Good Read

Spoonfeedin WOrld

Business – Q&A Vinita Bali,Britannia CEO & MD

Ratna Bhushan

Vinita Bali, an alumni of the Jamnalal Bajaj Institute of Management, is referred to as ‘turnaround expert’ with excellent marketing and
intuitive skills. She not only spruced up the Nusli Wadia-promoted Rs 3,143-crore Britannia into a diversified packaged foods company, but also steered it through completion of the share buyback from Groupe Danone after a protracted board room battle, acquisition of Fonterra’s 49% stake in a dairy JV, and taking full control of bakery retailer Daily Bread.

Since she joined Britannia in January ‘05, Ms Bali has taken the company through intense pressures on profit margins, heightened competition, spiralling raw material prices, and slow economic growth. A career spanning soft-drink concentrate (Rasna) to chocolates (Cadbury) to soft drinks (Coca-Cola), biscuits and now textiles (Britannia and now Bombay Dyeing), Ms Bali’s plate is brimming. ET caught up with the company’s MD and CEO of four years to share her thoughts on constant challenges and competitive pressures. Excerpts:

In four years, you have transformed Britannia into a health and nutrition-focused company with differentiated packaged foods brands. What is the way forward for growth?

There is obviously no magic elixir. Growth invariably is the outcome of profitably growing revenue, with a sharp focus on operational excellence and cost effectiveness. This calls for being innovative in terms of new ideas and being disciplined in implementing those ideas. That apart, there is scope for continual improvement in procurement, manufacturing, logistics, and more.

How challenging has it been to deal with pressures of market shares and profitability specially with the economic slowdown?

As you yourself have pointed out, a slowdown in the economy means we have to learn to run faster than we have in the past and also run faster than other choices available to consumers.

As you would have noticed in the results we have declared so far which pertain to the first quarter, we have maintained margins despite significant increases in input costs and a disposable income growth that is lower than last year.

FMCG companies have been banking heavily on rural growth. What percentage of your sales are coming from rural markets? Do you see escalation of growth from rural markets or balanced growth from urban and rural?

The importance of rural markets varies by brand. For example, in our dairy portfolio, rural does not play a significant role at all, as yet. But in some of the universally-consumed biscuits like Tiger, Marie and 50-50, the share of rural can be as high as 40 to 50%.

Besides, overall distribution has gone up. Additionally, we have created and unlocked new opportunities like the Rs 200-300 crore business of personal consumption packs at the very affordable Rs 5 price point.

Britannia’s FMCG business is split into biscuits, dairy and retail (Daily Bread). But the company appears to be going slow on dairy and Daily Bread ventures (which Britannia recently took 100% control of), with biscuits remaining the core focus.

That is not true. While biscuits continue to be the core part of our portfolio, we have made a significant shift in the other businesses with dairy, bread, cake and rusks contributing to approximately 20% of our business, compared with less than 15% four years ago. As for the Daily Bread business, it is focused in Bangalore and right now we are not looking at a national foot print for the brand.

With the direct role of Bombay Dyeing in your charge now, what are your plans for the home textiles business? With the top-deck of the textile business being reorganised, are you planning to rejuvenate the Bombay Dyeing brand to address a younger consumer?

I would prefer to talk about Bombay Dyeing separately. Suffice it to mention that Bombay Dyeing is run by a CEO who is responsible for delivering on the plans approved by Bombay Dyeing.

Biscuits is a very price-sensitive category. How are you dealing with spiralling input costs like that of sugar?

Through a combination of revenue management and cost effectiveness, we have adopted various measures to cut costs and improve productivity to maintain margins. We have also focused on reducing energy requirements and cutting out waste through better use of energy. We look at costs, revenues and pricing as a dynamic proposition.

Britannia has announced the establishment of a foundation to promote nutrition in the country. How do you see the foundation panning out in India? Will all future launches from Britannia focus on nutrition?

The role of the Britannia Nutrition Foundation is to increase the level of understanding and competency of the many dimensions of nutrition. It is a significant step in our aspiration to provide wholesome and healthy products, and more importantly to focus all round attention on the issue of nutrition, which is a social issue needing urgent attention in our country.

To add to that, we have a large and growing portfolio in biscuits and dairy which delivers health and nutrition. For example, we have been removing ingredients that are unhealthy – Britannia is the only company to have removed transfats from its biscuit portfolio. We have provided iron fortification in Tiger and vitamin and mineral fortification in Milk Bikis, bread and Marie.

In our dairy portfolio we make available products like milk and dahi which are low in fat, or have fat option under the Slimz range. We are always exploring introducing healthy foods across segments. We are always exploring products at both ends of the spectrum from healthy and nutritious like Nutrichoice and Marie, to delightfully indulgent like Bourbon and Pure Magic for the simple reason that both are relevant to most people.

In the fast growing glucose segment, Tiger is trailing Parle-G .

Parle-G has historically dominated the glucose segment and Britannia’s entry in this segment was about a decade ago in 1998. Over the years, Britannia has invested in creating a differentiated offering and Tiger is now available not just as a plain glucose biscuit, but fortified with iron. The Tiger franchise has also been extended to banana, coconut and cream.


October 19, 2009 - Posted by | Uncategorized |

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: