Britannia appears to scale up dairy business
Britannia Industries is trying to double the turnover of its dairy verticals over the subsequent to a few years.
While there can be a widening of its current portfolio, plans also are afoot to increase milk procurement too.
The enterprise, that is finalizing the capex for the phase, may also discover the opportunity of having a brand new logo other than the existing eponymous one (Britannia) and ‘Winkin Cow’ (for milkshakes).
Dairy, wherein offerings are in the value-introduced segment, debts for ₹500 crore of turnover annually, and remains a worthwhile vertical for the ₹10,000-crore Britannia Industries. Sources say the business had a margin of 20 consistent with cent (income before tax) in FY19.
In the first area of this monetary (April to June), the dairy business became impacted adversely by way of an inordinate growth in milk expenses.
According to Gunjan Shah, Vice-President – Sales and Head of Diary Business, Britannia plans to stay into the price-introduced segment wherein margins are relatively better while compared to the pouched milk category.
The agency will look at “backward integration” with improvements (new merchandise) coming in thru extension of its existing services like ‘cup-curds’ into “lengthy-shelf existence shakes”.
“The idea is to double the turnover on this category in 2-three years. We are very certain we need to live inside the value-brought space. That’s where it is margin accretive,” he told BusinessLine, all through an interview.
While milkshakes in tetra packs had been launched closing economic, the opposite offerings it is exploring will be within the probiotics space. Moreover, it could also explore the fitness drink segments (low-sugar and coffee-fats services).
“Probiotics is in reality on the scanner. But now not right away,” Shah delivered.
According to him, the Winkin’ Cow brand of milkshakes has done “extraordinarily well” for the company and within nine months of its launch, it’s miles presently the No. 2 brand and competes with the likes of ‘Cavin’s’. Moreover, put up the release of Winkin’ Cow, the organization has been able to ramp up its distribution base through two-and-a-half of times.
“We may want to take a look at having another brand for culinary reports,” he stated.
Britannia Industries MD, Varun Berry, in a recent analyst name mentioned that within the dairy commercial enterprise (for milkshakes), the employer has “hired no capital at all” and it’s far all “1/3 celebration manufacturing”.
Britannia is also planning to ramp up its procurement as its dairy line within the Ranjangaon facility (in Maharashtra) goes on-stream. The corporation has 25-30 milk series centers within the State and collects up to 25,000 liters, a day.