Britannia has changed hands many times, what has made the brand recall persistent?
I think Britannia as a brand is rock solid. And I think what builds the centennial companies is their robust business model and strong brand. Without these two, it is almost impossible for a company to sustain for such a long time. The interesting thing about Britannia is that it has changed many hands and remained a fairly robust business. Another interesting thing is that about 10 years back, our market cap was only Rs 3,500 crore, but now it has gone to Rs 1,25,000 crore. So, the journey has had many phases, but for this kind of companies, which have been in existence for a long time, something clicks at some stage, and then they become mega companies.
But hats off to the people who built Britannia and nurtured this company and gave us solid brands. Bourbon, Jim Jam, Marie Gold … all of these are very old brands that resonate with consumers even today. I think it is a great testimony to the people who built this company.
What is it that you think came together for Britannia?
The most important thing for me is that the business has to move at full steam in all directions. Internally, in Britannia, we call it the “golden triangle” which is, growing the top line in double digits, growing the bottom line faster than the top line and also growing the market share. I think that the golden triangle came together about 10 years ago, I am sure in the history of 115 years that we have, there must have been other instances of the golden triangle coming through. But at least in the last 25 to 30 years, we did not have all three coming together at the same time.
What we did was focus on the right brands and the right people. We focused on the R&D setup and made sure that we got our cost efficiencies in place. We also got our distribution in place, taking the count from 5 lakh direct stores to about 25 lakh stores. So, we progressed in every direction, and that is what has helped us take Britannia to the next level.
Another important aspect for the company is to continue to create value for shareholders. Is there pressure of continuously performing and giving high margins back to your shareholders?
You want to focus on building the business. I do not focus on the expectations from the market. We focussed on the golden triangle, which is growing profits at a higher rate than the revenue, resulting in higher profit margins. We made sure that we stay ahead of the others as far as market share is concerned. That is our mantra. Everyone in the company knows that we have to achieve the golden triangle every year. And thank God, we have been achieving it for the last 10 years. And we hope that we will be able to keep doing that as we move forward as well. And if we do, the shareholders will not be disappointed.
What are the transformational decisions during your stint that you think have powered Britannia in the last few years?
One was a clear focus on distribution—getting back to the heritage that Britannia had of being the most distributed brand as far as our categories are concerned. And the team did a fantastic job of taking that agenda and making sure that we achieved every target that we set for ourselves. Second was to make sure that we give people in Britannia the first chance at getting to a bigger job. We call it "Britannia for Britannians".
Third was the cost saving and the cost efficiencies that we brought to the table. And I am proud to say that, as a company, we are very cost-conscious.
We believe that we operate in a category, where the gross margins are lower than most other categories. And hence, for us to deliver solid profits, we have to be cost-conscious and save every penny that we can. The fourth is nurturing brands and bringing innovation to the table. I think those are the four important things from our perspective.
Where do you see Britannia five years from now?
We have made a roadmap for expanding our portfolio over the next five years. We will be stradling a lot more categories than we did 10 years ago. For example, 10 years ago, we were predominantly a biscuit company; today, we have got multiple categories within our fold. We have launched new products, and have entered into new categories. Our expansion into new categories has involved partnering with companies like Bel S.A. from France for cheese products and with Greek firm Chipita for ready-to-eat croissants.
I strongly believe that in today’s world, one company cannot do everything. So, if we want to get into a category where we do not have expertise, we are happy to sign venture agreements and strategic partnerships. Our aim is to expand our portfolio and become a total foods company. And that is what we are working towards. In the coming years, while we will continue to nurture our biscuit portfolio, our company will be known for offering a lot more products from different verticals.
Consumer food is an extremely difficult business in India. Food habits keep changing every 100 kilometres. How have you dealt with hyper local demands over the years?
Unlike the technology sector, in the food category, habits do not change suddenly. Nokia went belly up within a short span to be replaced by the Apples of the world. In food, that does not happen overnight. But yes, if you do not do the right things, over the years, you will go into hibernation.
Parle, which is our competitor, has been around for a fair amount of time. So, it is important to do the right things. The most important thing is nurturing the brands, getting the distribution to be strong, making sure that you constantly bring innovation to the table and ensuring that your business model is robust with profits.
What is your mantra for Britannia to conquer another 100 years in India?
We are looking at the future as far as food is concerned, and not just restricting ourselves to the here and now. We are anticipating what will be consumed in future. We are making quick decisions around it.
We are not getting bogged down by failures. There will be some categories where you will try, but not succeed. You cannot get bogged down by such outcome. You have to keep moving.
We are bringing all these ingredients to the table. And with this approach, being a nimble company, while being large, we are making sure that we expand our portfolio and focus on innovation. We always have a very strong team to back all of this to keep us alive not only for 100 years but many more 100 years.