying to mark a wider footprint. The food products maker’s focus on a few basic strategies also helped it improve business performance.

Increase in direct reach, growth in rural areas and higher penetration in these States had helped the firm post ‘good’ results.

‘Double-digit growth’

“Our double-digit volume growth came on the back of investment in brands and widening our distribution network through focus on direct reach, rural and weak markets We continued our premium-isation and innovation journey,” Varun Berry, MD, said in a statement. BIL is now planning 50 product introductions by 2020, apart from 16 new ones this fiscal.

In Rajasthan, M.P., U.P. and Gujarat, net sales value rose 20%-29.8% in the third quarter of fiscal 2018. BIL had been trying to increase sales in these States for sometime.

‘Basic execution’

Third-quarter revenue rose 13% to ₹2,558 crore, while consolidated net profit climbed 29%.

“Focus on basic execution is driving the company’s growth,” BIL said on an investor call, elaborating that its five execution focus areas were increased distribution footprint, premiumisation, attaining cost leadership, leveraging fixed costs and driving profitable growth. The areas of cost efficiencies included reducing distance to market, reduction in wastages and setting up new and large factories for efficiencies.

The company was comfortable on the raw material prices front as price of key inputs like flour, milk and sugar were stable. However, its growth in its dairy business remained soft although profitability improved with increased focus on value-added products.

Britannia, which is best known for its range of biscuits cakes and rusks, also has products like ghee and cheese. It had recently entered the snacks category, through its joint venture, for making croissant. In cakes and rusk , it said innovation was under way through new formats, although no further details were available. BIL is also trying to bridge its portfolio gaps in its biscuits business and other adjacent snack segments.

The company’s greenfield units at Guwahati, Assam and at Mundra, Gujarat for the servicing exports markets are expected to be commercialised soon, according to Mr. Berry.

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Printable version | Jan 26, 2020 5:33:11 AM | https://www.thehindu.com/business/wider-network-investment-in-brands-paying-off-britannia/article22911184.ece

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