Rather than hike product prices, Britannia is banking on product innovations to boost brand sales and add value to the consumer experience.
Vinita Bali, CEO, Britannia Industries said, “Biscuit prices have remained firm for the last five-six years for existing brand and categories. Given the exorbitant and unprecedented inflation in commodities this year and the high level of taxes, VAT at 12.5 per cent, margins for the industry are under pressure. Britannia has focused on innovations to add value to consumer experiences with its brands.”
In the past year, the company has launched offerings like Marie Gold Doubles which combined three flavours in one biscuit, Pepper Chakkar, Chota Tiger and Greetings to widen consumption categories.
Greetings, the gifting brand that the company introduced last year is expected to grow 200-250 per cent over last year with an extended range being introduced this year.
“Though traditional Indian sweets have their own taste and charm, the Indian consumer is increasingly looking for choices in everything including gifting,” explained Bali as to why the company introduced a special gifting brand.
Britannia, which has been growing at 25 per cent is in the process of expanding its manufacturing capacity in Uttaranchal along with setting up new facilities in Rudrapur to meet the increasing product demand.
Apart from biscuits and snacking (Maska Chaska and Pepper Chakker) the company is also increasing focus on categories like rusks, cakes and bread. Good Day cupcakes, which were being test marketed in the south have now been rolled out across the country this year.
Bali said the company would also look at expanding the DeLuca Gelato Italiano brand to the major metros over the next four years.
This is being done through Daily Bread, a boutique bakery that Britannia had picked up a strategic stake in earlier this year. This acquisition is likely to spearhead the company’s foray into other bakery products like value added breads.
Meanwhile, the diary joint venture with Fonterra is expected to grow at 15 per cent this year and garner revenues of Rs 120 crore by 2006-07.
“Britannia will continue to introduce innovative products based on consumer research,” said Bali, adding that the company would not get into liquid milk, preferring to focus on value added offerings.