Britannia Industries is one of India’s leading food companies with a 100 year legacy and annual

revenues in excess of Rs. 9000 Cr. Britannia is among the most trusted food brands, and
manufactures India’s favorite brands like Good Day, Tiger, NutriChoice, Milk Bikis and Marie
Gold which are household names in India. Britannia’s product portfolio includes Biscuits, Bread,
Cakes, Rusk, and Dairy products including Cheese, Beverages, Milk and Yoghurt. Britannia is a
brand which many generations of Indians have grown up with and our brands are cherished and
loved in India and the world over. Britannia products are available across the country in close to
5 million retail outlets and reach over 50% of Indian homes.
The company’s Dairy business contributes close to 5 per cent of revenue and Britannia
dairy products directly reach 100,000 outlets. Britannia Bread is the largest brand in the
organized bread market with an annual turnover of over 1 lac tons in volume and Rs.450 crores
in value. The business operates with 13 factories and 4 franchisees selling close to 1 mn loaves
daily across more than 100 cities and towns of India.
We have a presence in more than 60 countries across the globe. Our international
footprints includes presence in Middle East through local manufacturing in UAE and Oman, are
the No 2 biscuit player in UAE with a strong contention to leadership and have a similarly strong
market position in the other GCC countries. We are also the market leaders in Nepal and are in
the process of investing a manufacturing facility in the country.
Our foot print spreads across North America, Europe, Africa and South East Asia through
exports and we are investing in a state- of- the- art facility in Mundra SEZ, Gujarat, to service the
exports markets. Our strategic expansion plan is based on the principle of ‘One new market a

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year’. We plan to expand through local operations in Africa and South East Asia in the coming
years.
Britannia takes pride in having stayed true to its credo, ‘Eat Healthy, Think Better’.
Having removed over 8500 tonnes of Trans Fats from products, Britannia became India’s first
Zero Trans Fat Company. Over 50% of the Company’s portfolio is enriched with essential
micro- nutrients which nourish the body. The company set up the Britannia Nutrition Foundation
in 2009, and began working on public private partnership to address malnutrition amongst under-
privileged children and women.

Britannia is recognized as one of the most trusted, valuable and popular brands among
Indian consumers in various reputed surveys. Britannia believes that ‘Taste & Trust’ are its
sobriquet and will constantly endeavor to make a Billion Indians reach out for a delightful and
healthy Britannia product several times a day! Britannia takes pride in having stayed true to its
credo, ‘Eat Healthy, Think Better’. Having removed over 8500 tonnes of Trans Fats from
products, Britannia became India’s first Zero Trans Fat Company. Over 50% of the Company’s
portfolio is enriched with essential micro- nutrients which nourish the body. The company set up
the Britannia Nutrition Foundation in 2009, and began working on public private partnership to
address malnutrition amongst under-privileged children and women.

Operation Strategy:
Increasing market share will be tough for Britannia at a time when volume growth for
biscuit makers has dropped to 5-7%—the lowest in over a decade—from over 10%. Britannia is
also facing increased competition from Parle and Sun-feast maker ITC Ltd as well as several
hundred regional firms. For achieving the other goal, company can’t afford to raise prices
because of the risk of losing customers to rivals. Bigger rival Parle has already increased its
promotional expenditure and has held prices despite an increase in oil costs.
On an immediate basis, to increase the company’s 30-33% biscuit market share is top
objective and has identified fixing kinks in Britannia’s sales and distribution as the top priority.
Britannia, which also sells curd, flavored milk, cheese, bread, cake and rusk, has begun to
separate its distribution channels for the biscuit and dairy businesses. The company already has

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different sales teams for the two businesses in some cities and is likely to implement the change
in other parts of the country in the near future.
Britannia will not sacrifice market share. It’s not like profit is not important but the
management’s view is that if you have market share, profits will follow. In this volatile
economic and cost environment, you need to have shorter lead times and you need to be
competitive in the market. Price increases will slow growth, so the company will hold prices for
now," said one of the two people, who have direct knowledge of the developments. seperating
the company’s distribution channels will bring sharper focus among his sales executives, lead to
better relationships with retailers and distributors, and possibly cut lead times in getting products
to the market, this person said.
The company is not looking at dramatic changes in strategy but there are tweaks required
and, operationally, there’s a lot of room to improve. The top focus currently is distribution.
Britannia’s efficiency and execution in distribution has slipped a bit and it needs to get that back.
Britannia is also looking to cut the number of its biscuit brands and some pack sizes as well.
Over the past few years, the company launched a few labels such as Nutri Choice and numerous
extensions of its existing brands, but failed to introduce a product that swept the market.
Some of the other changes are implementing include developing a new strategy for the
company’s ₹ 1,500 crore dairy business, installing a scientific demand forecasting system and
streamlining the management structure by giving more functions to senior management
executives, according to the two people cited above.
In dairy, the company doesn’t have a clear strategy yet and it’s a category where strategy
is crucial. Before that, the company needs a clear blueprint on what the dairy portfolio and
strategy is going to look like. The firm’s Ebitda (earnings before interest, taxes, depreciation and
amortization) margins fell to less than 6% last year from 9% five years ago mostly due to a
sustained rise in material costs.. To cut costs, Britannia is increasing the use of biomass, a
cheaper alternative than traditional fuels, and has identified other measures to save energy such
as developing improved baking ovens that lead to reduced emission of heat. The  use  of biomass
at Britannia factories was initiated. The aim is not to go for an incremental kind of product; the
aim is to come up with a disruptive product that will change the market. Britannia wants to have
8-10 products in the pipeline that aren’t there in the market and even if one of them works, the
goal would’ve been achieved.

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Markets competition:

Direct competitors: Direct competitors or direct competition, are businesses that offer
fundamentally the same products or services as yours. Customers will likely consider a variety
of price points, locations, service levels, and product features when deciding where to buy
something. While giving a new twist to an old product or service that’s been around for a while,
you will have direct competitors. It’s a good practice to look at how they’re doing and to
compare your performance.

The biscuits and cookies industry in India, valued at inr 145bn (usd 2.41bn) in FY 2014, has
been growing at a cagr of about 10% over the last three years. Britannia, according to industry
sources, is the leading player in cookies with an estimated market share of 30 per cent. While
Parle dominates in terms of value and volume, this year 2015 saw a surprising growth of
Britannia which surpassed Parle by 0.5%. Britannia’s market share was a little over 28% in value
terms in April this year, while Parle’s value share during the month stood at a little over 27.5%.
Following is a chart which compares Britannia’s direct competitors in terms of products offered.
These competitors are ITC (Sunfeast) and Parle.

Indirect competitors: indirect competitors are companies which offer moderately different
products, but target the same group of customers with the goal of satisfying the same need. These
are sometimes also known as substitutes.

In case of Britannia, apart from having direct competitors in the cream biscuit category in the
form of dream cream and bounce by Sunfeast and magic by Parle; it also faces threat from
Sunfeast bourbon and hide n seek bourbon biscuits as well. Hence, it is very important to be
careful of all sorts of competitors and be on the defensive.

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Forecasting Techniques :

MOVING AVERAGE METHOD:

The simple moving average method forecasts on the basis of demand values during the recent
past. Such a method is applicable to time series that doesn’t have any pronounced behavioural
pattern of fluctuations.

DEMAND FORECAST OF BRITANNIA INDUSTRIES LTD:

The past sales data of three years of Britannia Industries Ltd. Has been selected for the purpose
of forecasting the data for the next year using the simple moving average method. (turnover in
crores)

Mar11| Mar10| Mar09|

4250.13| 3427.97| 3142.89|

Demand forecast using the moving average method for Mar’ 12 = sale of 09 + 10 + 11
3
=3142.89+3427.97+4250.13
3
=3606.99
Mar 12(forecasted)| Mar 11| Mar10| Mar 09|
3606.99| 4250.13| 3427.97| 3142.89|

ANALYSIS OF THE GRAPH:

From the above graph, it can be seen that the company has been performing good for the past
three years continuously with the demand continuously increasing at a good rate. But the forecast
shows that there has been decline in the demand.

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Quality control system:

The company is ISO 22000 certified and has adopted HACCP system for food safety and quality
assurance. Controlling quality in the plant was mostly achieved by inspection of raw materials,
carrying out checks on process and inspection of the final products to ensure that no poor quality
products are sent to the consumer. The firm has prescribed set of specifications in respect of raw
ingredients which are followed strictly during process of procurement. Physical and chemical
tests for dominant raw materials were carried out in the laboratory for examination of incoming
materials. Flour is a dominant raw material upon which the quality of the Biscuit is dependent.
Flour with 13-14 percent moisture content, 7.5-10 percent gluten, 18-25 ml sedimentation
volume, 1 percent ash and 0.1 percent acid insoluble ash are considered suitable for biscuit
making.

Under process control several physico-chemical and functional tests were performed
daily and review of checks conducted over seven weeks revealed that these parameters were
within specified limit. However, wide variation with respect to temperature at different zones of
oven from prescribed limit was observed. Diameter, stack length, weight, biscuit coloration,
thickness and moisture content were critical parameters which were monitored hourly to keep
them under control. Prerequisite programmes like good manufacturing practices and standard
sanitary operating procedure were in place. Ingredients and process step wise hazards and their
control measures have been identified. Four identified CCPs were emphasized by applying the
principles of HACCP to minimize the risk to the minimum, during processing.

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Management of Materials:

The thrust was given on the different storage area go downs. The Housekeeping and the things
related to the purchasing of material. As soon as the material was received in the receipt section,
it was entered into daily receipt book and given an ORB No in register. It included the detail like
GR No; Number of boxes, Transporter Name, Bill, Challan No., Date of Delivery, and Purchase
Order No, the boxes were then opened and checked with respect of quantity. A receipt voucher
was made giving the details of material specification, quantity dispatched as per challan, quantity
received and other detail related to this transaction. After making the Receipt Voucher the user
department was informed to inspect the material. Materials are inspected and signature obtained
on Receipt Voucher then material was sent to store. Quality of sugar which is used in preparation
of biscuits was very fine. C.W.C go down was having capacity of 5,600 Bags, but in case of
excess bags either fresh or old stock restacking was also done in the go down for keeping bags.
Materials were loaded and unloaded by the labors. Investigator is in opinion that the company
should adopted just in time. So that the company should not block it’s found in extra inventory.

Capacity Planning:

Britannia Industries, India's second-largest biscuit maker, is looking to increase the share of in-
house production in order to reduce cost overheads. The Wadia Group-controlled company will
enhance in-house production share to 60% of the total production in the next three to four years
from the current 46%. The move will help increase operating efficiencies and boost gross
margins.

To cut costs further, the company has set up energy efficient ovens in new units using
patented technology and is also using biomass as an alternate fuel thereby reducing energy costs.
The recent past has also seen reduction in the overall headcount whereby bigger roles have been
offered to existing managers to contain costs and improve employee productivity and
involvement. The company now has leaner and accountable team, and is undertaking various
projects to undertake production efficiencies by reducing waste and using automation and TQM.

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Britannia New Distribution Model, To Operate With Zero-Day Inventory:

Britannia Industries Ltd is adapting the “leanest possible” distribution model to directly
“tailor-serve retail outlets” across the country in less than a day as part of its plan to multiply
sales and expand retail reach. In the new distribution model, the Kolkata-headquartered biscuit
maker plans to operate with a “zero-day inventory” by “reducing distance between its
distribution centers and retail stores” that the company reaches directly. Direct distribution
results in much better off take of brands.

The new system is mapped real-time. It also reduces operational cost for dealers and
distributors as they would not need to stock products. At present, Britannia has more than 800
vendors, 70 factories, 50 depots, 300 stock-keeping units and 3500 wholesalers. “The role of
dealers and distributors is changing first. We need them for local knowledge, logistics and credit
collection. Plus, they would take our products to geographies where Britannia can’t reach direct
in a commercially viable manner. This would further expand reach.

Waste Management:

Britannia close to becoming zero-waste firm- Britannia used to produce over 100 kilograms of
waste a day. But its waste production reduced by over 30% when it started converting its
wet/food waste into manure. It also began recycling its paper and plastic waste to office
stationery. Today, just 10 % of its waste goes into the public waste management system.

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