Britannia plans rural markets to contribute half of domestic sales in 3-4 years

New Delhi: Britannia Industries expects rural markets to account for half of its domestic sales within the next three to four years, as the company expands its distribution network to increase its presence in smaller towns and villages, said Vice Chairman and Managing Director Varun Berry.

The rural market is “very important” for Britannia, where the maker of Good Day, Marie Gold, and Tiger biscuits reported double-digit growth in the April-June quarter. Berry added that the company is working to maintain a “continuous stream” of products in remote areas.

“Our split between urban and rural was something like 75% and 25%. Now, we have gotten to a 60-40 split. It is still in favour of urban, but slowly, steadily, we have grown the rural markets much faster than the urban markets, and this will continue,” Berry told PTI.

He noted that the company ideally wants to reach “close to a 50-50 split” due to the potential for consumption and distribution in rural regions. “Maybe 3 to 4 years,” he said when asked about the time frame.

Berry observed that rural consumers now have similar aspirations to urban consumers. “They also want smartphones. They want to consume the best biscuits. Now, they might not consume it all the time, but these biscuits are still a part of their repertoire,” he said.

Britannia currently directly reaches about three million retail outlets across India and plans to expand this by roughly 100,000 outlets each year. Berry emphasised the need to reach even small villages with populations under 3,000 through the company’s own distribution network rather than relying on intermediaries.

On urban markets, Berry said consumption has been affected by rising real estate prices and higher rentals, which have tightened household budgets. He added, “These sweeping GST changes will give them some kind of relief, which will certainly help them in fulfilling whatever is the tightness in their pocket.”

Britannia reported “very high single-digit” growth in urban markets, supported by general trade, modern trade, and e-commerce. On competition between retail channels, Berry said there is a “conflict for sure” in urban areas, particularly in large cities. He noted that while hyper-local delivery apps are “a great platform” to make products available, Britannia remains primarily dependent on its own distribution network, which accounts for 96 per cent of its total revenue.