Britannia plans higher e-commerce investment, flags regional competition across markets

New Delhi: Britannia Industries plans to increase investments in e-commerce and step up efforts to address competition from regional players across product categories such as biscuits, rusk, cakes, croissants and wafers, according to comments made by its managing director and chief executive officer Rakshit Hargave during an investors’ call.

Hargave said the company would commit additional funds to strengthen its position in key categories while responding to local competitors that have strong influence in specific regions.

“We are going to be fighting regional competition; we are going to be investing in e-commerce, yes, that will require more funds. We are committed to invest that. We believe that the opportunity for us to drive topline better is definitely there,” he said.

He noted that expanding revenue was important for widening the company’s consumer base across its portfolio and said the business would take a pragmatic approach to balancing growth ambitions with available resources.

Britannia, which owns brands such as Good Day, Tiger, NutriChoice and MarieGold, does not view regional competitors as national-scale rivals but as smaller, enterprising businesses operating in specific pockets.

“So we will have a startup mentality to fight these people. We will make sure that the ambition that we have are more than the resources that we put. And we actually deliver it better. So, we will manage the expectations accordingly,” Hargave said.

He added that earlier margin pressures linked to inflation and delayed price increases had begun to ease as commodity prices stabilised.

“Now, with the commodity prices stable, you see that expansion of margins,” he said.
Hargave said wheat prices in the coming months would remain an important factor, while sugar, cocoa, laminates and milk costs were currently relatively stable.

“Laminate price is also very stable, and milk price is also slightly stable. How milk behaves going ahead in the future is what we have to see,” he added.

The company is also open to inorganic opportunities as it looks to build out its portfolio.
“Everything cannot be built from organic. So that door is also open for us,” Hargave said.

He acknowledged that consumption trends have stabilised but said regional competition remained a challenge across multiple clusters, including eastern markets.

“East is a hotbed of competition, but regional competition exists in other clusters also,” he said.

Chief commercial officer Vipin Kataria, who also participated in the call, said regional players often benefit from strong understanding of local tastes and formats.

“To counter them, we are building and increasing our investment in the brand,” Kataria said. He added that the company is working to respond more quickly to local flavour and format innovations.

Britannia’s game right now is to make sure that “we quickly adopt and adapt the manner in which these regional players are developing these flavours and formats and very quickly hit them in certain pockets of the market where we are getting a pushback.”