Company Analysis

Britannia Industries Limited

Background:

Britannia was incorporated in 1918 as Britannia Biscuits Co. Ltd. In Calcutta. In 1924,
Pea Frean UK acquired a controlling stake, which later passed on to the Associated
Biscuit International, a UK based company. During the 50s and 60s, Britannia expanded
operations to Mumbai, Delhi and Chennai. Exports of sea foods started in the 70s. in
1987, Nabisco, a well known European food company, acquired ABI. In 1989, J M Pillai,
a Singapore based NRI businessman along with the Groupe Danone acquired Asian
operations of Nabisco, thus acquiring controlling stake in Britannia. Later, Group Danone
and Nusli Wadia took over Pillai’s holdings.
In 1977, the government reserved the industry for small scale sector, which constrained
Britannia’s growth. Britannia adopted a strategy of engaging contract packers in the
small scale sector. This led to several inefficiencies at the operating level. In April ’97,
the Government dereserved the biscuit sector from small scale. Britannia has expanded
captive manufacturing facilities and has modernized and upgraded it facilities in the last
five years. It has also forayed into the Dairy Business with the launch of Cheese, Butter,
Ghee, Dairy whitener and flavoured milk products. Recently it tied up with Fonterra, a
New Zealand based dairy products major.
Britannia’s controlling stake is jointly with Groupe Danone and Nusli Wadia. This group
is one of the leading players in the world in bakery products business. It acquired
interest in Britannia industries in 1989 and acquired controlling stake in 1993. Nusli
Wadia group is one of the leading industrial houses in the country, with interests
mainly in textiles and petrochemicals.
Britannia as an organization:

Britannia is a professional organization. The hierarchy is like that of a typical FMCG

company. The boss in the organization is still called by his first name, but the relations
with the peers are very good. The surprising aspect during my summers, was that I
have never heard any kind of criticism about the organization from any of the
employees. The best part in Britannia is that the worker at the shop floor is very quality
conscious. Techniques like Kaizen are very effectively carried out.
Employees have faith in their CEO Mr. Sunil Alagh. They give the credit of the change of
the face of Britannia after 1997, to him. Effective leadership along with good work
practices, make Britannia a good organization to work with.

Key strength of this organization is its endeavour to provide quality products to its
consumers. Shop floor is the cleanest area in the whole factory. Cost cutting drive is a
regular feature in its factories. Every week, the kaizen team has to make a presentation
to the factory head, regarding the cost reductions achieved.

Important events:

Britannia changed its logo and the punch line in 1997. Its punch line ‘Eat healthy
think better’ has given them a new identity. One of the most successful campaigns for
Britannia has been, ‘Britannia khao World Cup jao’ during the last cricket world cup.
It helped increased its sales by more than 60%.
Established brands like Tiger, Marie, 50-50 etc. are its major strengths in the market.
Strong distribution channels along with strong brands, have made it possible for
Britannia to make its presence felt even in remote villages.
Product strengths:

Tiger is a brand for the mass market. Its competition is directly with Parle-g. Both the
products are identically priced. None of the brands can afford to price it even 1 paisa
higher. The company does not make enough profits on Tiger, but this brand help them
to give more visibility and also helps in placing their lesser known brands on the shelf.

Good Day is a quality brand in the cookie segment. It has a strong presence in the
urban market, but not in the semi urban or the rural market.

50-50 is also a very strong brand, which competes against Parle’s Krackjack.

In the premium segment, they have popular cream biscuits like Bourbon, Pure Magic
etc. There are other biscuits in the market in the name of Boubon because they don’t
have a trademark over this brand name.
Britannia has a lack of variety in the salty biscuits. They have had problems with ‘Snax’
variety. Inconsistent quality and distribution problems have caused its downfall.

Future course:

Britannia’s mission is to make every 3 rd Indian a Britannia consumer by the end of 2003.
this is the reason for Britannia to diversify its portfolio by introducing dairy products.
They are also trying to reenter the family size pack biscuit market, which is dominated
currently by Priya Gold. It was previously thought that Priya Gold is bought by
consumers only because of lower price. But research has shown that consumer prefer
Priya Gold because of taste and quality as well.
In a short time, Priya Gold has grown to a size of 100 crores. This growth has greatly
threatened Britannia in the biscuit market. To counter this threat, Britannia is planning
to come out with a new strategy. My project also revolved around building a strategy
for them to enter this market, which is termed as the discounted biscuit market.