Sales Of Good Day, Marie Gold Aided Britannia During Q1 Amid Covid-19, Says Varun Berry
A national lockdown imposed to curb the Covid-19 outbreak forced millions of people to stay indoors and increasingly consume packaged food. That aided Britannia Industries Ltd.’s financials.
The company, whose revenue rose by nearly a third in the quarter ended June, is planning expansion worth nearly Rs 700 crore over the next two years for its products, including Marie Gold, 50-50 and cream crackers.
Its star-performing brands during the lockdown, according to Varun Berry, the biscuit maker’s managing director, were Marie Gold, Milk Bikis, Nutri Choice and Good Day. Demand for dairy products and bakery products like rusk and bread, he said, remained high in the last 3-4 months.
And Berry expects the trend to sustain. “Two things, one is smaller players (in the unorganised bakery segment) who got any kind of cash constraint, will find it tough to operate in this environment,” he told BloombergQuint in an interview. “So, we might benefit from all of those smaller players.”
Consumers gravitate towards “strong brands” during times like these, he said, adding Britannia being “the most trusted food brand in the country” will benefit from it.
The company expects demand for its products in rural India to outpace urban demand by about 2-2.5 times as the agricultural economy is looking robust. Britannia, as part of its outreach, is adding towns and villages where its products aren’t available.
Berry also ruled out the possibility of price hikes as he expects inflation for the company’s raw materials to remain at 3-4% for the rest of the ongoing fiscal.
As supply chains took a hit during the initial period of the lockdown, the maker of Jim Jam biscuits also reduced producing certain stock keeping units and only focused on those that garnered higher volumes. With supply chains returning to normalcy, the company has already started making and disturbing 75% of its SKUs and expects to return to 100% of its portfolio in the next 30-45 days.
Britannia saw its inventory days fall to one from the usual 11-12 days in the three months through June on the back of high demand.
The “Hindi belt” in northern India continues to be the company’s focus area as it aims to ramp up distribution. Uttar Pradesh has become Britannia’s second-largest revenue generator, which until recently was a “weak market”, Berry said.
Watch the interview with Varun Berry: