Britannia Industries Limited Is One Leading Bakers Marketing Essay

Britannia Industries Limited is one of the taking participants in the bakeshop section in India. Its merchandise portfolio includes assorted types of biscuits, staff of lifes and bars. The company chiefly operates in India. It is headquartered in Kolkata, India and employed about 2,358 people as on March 2008.

The company recorded grosss of INR 26,177 million during the financial twelvemonth ended March 2008, an addition of 13 % over 2007. Top line of Britannia was driven by monetary value additions by manner of decrease in battalion sizes and extension of excise freedom to biscuits with maximal retail monetary value ( MRP ) below INR 100 per kg from INR 50 per kg earlier. The operating net income of the company was INR 2,723 million during financial twelvemonth 2008, an addition of 80 % compared with 2007. The PAT was INR 1,910 million in financial twelvemonth 2008, an addition of 77.5 % compared with 2007.

Business Description

Britannia Industries Limited ( Britannia ) is engaged in bring forthing and administering bakeshop merchandises including a assortment of biscuits, staff of lifes, zwiebacks, and bars. The Wadia group of India along with Groupe Danone of France, are equal stockholders in ABIL, the UK which is a major stockholder in Britannia. The company operates through three wide merchandise classs: biscuit and high protein nutrient, staff of life and zwieback, and bar.

The biscuit merchandises are marketed under the undermentioned trade names: Tiger, Good Day, 50 – 50, Marie Gold, Treat, Milk Bikis, Nutri Choice, Time Pass, Pure Magic, Little Hearts, Nice Time, Vita Marie Gold and Greetings. Bread merchandises are sold under the Premium Bakes, white sandwich staff of life trade name. Cake merchandises are sold under the Premium Bakes, Cakes and Rusks trade names. The company besides offers ‘Cup Cakes ‘ in its bars class.

Britannia ‘s dairy operations are conducted through its subordinate, Britannia New Zealand Foods Company Private Limited ( BNZF ) . BNZF is a joint venture between Britannia and Fonterra Co-operative Group of New Zealand.

The company exports its merchandises to the US, Ghana, Seychelles, Singapore, Oman, Saudi Arabia, United Arab Emirates, Qatar, Bahrain and Kuwait.

History

Britannia was established with an initial investing of INR295 in Kolkata in 1892. The operations of the company were mechanized with the coming of electricity in 1910. The company started utilizing gas ovens in 1921. Britannia Biscuit Company took over biscuit distribution from Parry ‘s in 1975. In 1978 the company became a publically listed company. In the undermentioned twelvemonth, the company was renamed as Britannia Industries Limited ( Britannia ) . The company ‘s executive office was relocated to Bangalore in 1989. In 1993 Wadia group acquired interest in ABIL, UK and became an equal spouse with Groupe Danone in Britannia. Britannia introduced its new corporate individuality ‘Eat Healthy, Think Better ‘ ; and launched Tiger Cashew Badam and Cheeker trade names of biscuits in 1997. In 1998, the company introduced Milk Bikis and Nutri Choice trade names ; and Etnic Snacking. In 1999, the company issued bonus portions in the ratio of 1:2. During the same twelvemonth, the company besides introduced cheeselets.

The company introduced biscuit trade names GD Choco, Time Pass and Vita Marie Gold in 2000 ; Rourbon Pocket Packs, Maska Chaska and Vita Marie Gold in 2001. Britannia introduced many trade names of biscuits in 2002 which include Time Pass Classic Salted, Jim Jam Pocket Packs, Chai Biskoot, Tiger Cream, GD Ginger Nut and Pure Magic. The company launched a joint venture with Fonterra, a dairy company ; and started Britannia New Zealand Foods in 2002. The company launched, Treat Duet, a biscuit trade name in 2003. In the undermentioned twelvemonth, Britannia ‘s Good Day biscuit added Choconut, a new assortment to its scope of biscuits. The metempsychosis of Tiger biscuit was seen in 2005, with the ticket line ‘Swasth Khao, Tiger Ban Jao ‘ . In the same twelvemonth Britannia launched Greetings scope of premium assorted gift battalions ; and Britannia 50-50 Pepper Chakkar. In the same twelvemonth, the company started its new works in Uttaranchal. In July 2006, Britannia acquired Cafe Coffee Day ‘s 50 % interest in Daily Bread, a Bangalore-based high-end nutrient retail merchant.

In March 2007, Britannia formed a joint venture with the Khimji Ramdas Group, one of the largest concern pudding stones in the Middle East. Britannia and its associates acquired 70 % good interest in Dubai-based Strategic Foods International and Oman-based Al Sallan Food Industries Co SAOG. In January 2008, Britannia was asked by the Calcutta High Court to pay back the INR12 crore, which it withdrew from the company ‘s pension fund.

Major PRODUCTS AND SERVICES

Britannia Industries Limited ( Britannia ) is a manufacturer and distributer of bakeshop and dairy merchandises. It manufactures, distributes and sells a scope of branded merchandises including:

List of merchandises:

Biscuits

Bread

Zwieback

Cakes

Cheese

Butter

Milk

List of selected trade names:

50:50

Deluca

Good Day

Small Heartss

Milk Bikis

MarieGold

Maska Chaska

NutriChoice

Pure Magic

Dainty

Tiger

Gross ANALYSIS

Britannia recorded grosss of INR 26,177 million during the financial twelvemonth ended March 2008, an addition of 13 % over 2007.

The company generates grosss through three concern divisions: biscuits and high protein nutrients ( 89 % of the entire grosss during financial twelvemonth 2008 ) , bread and zwieback ( 7.4 % ) , and bar ( 2.9 % ) .

Gross by division

During the financial twelvemonth 2007, the biscuits and high protein nutrient division recorded grosss of INR 23,299 million, an addition of 11.4 % over 2007.

The staff of life and zwieback division recorded grosss of INR 1,956 million in financial twelvemonth 2008, an addition of 36.3 % over 2007.

The bar division recorded grosss of INR 769 million in financial twelvemonth 2008, an addition of 23.2 % over 2007.

The others ( including bit gross revenues ) division recorded grosss of INR 144 million in financial twelvemonth 2008, a lessening of 28 % over 2007.

SWOT ANALYSIS

Britannia is a manufacturer and distributer of staff of life, bites and dairy merchandises. The company has a portfolio of top merchandising nutrient trade names. Britannia produces and distributes premium trade names such as 50:50, Good Day, Little Hearts, Milk Bikis, MarieGold, Maska Chaska, NutriChoice, Pure Magic, Treat, and Tiger. An extended portfolio of planetary trade names facilitates client callback and enhances Britannia ‘s market incursion capablenesss. However, an at hand judicial proceeding challenging the hallmark of Britannia ‘s biscuit trade name Tiger, with Danone, could adversely impact the company ‘s trade name image and its international enlargement programs.

Strengths

Failings

Strong trade name name

Launch of advanced merchandises and trade name extensions

Growth in operating sections

High dependance on Indian market

Fluctuating hard currency from operations

Opportunities

Menaces

Inorganic growing

Strategic confederations

Turning demand for wellness and convenience merchandises

Litigations

Inflationary dairy merchandise monetary values

Outbreak of animate being diseases

Strengths

Strong trade name name

The company has a strong portfolio of top merchandising nutrient trade names. Britannia produces and distributes premium trade names such as 50:50, Good Day, Little Hearts, Milk Bikis, MarieGold, Maska Chaska, NutriChoice, Pure Magic, Treat, and Tiger. Each of the company ‘s six pillar trade names ( Good Day, Tiger, 50:50, Treat, Milk Bikis, and Marie Gold ) generate gross revenues in surplus of INR1 billion. Further, the company is come ining new merchandise lines like noshing and wellness merchandises and therefore capturing a larger market portion. In 2007, most of the company ‘s trade names secured dual digit growing rate. Additionally, Britannia was ranked 2nd among FMCG companies in the ‘Business World ‘s Most Respected Company Survey 2006 ‘ . With a broad portfolio of trade names and pick of merchandise class, the company is able to distinguish itself in the market, nurture client trueness, and cut down its concern hazard. As a dairy merchandise company, Britannia enjoys strong trade name equity, and its extended portfolio of planetary trade names has helped it to spread out its market presence and visibleness. A strong trade name portfolio non merely facilitates client callback but besides enhances Britannia ‘s market incursion chances.

Launch of advanced merchandises and trade name extensions

The company has a strong orientation towards merchandise invention. In 2007, the company demonstrated its ability to introduce and widen its trade names and merchandises. Britannia launched many advanced merchandises in 2007. Through an advanced merchandise batting order, the company plans to beef up and sharpen its trade names and transform them from bing formats and conventional originals. In this context, the company launched pick and coconut assortments in its Tiger trade name scope. Further, the ‘Chota Tiger ‘ , which is an extension of Tiger trade name, draws on the childs noshing wont showing biscuits as ‘small, pop-able, bites ‘ in a pouch battalion. Similarly, the company besides launched added Fruit Rollz under its Treat trade name. Further, the company launched ’50:50 Chutkule ‘ and ‘NutriChoice Digestive and SugarOut ‘ . NutriChoice SugarOut is the first biscuit without added sugar, in the Indian market. Strong merchandise invention accomplishments enable the company to remain in front of the competition and make an border in the market.

Growth in operating sections

Britannia ‘s operating sections has shown strong fiscal public presentation since 2005, which is apparent from its gross growing. Biscuit and high protein nutrient section gross increased from INR14,926.9 million ( about $ 330.8 million ) in 2005 to INR20,910.8 million ( about $ 463.4 million ) in 2007, this stand foring compounded one-year growing rate CAGR ( 2005-2007 ) of 18 % . The staff of life and zwieback section besides recorded addition in gross from INR788.2 million ( about $ 17.5 million ) in 2005 to INR1,435.7 million ( about $ 31.8 million ) in 2007, this stand foring CAGR ( 2005-2007 ) growing of 35 % . Further, the bar section besides recorded addition in gross from INR355.7 million ( about $ 7.9 million ) in 2005 to INR624 million ( about $ 13.8 million ) in 2007, this stand foring CAGR ( 2005-2007 ) growing of 35 % . Strong public presentation by the company ‘s operating section enhances its fiscal standing and strengthens its place against its rivals.

Failings

High dependance on Indian market

Though Britannia has made raids into other international markets, it is still dependent on the Indian market for a bulk of its grosss. Though the company exports its merchandises to many states, the gross part of parts other than India is excessively low to confabulate any important geographical variegation benefit on the company. High dependance on India makes Britannia vulnerable to the market conditions in this part.

Fluctuating hard currency from operations

The company has non been able to bring forth consistent hard currency from its operations in recent times. The company has registered fluctuations in its hard currency from operations, registering a diminution in every surrogate twelvemonth since 2004. Cash from operations decreased from INR1,961 million ( about

$ 43 million ) in 2005 to INR649 million ( about $ 14 million ) in 2006. Again in 2007, it increased to INR871 million ( about $ 19 million ) . Fluctuating hard currency from operation could upset the company ‘s enlargement programs.

Opportunities

Inorganic growing

Britannia is sharply prosecuting inorganic growing theoretical account. In March 2007, Britannia concluded two acquisitions, including its first of all time overseas partnership. In March 2007, Britannia formed a joint venture with the Khimji Ramdas Group, one of the largest concern pudding stones in the Middle East. Britannia and its associates acquired 70 % good interest in Dubai-based Strategic Foods International LLC and Oman-based Al Sallan Food Industries Co SAOG. The two companies are major regional participants in the biscuits and cookies sections in the Gulf Corporation Council ( GCC ) markets. Both the companies export to more than 40 states across the Earth including Africa, Australia and Japan, thereby giving Britannia entree to many new markets. These two acquisitions are expected to let Britannia ‘s portfolio to widen to those states in which they have a presence. The joint venture could supply Britannia an chance to turn its international footmark by leveraging on the complementary strengths of the two spouses.

Strategic confederations

Britannia entered into strategic confederation with Daily Bread Pvt. Ltd. ( Daily Bread ) to take part in premium staff of life and allied merchandises market in India. In July 2006, Britannia acquired a strategic 50 % interest in Daily Bread, a Bangalore-based company engaged in the fabrication and retailing of premium staff of lifes, bars, and ready-to-eat bites. Daily Bread operates in both institutional and retail sections, and offers a broad scope of international quality bakeshop merchandises, including 50 assortments of forte staff of lifes. Post-acquisition, Britannia holds the trade name Deluca in India. Daily Bread ‘s concern theoretical account includes a concatenation of ain and franchised retail mercantile establishments, and providing to institutional clients. Daily Bread operates seven mercantile establishments in Bangalore and since its acquisition by Britannia ; two big mercantile establishments have been added. Britannia is acute to scale up the mercantile establishment concatenation to 30-40 metropoliss get downing Fiscal 2008. This acquisition marks Britannia ‘s entry in the high-end, newly baked epicure nutrient. This confederation will assist Britannia to scale up the bakeshop concern in select markets with a scope of epicure merchandises sold under its trade name names.

Turning demand for wellness and convenience merchandises

Consumers worldwide have become more wellness witting in recent old ages. Increasing figure of consumers are choosing for natural, nonfat and healthy nutrient merchandises. Food points incorporating trans-fat are losing market portion as they are linked to cardiovascular diseases. The primary drivers for this tendency are altering life styles, late matrimonies, addition in single-parent families, addition in figure of places with two working parents, and increased working hours. Consumer outgo on away-from-home dining is lifting. Harmonizing to the US Economic Research Service, passing on food-away-from-home is expected to increase by about 10 % per capita until 2025. The tendency towards low fat, low sugar and low saccharide nutrients and drinks continues to drive the market. Britannia offers a scope of low-fat and sugar free merchandises. With a strong accent on healthy nutrients, the company is likely to profit from the increasing wellness nutrient market. The planetary nutritionary market exhibited strong growing in 2006, estimated at E127 billion ( $ 159 billion ) , with half of this represented by the US market. The company is good positioned to work its focal point on wellness and convenience platform to drive its future growing.

Menaces

Litigations

Britannia and Groupe Danone ( Danone ) , a Gallic dairy and drinks giant, are engaged in rational belongings rights conflict, since many old ages. Wadia group and Danone have an equal interest in Associated Biscuits International Holdings ( ABIH ) , which is a major stockholder in Britannia. Both the companies are challenging over the hallmark of Britannia ‘s biscuit trade name, Tiger. Britannia has accused Danone of registering the Tiger Trademark globally without its consent. Danone has already registered Tiger trade name in about 35 states and has applied for enrollment of the Tiger hallmark in over 70 states.

In 2006, Britannia sued Danone in a Singapore tribunal, seeking a speedy redressal of the Tiger trade name issue. Danone has already registered Tiger hallmark in Singapore, which will run out in November 2009. Britannia submitted its hallmark application for Tiger in Singapore merely in April 2007, which is still pending. An arbitration instance between the two parties is besides pending at the Bombay High Court. This long at hand judicial proceeding ( with Danone ) could adversely impact Britannia ‘s trade name equity and its international enlargement programs.

Inflationary dairy merchandise monetary values

Britannia, being a diary company, is exposed to general concern hazards faced by the planetary dairy market. Britannia is vulnerable to monetary value fluctuations in the universe market for natural stuffs such as flour, soybean, corn and grain. In 2007, the industry witnessed an inordinate and coincident addition of about 20 % – 25 % in the market monetary values of all cardinal trade goods like flour, refined palm oil, skimmed milk pulverization, etc. The company ‘s top line growing of 28.4 % was eroded by rising prices in input costs, ensuing in a gross border diminution of 6.7 % .The planetary dairy market is marked by crisp fluctuations in the monetary value of dairy merchandises. Furthermore, gross revenues monetary values are fixed with clients for comparatively long periods in a figure of markets, whereas the purchase monetary values of milk are capable to short-run fluctuations. In order to restrict these hazards, Britannia should seek to minimise its operating costs by expeditiously using bing resources. Further addition in input cost could stifle the company ‘s gross border, which could ensue in worsening top-line growing.

Outbreak of animate being diseases

Britannia, as a diary merchandise company, is dependent on changeless supply and quality of the natural stuffs like milk. Any eruption of animate being diseases ( particularly Foot and Mouth Disease caused by a virus which is one of the most contagious and feared diseases ) , can do heavy loss in susceptible cloven-footed animate beings universe over. Britannia, which markets all dairy-based merchandises like butter, cheese, and biscuits to different states, may acquire affected by milk supplies and the production and sale of dairy merchandises in instance of diseases outbreak therefore impacting its grosss.

Top COMPETITORS

The undermentioned companies are the major rivals of Britannia Industries Ltd.

Nestle India Ltd

ITC Corporation Ltd.

Parle Products Pvt. Ltd.