We now want to be a global foods company: Varun Berry, MD, Britannia
Berry spoke about brand longevity and how Britannia is now aiming to go international after 100 years of existence in India
Britannia recently announced a massive rebranding exercise to celebrate its 100th anniversary. This rebranding exercise is also a manifestation of Britannia’s new strategy to consolidate its presence pan India.
In an exclusive interview, Varun Berry, Managing Director, Britannia Industries, spoke about brand reinvention and how Britannia is aiming for a bigger market share. Edited Excerpts:
Tell us about the massive rebranding exercise, which you have undertaken recently, what was the thought behind it?
It was not a small 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 the one side and goodness on the other and we were perfectly balanced. All other food brands in India would tilt to one side versus the other. So what was required was modernisation. With that insight in mind, we started to evaluate things and we also did an alienation test with current consumers and it came out that they liked it (the idea of rebranding). Most of the current consumers also thought that this was a more modern logo, so that gave us the confidence that this is the right way forward.
The longevity of brand Britannia is a case study in itself. How would you define the factors that have made it such a robust brand?
With a humble start, what we have been able to do is fairly rare, if you think about it. We have made sure that we keep the structure tight and that we don’t build structures which are not required. We are a fairly large organisation at Rs 10,000 crore, but it seems like a small family. It does not look like we are working in a large company that has spread-out operations and is hierarchical. 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 build that into a very large business. Biscuits are a large part of our business and in fact, five years back there were some other businesses we had gotten into, which we shut since we thought there is so much to do in the core business (alone).
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 with 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 exciting, tasty and certainly more hygienic. So that really is what we are going to do. But it is not that we are going to take up a gun and start shooting in every direction. So every category will have to be assessed, we have done a lot of work. We are taking stock of the situation category by category, assessing whether we have a right to succeed in that 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?
Learnings are every day but 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 very 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. That is what we did when we walked away from a lot of other stuff we were doing and first 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 and I used to ask people who is the Britannia distributor because it was all pervasive even while Brooke Bond was a very strong company.
Over a period of time something happened to the distribution set up, which I obviously missed because I was working with different companies. But clearly something happened; 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.
Tell us about your strategy for the international 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 it is our right to succeed and move into those markets. So getting into the right market and setting up manufacturing units in markets where we have a right to succeed are our top priorities.
You do have pockets of dominance but 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.
Tamil Nadu is our strongest market. 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’s 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 per cent to 30 per cent, but it doesn’t happen. For that you have to do some short term measures, you have to do discounts, you have to do unsustainable advertising and in doing that, the cost structure goes for a toss.
We used to have four or five states with a single digit share and now there is no state where we are in single digits. In all the Hindi speaking 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 the distribution network by 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.
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