Haven’t seen rural growth similar to past decade: Britannia’s Varun Berry

Britannia Industries Vice-Chairman and Managing Director Varun Berry informed analysts after the release of its results that rural growth is not progressing as it did in the past decade.

“We haven’t seen rural growth in the same manner as we did in the past 10 years,” said Berry. He acknowledged that urban growth is currently outpacing rural growth; however, he added that it is only a matter of time before the situation improves, as the maker of Good Day biscuits continues to expand its rural distribution.

“We continue to do so even though we are not gaining the traction we were accustomed to,” Berry added.

The company has extended its direct reach to 2.76 million outlets and increased its rural distribution by appointing 29,000 rural distributors, compared to 28,000 in December 2022.

During the quarter, the food major also implemented price reductions and introduced consumer promotions for its key brands.

“To ensure that we don’t maintain the same prices but align them with the inflation of raw materials, we have taken strategic pricing actions in some of our key brands. We have also implemented tactical consumer promotions to drive consumption of those products, as we have observed that consumption trends, especially in rural areas, are not as robust as in previous years,” Berry added.

In comparison to the same quarter last year, the company took a 4 per cent price cut to pass on the reduction in raw material costs to consumers. Regarding competition from regional players, Berry said that they are currently in a “honeymoon phase”, and it will take a few months to determine their success.

Berry also informed analysts that the company will closely monitor the stock price situation of commodities due to high volatility in the past two or three years.

“We remain vigilant on the competitive pricing actions resulting from commodity inflation. Our strategy will remain focused on driving market share, a critical aspect for us in all of our categories,” he said.

First Published: Feb 07 2024 | 11:28 PM IST