AAKIN DESAIARPAN SINHA

BARKHA GOYALDEBASMITA PATRA

BRITANNIA – The Turn Around Story

Company ProfileFounded in 1892

Wadia family holds the majority Stake of 50.96%

Major Business : Bakery (Biscuits breads Cakes Cookies) Dairy Products

Headquartered in Kolkata and Chennai

Sales of Rs 3142 crores (March 2009)

Profit of Rs 180.40 crores (March 2009)

Gross Sales

Britannia Industries Ltd.Biscuit market : Rs. 8500 cr.

Market share : 38%CAGR : 20-22%

Cake market : Rs. 1100 cr.CAGR : 15-18%

Product Portfolio92% : Biscuit4% : Breads4% : rusks and cakes

Vinita Bali -Profile

Completed her Bachelor's Degree in Economics from LSR at the University of Delhi and

Completed her MBA at the Jamnalal Bajaj Institute of Management Studies

Pursued postgraduate studies in Business and Economics at Michigan State University

Started her career with Voltas Ltd.-a Tata Group company focusing on consumer products, where she launched Rasna soft-drink concentrate

Contd……In 1980, Vinita joined Cadbury India.

Coca-Cola Company chose her as its worldwide Marketing Director in 1994

Vinita joined her mentor at Coke, Sergio Zyman at the Zyman Group in July 2003 as a Managing Principal and Head of the Business Strategyinita

Joined as Chief Executive Officer of the Company in January 2005

Appointed Managing Director on 31st May 2006.

Problems before 2007Fall in market share from 47% in2003 to 31.6% in

2006

Competition from Parle, Priya-gold and ITCPricing AdvertisingQuality

No major product launch, except Tiger Brand in 2005

No growth in Dairy even after 7 years

Problems before 2007

Rising revenues, yet falling market share

Lack of long-term strategy and aggression

Low employee morale

Acquisition threat

Low margins in dairy products

Lack of control over distribution channel

Corporate Strategy

Operational strategies

Increase in operational capacity by 60%

Reduce baking time

ISO 9001-2000 and HACCP certification

KPMG, appointed to enhance the supply chain

Re-usage of waste heat of the ovens

Investment in high-speed packing machinesFrom 80-140 packets per minute

Operational strategies (Contd)

Standardization of processes and procedure to meet product consistency

Investment in tax free region of Rudrapur in Uttaranchal

Investment in energy conservationUsage of alternate cheaper fuelsUsage of recovery technologyImprovement in throughput rateReduction in electricity consumption through spot cooling

systemDevelopment of in-house expertise

Product Strategies

Tapping into new occasional segmentsRemove the trans-fat from its biscuitsFortification of biscuits with micro-nutrientsMulti-grain biscuitsBreads fortified with minerals and vitamins

Product Strategies (Contd)Dairy products

Concentration on cheese, which has 37% sharePowdered Milk

Biscuits 7 power brands in 2009Change in packaging (Rs. 2,5)Five assortments of biscuits and cakes (gifting)Concentration on marie, treat and gooddayPrice kept same, quantity reduced

Marketing strategies

Leveraging on three growth vectors of Brand, Geography ,Channel.

Aggressive advertising

Created different SKUs

Investment in infrastructure to expand distribution

Brands as profit centers, rather geographies

Indian Bakery Scenario

Breads50%Biscuits

34%

Other bakery product

16%

Indian Bakery Market

Biscuit Competition

40%

30%

9%

12%

9%

Market Share

BritanniaParle ITC LtdSurya Biscuits (Priya)Regional

Bread Competitors

Modern44%

Britannia36%

Local players20%

Bread Market

Dairy Competitors75 % to 80 % of this sector is unorganised

In the meager organized sector major players are:1. Amul2. Mother diary3. Various Regional Players

In the powdered milk segment major players are1. Amuliya2. Everyday

Other FunctionsAdministration

Investment in Information technologyPerformance driven culture

Financial -Commodity futures and hedging

strategiesResearch & Development

Product innovation and development

Impact of the strategies

Impact of energy conservationElectricity consumption, reduced by 23.3%Fuel consumption reduced by 6.3%

R & DNew productsCost reduction through better processesImplementation of alternate fatsStandardization of processes and procedure

to meet product consistency

Future Strategies

Water Segment

Range of finger licking products under treat brand

To enter in the growing markets through acquisition and collaboration

Can enter into breakfast items, ready to cook and ready to eat.