New Delhi, February 16 The bakery company, Britannia Industries, will invest to compete against smaller players and in e-commerce to strengthen its position in product categories like biscuits, rusk, cake, croissants, and wafers.
As part of its strategy, Britannia will adopt a "startup mentality" to compete with smaller players that have influence in specific markets, said Managing Director & Chief Executive Officer, Rakshit Hargave.
"We will be competing against regional players, and we will be investing in e-commerce. Yes, this will require more funds. We are committed to making these investments. We believe that there is definitely an opportunity for us to improve our top-line performance," Hargave said during an investor call.
He emphasized that driving top-line growth is critical for expanding Britannia's consumer base across its brand portfolio, and the company will take a "pragmatic approach" to balancing ambition with available resources.
Britannia, which owns popular brands such as Good Day, Tiger, NutriChoice, and MarieGold, will view regional competitors as "a group of enterprising businesses" rather than national competitors.
"Therefore, we will adopt a startup mentality to compete with these businesses. We will ensure that our ambitions are greater than our resources. And we will actually achieve better results. So, we will manage expectations accordingly," he said.
Hargave pointed out that inflation and delayed price increases had previously impacted margins, but with commodity prices stabilizing, profitability has improved.
"Now, with stable commodity prices, we are seeing the expansion of margins," he said.
February and March are critical seasons for wheat, and based on this, we will see how the price behaves in the future. However, at the moment, it seems stable. Moreover, sugar is also "relatively stable," and he believes that it will remain so. Similarly, cocoa has also come down, he said.
"The price of laminate is also very stable, and the price of milk is also slightly stable. We will see how the price of milk behaves in the future," Hargave added.
While replying to a query, he said that Britannia is also open to inorganic opportunities to build a composite portfolio.
"Not everything can be built organically. So, this option is also open to us," Hargave said, hinting at possible acquisitions.
He acknowledged that sell-out and consumption trends have stabilized, but regional competition remains a challenge not just in the east but across other regions.
"The eastern region is a hotbed of competition, but regional competition also exists in other regions," he said, adding that addressing these specific markets is a strategic priority.
Britannia's Chief Commercial Officer, Vipin Kataria, who was also on the call, said that regional players operate based on their understanding of flavor and consumer preferences, and they have created certain formats that are very effective.
"To counter them, we are investing in our brands," Kataria said, noting that regional players have strong consumer insights and innovative formats.
Britannia's current strategy is to quickly adopt and adapt to the manner in which these regional players are developing their flavors and formats, and to quickly gain a foothold in certain markets where they are facing resistance.