As part of its strategy, Britannia will have a “startup mentality” to compete with small players having influence in small pockets, said Managing Director & Chief Executive Officer Rakshit Hargave.
“We are going to be fighting regional competition, we are going to be investing in e-commerce, yes, that will require more funds. We are committed to invest that. We believe that the opportunity for us to drive topline better is definitely there,” said Hargave in an investors’ call.
He stressed that driving topline growth was critical to expanding Britannia’s consumer base across its portfolio of brands, and the company would take a “pragmatic view” of balancing ambition with resources.
Britannia, which owns popular brands such as Good Day, Tiger, NutriChoice and MarieGold, will take regional competitors as “small group of enterprising businesses” and not treat them like national competition.
“So we will have a startup mentality to fight these people. We will make sure that the ambition that we have are more than the resources that we put. And we actually deliver it better. So, we will manage the expectations accordingly,” he said.
Hargave pointed out that inflation and delayed price hikes had impacted margins earlier, but with commodity prices tapering off, profitability has improved.”Now, with the commodity prices stable, you see that expansion of margins,” he said.
February and March are critical seasons for wheat, and based on this, we will see how the price behaves going ahead in the future. But at the moment, it looks to be stable. Morover, sugar is also “kind of stable” and he believes that it will remain relatively stable going ahead. Same with cocoa, which has also come down, he said.
“Laminate price is also very stable, and milk price is also slightly stable. How milk behaves going ahead in the future is what we have to see,” Hargave added.
While replying to a query, he said Britannia is also open to inorganic opportunities to build a composite portfolio.
“Everything cannot be built from organic. So that door is also open for us,” Hargave said, hinting at possible acquisitions.
He acknowledged that sellout and consumption trends have stabilised, but regional competition remained a challenge not just in the east but across other clusters.
“East is a hotbed of competition, but regional competition exists in other clusters also,” he said, adding that addressing these pockets was a strategic priority.
Britannia Chief Commercial Officer Vipin Kataria, who was also on call, said that regional players operate on their strength of understanding of flavour, consumer, and they have created certain formats which are very good.
“To counter them, we are building and increasing our investment in the brand,” Kataria said, noting that regional players have strong consumer insights and innovative formats.
Britannia’s game right now is to make sure that “we quickly adopt and adapt the manner in which these regional players are developing these flavours and formats and very quickly hit them in certain pockets of the market where we are getting a pushback.”
