We Operate With The Mindset Of Saving Every Penny: Varun Berry, MD, Britannia Industries

Having completed 100 years recently, Britannia is looking at a re-imagined start. The company has completed a rebranding exercise to leverage new market opportunities and its leadership is exploring ways for pan-India dominance and becoming a global foods company. Varun Berry, MD, Britannia Industries, spoke to Ruhail Amin about how Britannia is aiming for a bigger market share. 

Excerpts:

 What was the inspiration behind the massive rebranding exercise? 
We researched this for almost a year and when we went to the consumers, what came out was like a fulcrum. We have excitement on one side and goodness on the other and we were perfectly balanced. All other food brands in India would tilt on one side. What was required was modernisation. With that insight, we started to evaluate things and started an alienation test with current consumers. It showed  that they liked it. Most of the current consumers also thought that this was a more modern logo. That gave us the confidence that this is the right way forward.

What would you call the biggest factors that have helped in the longevity of brand Britannia?
With a humble start, what we have been able to do is fairly rare.  We have made sure that we keep the structure tight and we don’t build structures that are not required. We are a fairly large organisation; Rs 10,000 crore is a fairly large organisation, but it seems like a small family.  It does not look like that we are working in a large company.  These are the things that we have been able to create and I feel proud of it.

What we have also done is to focus on one part of the business and built that into a very large business.  Biscuits are a large part of our business and, in fact, five years ago, there were businesses we had gotten into, which we shut since we thought there is so much to do in the core business.

What is your vision to create an end-to-end macro snacking company?
The macro snacks category is huge. In India, there is a lot of snacking that happens through the day, and there has been replacement of street food, to a large extent, by packaged food, because hygiene has become an important factor.

Our job is to create an end-to-end macro snacking company and bring in products, which are tasty and certainly more hygienic. So, every category will be assessed.  We are taking category by category, assessing whether we have a right in succeeding in that category, and if we do, we look at the kind of products we can do.

 What would you call your three biggest learnings at Britannia?
The biggest ‘aha’ for me is the tremendous talent that Britannia has been able to build. My learning is that collaborative working at the top and building a deep base of talent through the organisation is very critical. Second learning is that your base has to be very solid. If you try to do too many things at the same time, your base will be a little wobbly and you could get into trouble and that is what we did. We walked away from a lot of other stuff that we were doing and built a very solid base and then moved on to other categories. Third is the distribution network. When I was a management trainee in Brooke Bond,  I was doing a salesman stint in Jalandhar and what struck me was the kind of distribution Britannia had. Over a period of time, something happened to the distribution set up, which I obviously missed because I was working with different companies. I think we became a little transactional in our approach. As far as distribution is concerned, it is about the hard yards of getting the product in; otherwise even a strong brand like Britannia can lose it.

How are you looking at a strong pan-India strategy now? 
This company has been very cost conscious. We operate with the mindset of saving every penny. The kind of work we do, we save around Rs 200-250 crore every year. If you start looking at the country in concentric circles, what you see is that the strongest part is Tamil Nadu. As you start moving away from Tamil Nadu, you start to see a weakening of share. Towards the east, it is a little stronger, towards the west it is okay, and as you start to move towards north, it starts to fade. It is easy to say that in Gujarat we want to go from 10 to 30 per cent, but it doesn’t happen. For that you have to do some short term measures, like  discounts, you have to do unsustainable advertising and, in doing that, the cost structure goes for a toss.

 We used to have 4-5 States with single digital share and now there is no State where we are in single digits. Now, we are in the teens and slowly moving up. In all the Hindi States, the growth is at least one-and-half times and, in certain cases, even more than two times. For example, in Rajasthan, the growth is 37 per cent, while the company is growing at 14-15 per cent. But it is not because of any short term measure. We are not spending extra money, we are doing the hard yards of building distribution, making sure we create the right distributors, helping them sell our products and that again comes back to my point of having a strong brand.

Finally, what is your strategy for the global markets? 
We are going to be a total foods company and we want to be a global foods company. We have got to assess where is our right to succeed and move into those markets.