[ A Case Study On Britannia- The Brand
Guided by:- Submitted by: Dr. Avinandan Mukherjee Avishek Sen Gupta Gunjan Bihani Prosenjit Roy
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 2
A report on NDTV Profit on June 2009 states that the market share of Britannia for the first time
in the history has lost its market position, Parle is now number 1.Parle has gained the market
position based on a single product Parle G. It is no.1 both in terms of revenue and tonnage.
Recent data shows Parle passes Britannia in terms of market share. It has 32.94% market share
whereas Britannia‟s market share is around 32.88%.But just a year ago it was Britannia who
maintained the healthy lead (35.8%). ITC is the distance third. Parle claims launch of Parle 20-20
in 2008 which did the trick for them.
Consolidating with the distribution network and increased contract manufacturer partners also
TIGER brand of Britannia has stopped roaring in the market and has slipped its market share by
1.5% than last year. According to Mr. Neeraj Chandra, VP & COO of Britannia that although
Britannia has lost some share in their major brand TIGER and they are a small player in glucose
segment still they are confident that Britannia will not only regain back its market share but will
exceed by launching of a new superior product.
Britannia is loosing out its market share in the glucose segment of biscuit industry. What should
be Britannia‟s strategy in due course with its competitors so that it retains its position of market
leader in the biscuit industry also over the past Britannia has been loosing the position of the
most trusted brand from no. 1 position in the year 2002 to 9th position in recent years. (Source:
Some questions where Britannia needs to plan their strategy how they should go about doing the
Should Britannia reposition their brand in the lower segment in order to compete
How to capitalize in the low Market share?
How to overcome with the organic and inorganic growth strategies to face the
challenges in the Indian Biscuit Industry
Please find a link which discuss about the one of the case problem of Britannia Industries.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 3
Company Profile Britannia was incorporated in 1918 as Britannia Biscuits Co Ltd in Calcutta. In 1924, Pea Frean
UK acquired a controlling stake, which later passed on to the Associated Biscuits International
(ABI) a UK based company. During the ‟50s and‟ 60s, Britannia expanded operations to
Mumbai, Delhi and Chennai. Exports of sea foods started in the ‟70s. In 1987, Nabisco, a well
known European food company, acquired ABI. In 1989, J M Pillai, a Singapore based NRI
businessman along with the Groupe Danone acquired Asian operations of Nabisco and thus
acquired controlling stake in Britannia. Later, Groupe Danone and Nusli Wadia took over Pillai‟s
holdings. In 1977, the Government reserved the industry for small scale sector, which
constrained Britannia‟s growth. Britannia adopted a strategy of engaging contract packers (CP)
in the small scale sector. This led to several inefficiencies at the operating level. In April ‟97, the
Government de reserved the biscuit sector from small scale. Britannia has expanded captive
manufacturing facilities and has modernized and upgraded its facilities in the last five years. It
has also forayed into the Dairy Business with the launch of Cheese, Butter, Ghee, Dairy whitener
and flavored milk products.
Britannia Industries Limited (Britannia) is engaged in the provision of bakery products,
including biscuits, bread, rusk and cakes, and dairy products. The company primarily operates in
India. The company's products include 50-50, Good Day, Little Hearts, Marie Gold, Milk Bikis,
Nice Time, Nutri Choice, Pure Magic, Tiger, and Treat. It is headquartered in Kolkata, India and
employed about 1,982 people as on March 2009.
The company recorded revenues of `34212.3 million (approximately $746.5 million) during
fiscal year March 2009 (FY2009), an increase of 23.2% over FY2008. The operating profit of the
company was `1,782.4 million (approximately $38.9 million) during FY2009, a decrease of
15.4% compared with FY2008. The net profit was `1,514.8 million (approximately $33.1
million) in FY2009, a decrease of 14.6% compared with FY2008.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 4
Britannia, a wholly owned subsidiary of The Bombay Burmah Trading Corporation Limited, is a
Leading player in the Indian biscuits industry. The company is engaged in the manufacture and
distribution of food products primarily comprising of bakery products like biscuits, bread, cakes
and toast; and dairy products.
The company operates in the Indian and overseas market through its subsidiaries, joint ventures
and associates. The company‟s operations in the country is managed by International Bakery
Products Limited, TC Balam, Tamil Nadu; J B Mangharam Foods Private Limited, Gwalior,
Madhya Pradesh; Manna Foods Private Limited, Bangalore, Karnataka; Ganges Vally Foods
Private Limited, Kolkata, West Bengal; and Sunrise Biscuit Company Private Limited,
Guwahati, Assam.. The company markets its biscuit products in India under the brand names of
Tiger, Good Day, 50 - 50, Marie Gold, Treat, Milk Bikis, Nutri Choice, Time Pass, Pure Magic,
Little Hearts, Nice Time, Bourbon and Greetings. Bread products are sold under the Premium
Bakes, white sandwich bread brand. Cake products are sold under the Premium Bakes, Cakes
and Rusks brands. The company also offers 'Cup Cakes' in its cakes category. Britannia New
Zealand Foods Private Limited (BNZF), the joint venture of Britannia with Fonterra Cooperative
Group Limited of New Zealand, markets and sells dairy products comprising cheese, dairy
whitener, curd, butter and clarified butter. These products are sold under the Britannia Milkman
brand. Daily Bread Gourmet Foods Private Limited (Daily Bread), a wholly owned subsidiary of
the company, is engaged in the business of premium bakery products under the brand name
Daily Bread. The subsidiary manufactures and retails a range of breads including French bread,
Italian breads, Italian white breads, Italian sandwiches, rolls, multi-grains, pastries, bagels and a
range of ultra premium health breads. In addition to this, Daily Bread also offers doughnuts,
cheesecakes, mousse cakes, fruit cakes, fruit tarts, pastries, brownies, cookies and Belgian
pralines and truffles. Deluca, a division of Daily Bread, offers a wide range of gelato, sorbet,
gelato cakes, sundaes, and desserts. Besides, the subsidiary operates Daily Brew espresso bars
serving a variety of coffee, tea and light snacks. Strategic Food International Co. LLC (SFIC), a
70% subsidiary of Britannia, operates in the Middle East. The subsidiary offers a wide range of
biscuits and wafers under the brand name Nutro. Al Sallan Food Industries Company (Al Sallan),
a 64.5% subsidiary of the company, also operates in the Middle East. The subsidiary offers a
range of cookies, rolls and chocolates under the brand Name Baker‟s Pride. In addition to this,
Britannia is also a kea player in the Sri Lankan biscuits market offering products like Milk Bikis,
Milk Cream Smileys, Vita Marie Gold, Creams and Cookies. Besides, the company exports its
products to the US, Ghana, Seychelles, Singapore, Oman, Saudi Arabia, United Arab Emirates,
Qatar, Bahrain and Kuwait.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 5
The food Industry
The following information on the Biscuit Industry in India is provided by the Federation
of Biscuit Manufacturers of India
Biscuit industry in India in the organized sector produces around 60% of the total production,
the balance 40% being contributed by the unorganized bakeries. The industry consists of two
large scale manufacturers, around 50 medium scale brands and small scale units ranging up to
2500 units in the country, as at 2000-01. The unorganized sector is estimated to have
approximately 30,000 small & tiny bakeries across the country.
The annual turnover of the organized sector of the biscuit manufacturers (as at 2001-02) is Rs.
In terms of volume biscuit production by the organized segment in 2001-02 is estimated at 1.30
million tonnes. The major Brands of biscuits are - Brittania, Parle Bakeman, Priya
Gold,Elite,Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various regional/State
Biscuit industry which was till then reserved in the SSI Sector, was unreserved in 1997-98, in
accordance with the Govt Policy, based on the recommendations of the Abid Hussain
The annual production of biscuit in the organized sector, continues to be predominantly in the
small and medium sale sector before and after de-reservation. The annual production was around
7.4 Lakh tonnes in 1997-98 In the next five years, biscuit production witnessed an annual growth
of 10% to 12%, up to 1999-00.
The annual Growth showed a decline of 3.5% in 2000-01, mainly due to 100% hike in Central
Excise Duty (from 9% to 16%). Production in the year 2001-02 increased very marginally by
2.75% where in 2002-03 the growth is around 3%.
The Union Budget for 2003-04 granted 50% reduction in the rate of Excise Duty on Biscuit i.e.
from 16% to 8%. The Federation's estimate for the current year indicates a growth of
approximately 8% to 9%.
However the average utilization of installed capacity by biscuit manufacturers in the country has
been a dismal 60% over the last decade up to 2001-02.
Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogs SmithKline Beecham,
Heinz etc entering the biscuit industry in India, most of them, with the exception of SmithKline
Beecham (Horlicks Biscuits), have ceased production in the country.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 6
On the other hand, import of biscuits, specially in the high price segment has started from 1998-
99, but however, the quantum of imports has not so far increased alarmingly and has remained at
around 3.75% of the consumption of biscuits in the country in the year 2001-02. However, recent
imports from china industries cheaper verities of biscuit, needs to be examined with cautions,
especially in the context of the price as the low margin based domestic industry, which is
operating at 60 % of the total installed capital. Exports of biscuits from India has been to the
extent of 5.5% of the total production. Export are expected to grow only in the year 2003-04 and
Biscuit is a hygienically packaged nutritious snack food available at very competitive prices,
volumes and different tastes. According to the NCAER Study, biscuit is predominantly
consumed by people from the lower strata of society, particularly children in both rural and
urban areas with an average monthly income of Rs. 750.00.
Biscuit can he broadly categorized into the following segments:
(Based on productions of 2000-01)
In recognition of industry's obligations towards the community, being a part of it, biscuit
manufacturers supply biscuits to the social welfare agencies in all States for the benefit of school
children, senior citizens and other needy sections of the society. FBMI Members have always
responded positively to our appeal as also by the Government, to rush truck loads of biscuits to
the people affected by earthquakes, floods, famine etc. Our industry has also participated in
supplying biscuits to the people of war ravaged Afghanistan and presently to the Iraqi people,
under the aegis of the UN.
As regards the consumption pattern is concerned. surveys and estimates by industry from time to
time indicate the average consumption scenario in the four Zones have been more or less close to
each other, as below:
Northern States: 28%
Southern States: 24%
Western States: 25%
Eastern States: 23%
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 7
Though India is considered as the third largest producer of Biscuits after USA and China, the per
capita consumption of biscuits in our country is only 2.1 Kg., compared to more than 10 kg in
the USA, UK and West European countries and above 4.25 kg in south cast Asian countries, Le.
Singapore, Hong Kong, Thailand, Indonesia etc. China has a per capita consumption of 1.90 kg,
while in the case of Japan it is estimated at 7.5 kg.
In view of the meager per capita consumption even as penetration of biscuits manufactured by
the organised sector, into rural areas in India, has been very good during the last 10 years, as also
in the metro and other cities, small towns etc. However, in spite of this, the industry has not been
able to utilize about half of their installed capacities.
Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass Consumption
Goods ) sector. The commodity is also price sensitive, as a consequence of which, even when the
Excise Duty was doubled on biscuits in 2000-01 biscuit manufacturers, including the major
brands, were not able hike MRPs to the extend of the steep increase in the Duty. Taxation, both
Central Excise Duty as also State Sales Tax, other miscellaneous levies i.e. turnover tax, local
area tax, mandi taxes, purchase tax, octroi etc etc, has been a major deterrent in the growth of the
biscuit industry. The CII Study Report has identified Biscuit as one of the products that should
treated as "Merit Good for the purpose of liberal tax policy both by the Centre and States.
Besides lack of technology up gradation in manufacturing, packaging etc has also been a factor
affecting our industry, along with inadequate financial credit and support particularly for the
medium and small scale biscuit units.
On the other hand, the Government of India has identified food processing industries as a priority
area to be encouraged for growth and development and created the Ministry of Food Processing
Industries (which was till then a Dept in the Ministry of Agriculture), headed by an Ministry of
State with Independent charge.
The Food Processing Ministry has been rendering yeomen service to the industry, of which
biscuit manufacturing is an important part. The Ministry, with the objective of enabling food
processing Industries to undertake technology upgradation diversification. expansion as also to
set up new units has formulated scheme of Grants and Financial
Other areas of concern to industries of food products like Biscuits include multiplicity of food
laws and their enforcing agencies in the Central and State Governments with overlapping
functions & implementation. At the persistent instance of industry organizations including FBMI
the Ministry of FPI took the initiative in evolving an Integrated Food Act, harmonizing the
existing multifarious legislations enabling better compliance. The Draft Unifled Food Bill 2002
has been prepared and now awaits approval by the Cabinet and the Parliament, which will fulfill
an important need of the industry and pave way for accelerated development and growth.
Biscuit manufacturing as well as other bakery products like Bread etc are agro based industries,
with the major inputs - wheat flour/atta sugar, milk vanaspati/vegetable oil etc all being
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 8
Industries such as Biscuit are also languishing as they are not able to achieve their potentials for
higher production, in the absence of the concrete food Processing Industry Policy. FBMI in close
coordination with other organizations and apex Chambers, initiated to urge the Govt of India to
formulate a comprehensive Policy Document, for smooth growth and harmonious development
of the industry. The Food Processing Industry Policy, which has been evolved as a result of
various workshops, deliberations and representations by a large cross section of food processing
industries, is yet to be finalized. It is hoped that the Ministry of Food Processing Industries, GOI
would initiate action for implementation of the Policy expeditiously.
According to the production figures of member‟s available upto the calendar year 2003, the total
production was 625000 tonnes as against 475000 tonnes in the previous year. The production of
biscuit for the last 11 years is as under:
1993 - 167750 1994 - 180526
1995 - 202567 1996 - 222371
1997 - 362000 1998 - 400000
1999 - 425000 2000 - 450000
2001 - 465000 2002 - 475000
2003 – 625000
Note: the production of members of FBMI consist of 50% (approx) of the total production of
biscuit in the organized sector.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 9
MAJOR PRODUCTS AND Brands
Britannia is a producer and distributor of bakery and dairy products. It manufactures, distributes
and sells a range of branded products including:
As it has been shown in the figure ,the process of operation of distribution occurs in this way in Britannia
Industries. After the Biscuits are manufactured and packaging are done in the production center they
are supplied to the depot. There is only one depot in the whole city. From the depot they are being
distributed to various authorized Wholesalers. From the Authorized wholesalers ,distributors collect the
products according to their need and they supply it to the retailers according to the order placed by the
retailers. The distributors have a major role to play in the sales. Their job is to increase the sales.
Distributors supply the products to the retailers doorsteps and collect the payment. Distributors job is to
introduce news product to the retailers for sale and try to capture more shelf and air space in the retail
Depots Authorized Wholesalers’
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 10
To dominate the food and beverage market in India through a profitable range of “Tasty
Yet Healthy” products by making every Indian a Britannia consumer.
To dominate the food and beverage market in India with a distinctive range of “Tasty Yet
Healthy” Britannia brands.
There are two types of trading in Britannia Industries Limited
1. General Trading and
2. Alternate Channel for Development Trading.
General Trading includes retails shops, stores, sales service outlet like Big bazaar, Spencers etc
from where people can buy Britannia products.
NON WELFARE ACCOUNT
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 11
Alternate Channel for Development Trading includes all trading which are done outside
general market. Selling of Britannia products in schools & colleges, hospital, hotels, office
canteens/café, railway stations, airports etc comes under ACD.
Alternate Channel development includes two types of selling categories such as
1.Welfare Account &
2. Non Welfare Account or MRP selling in an organization.
Welfare Account in any organization is such that where organization doesn‟t charge anything
when they provide cake, biscuits to their employees.
MRP selling category includes Selling of biscuits, cakes, cookies at different institutions like
hospital canteens, hotels, office canteens, school & college canteens, bus depots etc.
Here in these institutions Britannia products are supplied through a distributor at dealer price for
MRP selling to their employees.
That is company receives the Britannia products at dealer price and they are supposed to sell
these products to their employees if they need at MRP price.
“Britannia khao world cup jao”—promotion was for 3 months which promised free 3 days trip
to UK for 100 lucky consumers of Britannia.
The company rolled out a wide range of its products bearing the `Britannia khao world cup jao'
slogan on the packaging.
Cricket is a craze in India
Britannia started giving white marble free with every pack of Britannia Treat.
Marble has a caricature of Indian cricketer printed on it.
Consumers were required to collect 100 runs obtained on the purchase of Britannia products
and redeem these for cut out coupons -- the key to the lucky prizes -- that can be collected at
designated prize centers.
Britannia made up to 37% profit of this communication mix.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 12
The Company believes that its business is brands. Therefore, the right and adequate investment
in brands is a key priority. This investment includes everything that the Company does to gain
consumer insights and convert those into meaningful and differentiated propositions that delight
& satisfy consumers and create value for all other stakeholders. During the year, investment in
Advertisement & Sales Promotion increased by 17.5% and together with the renovation &
innovation efforts across the portfolio, resulted in a healthy double digit growth of 20.1%.
The Company further streamlined and strengthened its marketing approach across the two
portfolios of „delight and lifestyle‟ brands like Good Day, Treat, 50-50, Pure Magic, etc., and
„health and nutrition‟ brands like Tiger, Milk Bikis & MarieGold. A 7th new Power Brand was
added to the Company‟s portfolio with the launch of NutriChoice 5 Grain, which created a
meaningful stake in the „health and nutrition‟ space.
A large number of initiatives were taken to fortify the health and nutrition aspect of the
Company‟s portfolio and in that respect, as stated last year, your Company made the responsible
decision of removing transfat from its entire portfolio of biscuits, the only Company in India to
have done this.Consequently, a total of 8,500 T of transfat was removed.
To further strengthen the „health & nutrition‟ benefit, several key brands were fortified with
essential micro-nutrients and today 50% of your Company‟s biscuit & bread portfolio is fortified.
Several new and renovated offerings were introduced across Power Brands and these include
Creams in a new recipe, packaging and a wider choice of flavours; Berry Cherry cake; specialty
breads like cheese garlic bread, multi grain bread, etc.
With a view to increasing the accessibility and affordability of its brands, a number of new packs
and price points were introduced to target new consumption opportunities both „in-home‟ and
„out of home‟
Over the last two and half years Britannia has seen over 22.5% compounded annual growth. Although
the market has not grown but still Britannia has increased their share in the last 4 yrs so they have a
share advantage. These things are done in biscuits category .But they have a larger portfolio of products
like cake, rusk , bread etc which has contributed around 400 cr in their business. So when they look at
bakery they look at each of these segments .There is a large market in bakery so they planned to
renovate some of the existing brands rather than innovating new products.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 13
In dairy product segment Britannia sees that Amul is a big player in dairy product market so it does not
see any advantage to move into this segment .It wants to concentrate on its core competence but it may
enter into the ice cream category as part of its future diversification plans.
this link is a video which describes the future course of action of Britannia industries where in the MD
Vinita Bali Discusses abt the future course of action.
To conclude Britannia is looking ahead the kind of strategy it wants to undertake in order to capture the
market and once again emerge as the market leader. How it will grow in the future and compete with
the other competitors.
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 14
Rs5 to Rs10
Rs11 to Rs15
Rs16 to Rs20
Rs21 to Rs25
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 15
TEN YEAR FINANCIAL STATISTICS : 2001 - 2010
As at / Year ended 31st March 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fixed assets less Depreciation & Amortisation 1,588 1,632 1,481 1,283 1,338 1,516 2,144 2,507 2,839 2,931
Investments 2,156 3,104 2,969 2,913 3,301 3,599 3,200 3,808 4,231 4,906
Net current assets 257 592 747 43 (485) 309 596 2,072 1,161 421
Miscellaneous expenditure 163 217 260 463 342 161 256 232 266 -
4,164 5,545 5,457 4,702 4,496 5,585 6,196 8,619 8,497 8,258
Equity shares 279 269 259 239 239 239 239 239 239 239
Reserves & Surplus 2,123 3,430 3,653 4,059 4,196 5,252 5,909 7,319 8,006 3,723
Loan funds 1,762 1,846 1,545 392 61 94 48 1,061 252 4,296
4,164 5,545 5,457 4,702 4,496 5,585 6,196 8,619 8,497 8,258
Profits and appropriations
Sales 13,325 14,510 13,941 14,705 16,154 18,179 23,171 26,170 31,429 34,246
Profit before Depreciation, Amortisation
and Tax 1,369 1,630 1,722 2,251 2,645 2,218 1,514 2,536 2,866 2,112
Depreciation and Amortisation 189 240 261 224 190 217 253 291 335 275
Profit before tax and Exceptional items 1,180 1,390 1,461 2,027 2,455 2,001 1,261 2,245 2,531 1,737
Exceptional items (41) 1,201 12 (183) (252) 6 (77) 78 (206) (529)
Profit before tax * 1,139 2,591 1,473 1,844 2,203 2,007 1,184 2,323 2,325 1,208
Taxation 434 559 482 656 715 543 108 413 521 43
Profit after tax 705 2,032 991 1,188 1,488 1,464 1,076 1,910 1,804 1,165
Dividends 153 201 251 272 334 358 358 430 956 597
Tax on dividend 16 - 32 35 47 50 61 73 162 99
Debenture Redemption Reserve 47 14 18 - - - - - - -
Retained earnings 489 1,564 692 910 1,117 1,056 657 1,407 686 469
CALCUTTA BUSINESS SCHOOL | Case study on Britannia Industries Ltd 16
* Includes impact on account of transfer of dairy business of Rs. 1257 Mn in 2002.