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03-03-2013
Introduction to Britannia
Britannia Industries Limited is an Indian foodproducts corporation based in Kolkata, India. It is famous for its Britannia and Tiger brands of biscuit, which are popular throughout the country. Britannia has an estimated 38% market share. The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products
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Industry-Food processing Founded-1892 Headquarters-Kolkata, West Bengal, India Number of locations-300 stores (2000) Area served- India Key people- Nusli Wadia, (Chairman) Vinita Bali, (MD) Products Bakery products, including biscuits, bread, cakes and rusk, and dairy products, including milk, butter, cheese, ghee and curd. Revenue- 4,670 crore (US$931.67 million) (2011) Profit- 134 crore (US$26.73 million) (2011) Parent Group- Danone Wadia Group
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Evolution of Britannia
The company was established in 1892, with an investment of Rs. 295.Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the Gupta brothers mainly Nalin Chandra Gupta, a renowned attorney, and operated under the name of "V.S. Brothers." In 1918, C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in big demand during World War II, which gave a boost to the companys sales. The company name finally was changed to the current "Britannia Industries Limited" in 1979. In 1982 the American company Nabisco Brands, Inc. became a major foreign shareholder.
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Short-term Objective : To improve image to shareholders. To improve internal processes and controls. Long-term Objective :
To be the lowest-cost producer in the market. To become largest volume player in the bakery industry.
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Management team
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Weakness
Decreases nutritional value Increase the cost of food product Regular usage of processed food can cause alteration in health
Widely Accepted in all Generations Provide good instant Remedy for hunger in the form of readymade food
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Products
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Products
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Biscuit market
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Competitors
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MAJOR PLAYERS
MINOR PLAYERS
EMERGING PLAYERS
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Market share
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Britannia overseas
Britannia in the Middle-East
In March 2007, Britannia Industries Limited formed a Joint Venture with the Khimji Ramdas Group, one of the largest and the most respected business conglomerates in the Middle East. Britannia and its Associates have acquired a significant stake in Dubai based Strategic Food International Co. LLC and Oman based Al Sallan Food Industries Co SAOG. The two companies are key regional players in the biscuits, wafers and cookies segment in the GCC markets and export their products across the world.
Strategic Food International Co. LLC (SFIC) is one of the largest biscuit and wafer manufacturing companies in the Middle East.. It offers a wide spectrum of products under the brand Nutro, which is a leading biscuit brand in the Middle East.
Al Sallan Food Industries Co is one of the foremost companies for the production of cookies, rolls and chocolates. The products are well known under the brand name of Baker's Pride.
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Strategies
EAT HEALTHY AND THINK BETTER GOOD FOR HEALTH, GOOD IN TASTE EAT BRITANNIA AND GO FOR WORLDCUP= 37% INCREASE IN SALE BRITANNIA LAGAAN MATCH- WINNER WOULD GET A CHANCE TO PLAY CRICKET WITH FILM STARS
19EatHealthy,ThinkBetterGoodforhealth,goodfortaste"EatBritannia,GoforWorldCup1999&2003=37%increaseinsale'BritanniaLagaanMatchWinnergotchancetoplaycricketmatchwithfilmst
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Milk Bikes Children b/w 7-14 yrs of age Little Hearts For Teenagers Class friends Marrie Gold Undisputed Universal brand Good Day to infuse happiness into peoples life Bourbon adolescent/adult indulgence category.
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Challenges
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Inflationary hit
One of the biggest challenges facing biscuit maker Britannia Industries has been escalating input costs, with food inflation rates hitting 16-17 per cent. The company, says Managing Director, Ms Vinita Bali, is currently trying to work around that problem through several cost-cutting measures. Ms Bali has set an internal target of pruning costs every year. The company is working its way around cost and revenue management, product and packaging innovation, and bringing in more efficiency in its marketing and distribution activities to beat the impact of food inflation. Every year we have a target to reduce cost and remove inefficiencies right through the value chain; whether it is manufacturing, logistics, selling and distribution. In the last four years, we eliminated close to Rs 180 crore, Ms Bali disclosed. With input costs rising, going up by almost 16 per cent in the last 12 months, the company did make one large adjustment last year through a price increase and grammage adjustment of its products.
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Parle has overtaken Britannia in the biscuits market which is Rs 11,000 plus in terms of revenue. Parle has close to 45% share of the biscuits market while Britannia has 38% share. For years, these two companies were tied in market share with 35 % share each. The advantages which parle has had is its better distribution in the rural market along with competitive pricing. Definitely 2 measures which give it competitive advantage. On the other hand, Britannia increased its pricing which subsequently reduced its volume thereby affecting its market share.
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Comparative Analysis of Parle G and Britannia Tiger Nearest competitors in Glucose Category. Tiger gained 28% market share in 100 gram Glucose biscuit segment in a short span of 7 years (1997 - 2004). VERSUS Parle G established since 60 years 57% market share in this segment. In 2006 07 Parle G raised price for its 100 gram pack by 50 paise (i.e. Rs 4.50), while Tiger maintained its price at Rs. 4.00 RESULT Sales of Parle G dipped to Tiger. Customers of Parle G tended to switch over to Tiger.
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