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News Britannia sales jump up 11%

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ritannia Industries said it will focus on revenue, cost management and innovation to boost sales and profitability at a time when hardening commodity prices have put margins under pressure and there are real fears that deficient monsoon rains will hit consumer demand. Nusli N Wadia, chairman of the biscuits and dairy products maker, said the emphasis on innovation has already ensured that new products account for 10 per cent revenues in Britannia's bakery business and 14 per cent in dairy. "We will further grow the revenue from innovative products even as there are 380 different cost reduction projects running within the company across the spectrum," he told the 93rd annual

general meeting of Britannia Industries, on August 6. Britannia improved its operating margin by 120 basis points in the first quarter ended June, posting net profit of Rs 43.5 crore on net sales of Rs 1,221.6 crore. While net sales increased 11 per cent year-on-year, the jump in net profit was only 4 per cent because a sharp fall in other income. During April-June 2011, Britannia had an additional profit of Rs 10.4 crore generated from sale of property. Britannia Industries Managing Director Vinita Bali said the company is moving to clean fuel like propane, LPG and biomass and undertaking changes in machinery. The move has already generated huge savings and insulated the

company from fuel price fluctuations. At the same time, the company is investing in capacity expansion and new product development. Last year, Britannia set up two plants, in Patna and at Khurdah in Orissa, each at a cost of about Rs 50 crore. It now plans another plant in Gujarat.

Parle will keep on expanding, says Mayank Shah

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ayank Shah, group product manager at Parle Products, the country’s largest biscuit maker, is not interested in launching a wide array of products. Content at being the leader in the glucose category with 79.4 per cent market share, Shah is looking at increasing the glucose category by 15 per cent over the next financial year and capturing single digit market share from competitors. Even as Parle G, the glucose biscuit brand from Parle Products, has consolidated its position as the world’s largest selling biscuit, a recent report by market research agency Nielsen shows that Britannia Industries holds 8.7 per cent market share in the glucose category, while ITC holds 8.3 per cent share. Shah insists it is not the only accolade. “We have moved away from being just a one-product company to having 8-10 big brands. Our sweet cookies range is way bigger than our competitor Britannia, though the company is trying to ape us with many launches,” says Shah. Nielsen data from the last two quarters shows Britannia leading with 34 per cent market share in the sweet cookies category, while Parle has 26.3 per cent share. ITC holds 8.4 per cent market share. Targeting each product of the competitor, he says, “We are not just

leaders in the glucose category. We are also leaders in the crackers category with Monaco and Krackjack. We have also gone past our competitors in the cream category, though we came in much later.” Referring to the cookies category, he adds, “Though they (Britannia) have Good Day, four years ago we came up with 20-20. In terms of market share of the cookie portfolio, we are way bigger than Britannia.” Stating that “Nielsen is under reporting the figures as is known,” Shah adds, “One thing is clear. There is absolutely no compromise on taste. Though we have several big brands, and Parle G is the world’s largest selling brand in terms of volume, our only limitation is in terms of assortment. There has been a clear focus on this.” Given the surfeit of biscuit manufacturers in the market, players such as Unibic, Priyagold, Anmol and United Biscuits have been biting into large chunks of the market. Parle’s Shah is unfazed. “Like most companies we also thought rather than restrict ourselves to just biscuits, we should explore other packaging items to fight for a larger share of stomach. All of these, however, had to be within the biscuit or snacking gamut,”

added Shah. The company has gone about restructuring its snack portfolio to gain a larger market share in a category dominated by PepsiCo’s Lay’s, Kurkure and Cheetos, including local players Haldiram, Balaji Wafers and ITC. In terms of confectionary too, Parle Products has a strong presence with leading brands such as Melody, Mango Bite, Kaccha Mango Bite and Poppins. The firm has recently launched a lacto candy Londonderry. An advertisement for the same has been shot in Europe with an international cast and crew. Parle Products also recently put out a new creative campaign ‘empty stomach’ for its 20-20 cookies. Advertising agency Ogilvy and Mather (O&M) developed an integrated campaign with multiple executions to position Parle 20-20 as a quick anytime hunger fix. “The communication strategy was very clear. All of us know what an empty stomach feels like. Everyone and everything feels like a hindrance. We are at our worst — restless and irritable. A quick hunger fix is exactly what one requires in these situations,” said an O&M official. The hole in the stomach creative emphasises hunger.

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AGRI BUSINESS & FOOD INDUSTRY  

India's only monthly magazine having maximum presence in National & International Exhibitions. Regular topics cover the food processing sect...

AGRI BUSINESS & FOOD INDUSTRY  

India's only monthly magazine having maximum presence in National & International Exhibitions. Regular topics cover the food processing sect...

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