About Britannia Company

GENERAL INTRODUCTION

Industry Profile

The 3mn ton bakery products industry can be categorized as follows:

·         Bread

·         Biscuits

·         Cake

Only 40% of the bakery industry is in the organized sector, while the balance 60% constitutes unorganized / small-scale local manufacturers. There are over 2mn manufacturing units in the unorganized segment.

Unorganized sector manufactures several types of bread and organized sector primarily manufactures western type of breath biscuits have been a popular snake for a long time and there is a large variety available even today. By contrast, cakes are not popular in India and a limited range is available in the local market.

Segmentation:

Biscuits can be segmented broadly in to popular and special segments. Popular biscuits can further be segmented as glucose, milk biscuits, Marie, arrowroot. Glucose biscuits are the largest selling biscuits accounting for about 35% of the total biscuit market specialty biscuits can be segmented as cream, wafer cream, salt cracker. Cookies, assorted/others.

Industry structure:

In 1977-78, the government reserved the bread and biscuit manufacturing for small scale and restricted entry of large producers. During the last two decades, small and unorganized players shared the growth in the industry. Currently there are an estimated two million bakeries across the other products. Abid Hussain committee recommended dereservation of the sector, as the unorganized sector has not been able to maintain quality and hygiene standards, for want of capital and technology. The government in the 1996-97 budgets implemented the recommendation and the sector was de-reserved. The major problem this industry has been facing is the availability of cheap and quality raw material, wheat flour, supply of wheat flour is canalized through a government body state-trading corporation.

Market size and growth

As per the estimate made by the ministry of food processing industries(1998), the total market of bread and biscuit is estimated at 1.5mn ton and 1.1mn ton respectively. The cake market is estimated at 0.4mn ton. The organized segment of the biscuit market is estimated to be 0.44mn tons whereas the unorganized sector accounts for the balance 0.66mn tons. Over 80% of bread is manufactured by the unorganized sector. In terms of value, bread market is estimated at Rs 16bn (MRP Rs 21bn) whereas biscuit market is valued at Rs40bn (MRP Rs60bn).

The biscuit market in the recent years has witnessed a little higher growth at around 8-10% pa. with in the biscuit category, cream and specialty biscuits are growing at faster pace at 20% pa, while the popular segment is growing at 6-7% pa. The glucose segment recorded higher growth in 1998, driven by strong growth in Britannia’s tiger brand.

Major players and market shares:

In the overall biscuit market, Britannia and Parle are two major players with 15% and 10% market shares respectively. In the organized biscuit market, Britannia has close to 40% market share while parle has around 30% share. Brakeman’s has a market share of 10% mainly with a larger share of the cream biscuit segment. SmithKline consumer has close to 8% market share with its horlicks and boost brands. Other players like nutrient (now acquired by Sara lee), kwality etc have about 3-4% market shares each. Kwality biscuits pvt ltd, a Gulbarga based company has been expanding its presence to the county.

The glucose segment accounts for 35 percent of the overall biscuit market. Parle’s Parle-g is the leader in the glucose segment, wherein it has an estimated 55% market share. Britannia relaunched its glucose-d and circus brands of glucose biscuits under the tiger brand. With attractive packaging, low pricing, and heavy advertising, Britannia has achieved tremendous success with tiger brand. The brand has an estimated annual sale of close to Rs1.5bn and has garnered 20-25% market share in the glucose biscuit segment. Britannia hopes to make tiger the number one brand in the glucose segment by 2001. Rural market accounts for majority of tiger sales.

Salty biscuits ( parle’s Monaco and Britannia’s snax ) and sweet-salty biscuits (parle’s krackjack and Britannia’s 50-50) are the other two most popular segments in the biscuit market. Other parle brand in the popular segment is super milk. However, parle has been unable to establish its presence in the premium segment. It has recently launched hide and seek, chocolate chips biscuits, which will compete with Britannia’s bourbon. Britannia’s other main brands are Marie, nice, milkbikies, Tiger, pure magic, little hearts.

Other small scale producers are ampro food products, lucky biscuit company, champion biscuits, crown bakery, dalmia biscuit pvt ltd, dey bakery, Indian food pvt ltd, JB mangharam & co, etc. doctor biscuits pvt ltd, a kerala based company has created a niche segment of herbal biscuits containing herbs with medicinal properties which are beneficial for the body.

After setting up a base in the south, the company is currently expanding its market to cover Maharashtra. Utter Pradesh Bihar and Orissa. Doctor biscuits pvt ltd has a network of 425 distributors and 75 stockiest and has an annual turnover of Rs 360m.

Entry of global players:

In the past, several major MNCs like Cadbury, Brooke bond and nestle tried to enter into the biscuit segment but were not successful. These players found it difficult to compete with the unorganized players in the lower/popular segment of the market. In the upper end of the market, market size is small and there are established players with strong brand equities and a well-entrenched distribution network. Ultimately, they pulled out of the product category. With the decontrol of the sector, several large global players have entered the category and more players are expected to set up shop in the county over the next few years.

The leading global players who have entered the biscuit segment are:

Nestle:

Nestle is the largest producer of the biscuits in the world. In India some international of Israel had set up a joint venture with dabur for the manufacture of bakery products. The joint venture, named excelsia foods, currently markets the creamwich brand of cookies with the global acquisition of the some group, nestle acquired 40% stake in excelsia foods.

Nestle has increased its stake in execelsia to 60% by acquiring an additional 20% equity from dabur a new biscuit brand kidz animal shaped biscuits in chocolate and plain flavors, has been launched. Targeted at children, the biscuits are positioned on the fun-platform and are packed in pouches.

United Biscuits:

United biscuits, the $3.25 billion britished-owned multinational food company, and the second largest biscuit manufacturer in the world, is launching its popular mcvitie’s digestive brand in india. It will also launch other brands like hob-nobs, bn pocket and ginger snaps.Mcvitie’s digestive is the largest selling brand in the UK the biscuits will be directly imported by the company and will be available in nearly 12000 retail shops in these major cities. The biscuits will be priced at a significant premium as import duty is high at 60%. UB has a market share of 19 percent in the European biscuit market. It also has significant operations in other countries such as China, Malaysia, Japan, Singapore, Russia and US.

Kellogg’s

Kellogg’s has also entered the segment with the launch of its digestive breakfast cereal biscuits.

Sara lee:

Sara lee, another leading global player has acquired the biscuit business of nutrient, a south based confectionery firm.

The market leader, Britannia has also in recent years revamped its corporate image and marketing strategy and introduced a number of new biscuit brands to cater to various segments (including the premium, snack and mass markets).

Britannia:

Britannia has been expanding its distribution reach and plans to double its network in the rural markets. Retail reach is expected to increase from the current 0.4mn outlets to 0.8mn retail outlets in the next two years. Its new logo incorporates the slogan” Eat Healthy, Think Better”, positioning the company’s products as a source for healthy food. This is an important strategy for promoting consumption of snack foods, which many families do not associate with nutrition platform, have been launched recently.

Over the long-term, the relative share of unorganized sector is expected to decline gradually. Existing players with strong brands and established distribution networks will continue to expand their market. New players will have the daunting task of setting up a distribution network besides adapting their products to meet the taste preferences of local consumers. The new entrants are likely to enter into distribution arrangements with established domestic food companies.

Company Profile

The story of one of India's favorite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company well known as Britannia today.

 The beginnings might have been humble-the dreams were anything but. By 1910, with the advent of electricity, Britannia mechanized its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. Britannia's business was flourishing. But, more importantly, Britannia was acquiring a reputation for quality and value. As a result, during the tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large quantities of "service biscuits" to the armed forces.

 As time moved on, the biscuit market continued to grow and Britannia grew along with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indian ness of the firm. The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs.100crore revenue mark.

On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the affinity consumer shad with 'Brand Britannia'.

Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognized for its innovative approach to products and marketing: the Lagan Match was voted India's most successful promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India's most successful product launch. In 2002, Britannia's New Business Division formed a joint venture with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World', and The Economic Time pegged Britannia India's 2^nd Most Trusted Brand.

 Today, more than a century after those tentative first steps, Britannia's fairy tale is not only going strong but blazing new standards, and that miniscule initial investment has grown by leaps and bounds to crores of rupees in wealth for Britannia's shareholders.

The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of almost one-third of India's one billion populations and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. And millions of consumers will savor the results, happily ever after.

Parent Group:

 Britannia’s controlling stake is jointly with Groupe Danone and Nulsi Wadia group.  Group Danone is one of the leading players in the world in bakery products business and acquired interest in Britannia industries in 1989 and acquired controlling stake in 1993.  Nulsi Wadia group is one of the leading industrial houses in the country with interests mainly in textiles and petro chemicals.

Plant Location:

All the Britannia factories are located at strategic location.  So as to ensure a constant output and easy distribution.  A large part of products are outsourced from third party producers mainly.  Dairy products including flavored milk are sourced from Dynamix diary located in Maharashtra, Mumbai, Delhi, And Calcutta and Chennai.

Earning Sensitive Factors:

BIL is the market leader in the biscuit and bakery products segment in the organized market.  Biscuit contribute to more than 80% of Britannia’s total turnover.  Other products include bread and cakes.

Its brand ‘Tiger’ has out-stripped all its competitors in the lower end of the market.  The strategy is to grow its share in the lower and through broad basing ‘Tiger’ and in the higher end through aggressive relaunches and introducing low units packs.  Britannia enjoys a prominent position in the industry.  Over the last couple of years, it has trimmed down its wide product portfolio and began to focus on value-added instead of low margin products.

It has made an entry into the ethnic food segment with branded salted snacks.  The company has introduced so for six to seven products in this segment in outskirts of Delhi, Calcutta and Chennai.

Largest Organized Player:

Today it is undoubtedly the largest player in the organized sector. With its strong holds in the biscuit and bakery products segment and dairy business segment. Biscuits contribute to more than 80% of Britannia’s turnover.  Other products include bread and cakes.  The company has also established a significant presence in the dairy business in the last couple of years.

BIL has consolidated its positioned in the dairy business as well as strengthened its leadership in the core bakery business.

Margins have been improving despite the fast pace of new product launching.  As sales stabilize, operating margin will witness a further improvement rationalization of manufacturing operations and greater contribution of higher margin dairy products has also yielded margin gains.  Breads volumes are recorded downtrend over few years.  The company has decided to strengthen its bread business in the southern states and the cake business recorded a volume growth over the years.

In the extremely price conscious biscuit market, consumption of premium biscuits is being induced by introducing smaller pack sizes and lowering price points.  Competition weak with Britannia’s biggest competitor Parle, Unable to make a mark anywhere apart from Glucose.  Bake man’s with 8% market share is in trouble and could also prove to be soft target in the future. Others like Priya Gold though strong remain regional players.

After a thrown over haul of the operational structure a revamp of its product portfolio and am ambitious foray into new areas.  Such as diary products and snack foods, the company has managed to turn in robust financial performance over past years.  The stock market has also taken notice in re-rating the stock, pushing up its price earnings. The stock now ranks among the preferred investment options within the universe of FMCG companies.

Competitive Position:

Britannia has maintained market leadership with a 40% volume of share and 48% value market share in the organized sector.

FMCG major HLL is expected to venture in the segment.  Britannia has been aggressive in new launches and marketing during the last 2 years anticipating the competition.

The Industry is dominated by a large number of players in the unorganized sector, which accounts for over 80% of the market.  Britannia industries and modern foods owned by HLL are the only two players with a national presence in packet slice bread segment.  There are several other regional players like Parle, ITC who have significant market shares in their respective areas.

Research and Development:

Britannia industries R & D team is involved in developing existing ones and improving production facilities packaging systems and process.  It continued in its efforts to improve and upgrade their production facilities. In this respect, the 12^th biscuit training programme was held in Delhi in Collaboration with federation of biscuit manufactures of India and U.S. wheat associates.

Quality Initiatives:

Quality of Britannia products remains one of there main areas of focus. This mindset is further strengthened through a quality assurance system complying with ISO 9002 in there factories.

Code of Conduct:

The reputation that Britannia has built over the years for high ethical standards is one of our greatest business assets. To share the responsibility to preserve and enhance this asset, the company has documented the Code of Business Conduct [COBC] for its employees. This handbook covers the Code in detail.

 The COBC outlines the principles, policies and laws that govern the activities of the company, and to which employees of Britannia and others who work with, or represent Britannia directly or indirectly, must adhere. The Code is distributed to all employees and directors and others associated with the business of the Company, and offers guidance for professional conduct under six main headings, which include the following key points:

1. Responsibilities of Employees of Britannia

·  Maintaining ethical standards, including appropriate accounting controls;

·  Identify, surface and resolve ethical issues with great speed;

·  Corporate assets (physical and intellectual) must not be used for personal benefit;

·  Exercise good judgment and standards of good taste when creating company records, including e-mail;

·  Maintain company records accurately and retain them in accordance with law.

2. Workplace Responsibilities

·  Being committed to fair employment practices;

·  Being committed to a workplace free from drugs and any kind of harassment or intimidation of employees;

·  Being committed to the safety of our employees;

·  Being committed to discipline at workplace;

·  Compliance with appropriate laws and internal regulations

3. Representing Britannia to Customers and Other External Constituencies

·  Treating customers, suppliers and competitors fairly;

·  Maintaining high standards of quality;

·  Speeches, media interviews, and other public appearances in connection with Britannia must first be approved internally;

·  Preparing accounts accurately and maintaining records;

·  Ensuring not to use unfair and misleading statements when marketing Britannia products and services;

·  Accepting and giving gifts is not permitted, except as governed by the policy laid down herein.

4. Privacy / Confidentiality

·  Protect proprietary and confidential information at all times in accordance with applicable law;

·  Keep customer information secure at all times, as a sacred trust given to the company by our customers;

·  Keep employees' information confidential.

5. Investments and Outside Activities

·  Trading in the securities of Britannia or any other company while in possession of "inside" information is illegal;

·  Avoiding real or perceived conflicts of interest in areas including investments or outside business activities, among others.

6. Corporate Social Responsibility

·  Catering to the national interest

·  Committed to be a good corporate citizen

·  The company prohibits any payment of bribes.

Financial Growth:

Britannia Industries Ltd. (BIL), one of India’s leading food Companies, reported sales of Rs. 6,588 MM for the quarter ended 30th September 2007, reflecting 20% growth over the corresponding quarter last year. Net Profit for the quarter at Rs. 485 MM was more than double for the corresponding quarter last year of Rs 212 MM.

 For the half year ended 30th September 07, revenue grew 19.6% to Rs. 12,356 MM, while net profit at Rs 846 MM was 64.6% higher than last year.

Major Mile Stones:

1892 ·   The Genesis - Britannia established with an investment of Rs. 295 in Kolkata  1910 ·   Advent of electricity sees operations mechanized  1921 ·   Imported machinery introduced; Britannia becomes the first company East of the Suez to use gas ovens  1939 ·   Sales rise exponentially to Rs.16,27,202 in 1939 ·   During 1944 sales ramp up by more than eight times to reach Rs.1.36 crore  1975 ·   Britannia Biscuit Company takes over biscuit distribution from Parry's  1978 ·   Public issue – Indian shareholding crosses 60%  1979 ·   Re-christened Britannia Industries Ltd. (BIL)  1983 ·   Sales cross Rs.100 crores  1989 ·   The Executive Office relocated to Gulbarga  1992 ·   BIL celebrates its Platinum Jubilee  1993 ·   Wadia Group acquires stake in ABIL, UK and becomes an equal partner with Groupe Danone in BIL  1994 ·   Volumes cross 1,00,000 tons of biscuits  1997 ·   Re-birth - new corporate identity 'Eat Healthy, Think Better' leads to new mission: 'Make every third Indian a Britannia consumer' BIL enters the dairy products market  1999 ·   "Britannia Khao World Cup Jao" - a major success! Profit up by 37%  2000 ·   Forbes Global Ranking - Britannia among Top 300 small companies  2001 ·   BIL ranked one of India's biggest brands ·   No.1 food brand of the country ·   Britannia Lagaan Match: India's most successful promotional activity of the year ·   Maska Chaska: India's most successful FMCG launch  2002 ·   BIL launches joint venture with Fonterra, the world's second largest dairy company ·   Britannia New Zealand Foods Pvt. Ltd. is born ·   Rated as 'One amongst the Top 200 Small Companies of the World' by Forbes Global ·   Economic Times ranks BIL India's 2nd Most Trusted Brand ·   Pure Magic -Winner of the Worldstar, Asiastar and Indiastar award for packaging  2003 ·   'Treat Duet'- most successful launch of the year ·   Britannia Khao World Cup Jao rocks the consumer lives yet again  2004 ·   Britannia accorded the status of being a 'Superbrand' ·   Volumes cross 3,00,000 tons of biscuits ·   Tiger adds a new variant - Choconut - in its range  2005 ·    Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the popular chant! ·    Britannia launched 'Greetings' range of premium assorted gift packs ·    The new plant in Uttaranchal, commissioned ahead of schedule. ·    The launch of yet another exciting snacking option - Britannia 50-50 Pepper

TIGER ·          Tiger orange cream ·          Tiger ·          Tiger rose milk cream ·          Tiger coconut ·          Tiger elaichi cream TIGER ·          Butter ·          Cashew ·          Pista Badam ·          Chocolate Chip ·          Choco nut MILK BIKIS ·          Cream ·          Delite ·          Fun land 50-50 ·          50-50 ·          50-50  Maska Chaska ·          50-50 pepper Chakar MARIE GOLD ·          Vita Marie Gold ·          Marie Gold Doubles ·          Nutrie Choic

·          Nutri choice Digestive ·          Good Morning ·          Isobogol ·          Junior Cream Treat ·          Burbon ·          Elachi ·          Jim-Jam ·          Mango ·          Orange ·          Pineapple ·          Butter & Honey SNAX ·          Snax ·          Time pass ·          Cheezlets ·            OTHERS ·          Chaco ·          Sesame ·          Orange ·          Pure Magic ·          Chocolate ·          Vanilla

Product Profile:

TIGER:

Britannia Tiger was launched in 1986 in two delectable avatars - Tiger Cashew and Butter. Over the years, new variants were introduced - Tiger Pista Badam in 1989, Tiger Choc chips in 2000 and Tiger Choconut in 2004.

This rich biscuit enjoys a fan following of consumers across all ages, loyal to the brand promise of a great taste evident from the visibly abundant ingredients. Tiger is amongst the fastest growing brands in Britannia's portfolio and is today the market leader with almost 2/3 share of the market. The brand is synonymous with everyday treats that infuse happiness into people's daily lives.

Staying true to the spirit of ‘Good Food for Good Times’, the latest innovation in Tiger’s portfolios, Tiger’s Jumbo’. Tiger Jumbo is 'extra big' with 'extra goodness' oozing out of it. Tiger Jumbo allows you to relish the magic of 4 dry fruits in a single cookie.

About The Product

Product Name          :    Tiger

Size                          :     100gm

Price                         :     11(cashew)

Ingredients        :   wheat flour, sugar, edible vegetable oils, butter, cashew-bits,            milk, & milk Products, leavening agents, salt, permitted emulsifiers, dough

Nutritional information per 100gm of product

Carbohydrates :     62gms

Proteins           :     8gms

Fat                   :    25gms

Energy             :    505k cal

Details of Britannia Industries Ltd., With Regard To Four P’s of Marketing Mix.

The Britannia industries limited, market their products i.e. full Britannia products under different brand names. All the products manufactured in the company will have the brand name printed because of the popularity of Britannia Company, it is easy for the dealers to market the products without much difficulty. It is also advantages on part of the consumers to purchase. Britannia

The company’s brand name is very popular because the name has got the monopoly over the marketing of bakery and dairy products manufactured by the company.

Packaging policy of the Britannia industry limited:-

Packaging is most important aspect for the company because of its products is durable. Therefore company gives much importance for packaging. Thus the packaging policy adopted by the company for bakery and dairy products is very good. Attractive package policy helps the company to boost up its sales.

Thus to product mix of the company comprises of various lines branding, packaging policy and many others

Pricing policy of Britannia industry limited:-

Price is very important element in marketing mix as realized by Britannia industries limited. Therefore the management of the company keeping in view of the following objectives carefully forms the pricing decisions or policies

1)     To maximize there profit

2)     To acquire good market positions

3)     To face their competitions

4)     To keep their price stable

The price of the various products of industries limited all done after a careful and through investigations of the cost of goods, the market position, the competitions, the rise in price etc

Promotion mix of Britannia industry limited:-

The products of the company are advertised through television, radio, journals and newspapers for improving its sales. Season wise they will give offers along with free gift. Along with new product an existing product will be given at free of cost for the existing product.

Distribution mix of Britannia industries limited:

The company recognizes distributors as an internal part of its management function. The management feels that it faces a number of initiate problems and dilensucas where distribution is concerned the goods have to be distributed at maximum possible cost. Yet a reasonable satisfactory level of service has to be maintained. Distribution level networks have to reach for and wide and close controls on distribution activities have to be constantly excised. The carriage and forwarding (c&f) agent will do all the distribution of products on receiving the order through the estimate form, from the distributor. The distribution will be done on behalf of the company up to the door of the distributor.