Britannia Dairy eyes 200-300% growth by 2025

The lockdown witnessed consumers shifting their consumption from out of home to in home. During financial year 2020-21 Britannia Cheese grew at 30 per cent. The growth in the first half of the year was somewhat subdued owing to the large bases of the previous year, however the growth for Britannia and the category (dairy) has comeback in the second half of this year. "While Swiggy and Zomato have become a permanent part of our lives, still, the pandemic has also taught us that cooking at home is often safer than eating out," says Abhishek Sinha, Chief Business Officer, Britannia Dairy in an exclusive interview with Bizz Buzz. Britannia Dairy is looking to grow its dairy business by 200 to 300 per cent from 2021 to 2025.

The dairy segment amounts to approximately 5% of the total revenue generated by Britannia. Britannia Dairy is investing Rs 600 crore at Ranjangoan factory in Maharashtra, for a backward integrated dairy factory that is expected to commence manufacturing by May'22

What are the upcoming trends you believe will dominate the dairy industry in the future years?

- There are several trends that have evolved through the past few years. For instance, consumers want to indulge in better and more food options. Especially, after the last two years of sensory deprivation from missing vacations to the casual eating out today, consumers are open to the idea of premium indulgences to treat their palate

- Home cooking resurgence: While Swiggy and Zomato have become a permanent part of our lives, yet the pandemic has also taught us that cooking at home is often safer than eating out. Many consumers have experimented with new age foods like Cheese and value-added yogurts. These are expected to grow in popularity

- Health has become a top priority for us through the pandemic and today the consumer has realized that there are extremely delightful products like Cheese and Yogurt that are not only tantalizing for your taste buds but also contain large amounts of Protein, Minerals & Vitamins

- The Growing space of Dairy Beverages: In the past decade we have seen the move from aerated drinks to juices. But in today's time one of the hottest sectors in terms of beverages are the milk and yogurt-based beverages with varying propositions. We expect this category to see a lot more action and growth

- Functional Claims: The consumer has become increasingly aware of everything they consume. This consumer education has led to the rise of the nutrition savvy consumer that reads the fine print & seeks out food products with genuine functional claims

- During and post the pandemic, we realized that the Cheese category in tier 2 towns has started out-pacing the growth in metros. People are now doing most of their shopping online on the various e-commerce grocery stores available. The e-commerce business for cheese has been growing at a CAGR of 100 per cent for the last 2 years and we expect to continue the momentum in the coming year as well.

What has been one important learning for the dairy business in the pandemic?

The past 2 years have led to a significant amount of learning for the sector. One important change has been the growth in consumer awareness and desire for better food products has created innovation & marketing opportunities through educating the consumer on the nutritional benefits of our products.

For instance, we are witnessing good consumer appreciation for Britannia cheese as a source of good quality protein derived from cow's milk.

Could you tell us about the new campaign launched by Britannia cheese on good quality protein consumption for young Indians?

Through the launch of our new campaign on National Protein Day, Britannia Cheese aims to educate consumers about its good quality protein. Proteins are an important macronutrient and should be an essential component of a healthy diet. However, 4 out of 5 Indians do not consume enough good quality protein.

The campaign seeks to raise awareness about the role of Britannia Cheese as a part of children's nutrition and encourages Indian parents to include Britannia Cheese as a rich and delicious source of good quality protein in their children's diet. It is important to communicate that protein is a very important nutrient to build strength in children today, and Britannia Cheese is a nutritious way of adding protein to their diet where two slices of Britannia Cheese are equal to one glass of cow's milk, or 35g of paneer, in terms of protein content.

How is Britannia's dairy segment grown in the last 5 years and what are the plans to grow the cheese business in the next five years?

The growth in the first half of the year was somewhat subdued owing to the large bases of the previous year, however, the growth for Britannia and the category has comeback in the second half of this year.

While Britannia remains strong across top metros and modern trade stores, our key growth markets in recent times have been the next 20 towns beyond the top 8 metros & e-commerce.

During and post the pandemic we realized that the Cheese category in tier 2 towns has started out pacing the grown in metros and we are looking at growing our distribution in these markets significantly this year.

Further the e-commerce business for cheese has been growing at a CAGR of 100 per cent for the last 2 years and we expect to continue the momentum in the coming year as well. Britannia's Dairy is expected to grow by 200 per cent to 300 per cent by tapping the large institutional cheese market as well as other opportunities that having our own back end would enable us to tap. The financial year 2020-21 saw Britannia Cheese growing at 30 per cent on the back of lock downs and consumers shifting their consumption from out of home to in home.

What is Britannia's revenue growth from dairy and what is the expected growth in the next 5 years?

The dairy segment amounts to approximately 5 per cent of the total revenue generated by Britannia. Britannia Dairy has an exciting 2022 coming up, as we start manufacturing our own products this year. We vision ourselves as a leader in the value-added dairy category, which we shall achieve by bringing world class product experiences to consumers at competitive prices

We are investing Rs 600 crore in our Ranjangoan factory in Maharashtra, for a backward integrated dairy factory that is expected to commence manufacturing by May'22.

What is the market size of the processed cheese segment and Britannia's current market share both, in cheese and dairy?

As per IMAC Data, the Cheese category was Rs 3100 crore category in 2018 with 40 per cent of the market coming from Retail sales and 60 per cent of the market from institutional sales.

What is the target contribution to topline of dairy over the next couple of years from the current 5 per cent?

We are looking at growing our dairy business by 200 to 300 per cent from 2021 to 2025 as the execution of the dairy factory would allow us a step jump in existing categories as well as the addition of several new ones!

How has the growth been in Britannia cheese segment in the past year? What factors do you think augmented this growth?

The lockdown witnessed consumers shifting their consumption from out of home to in home. This period, which is essentially the financial year 2020-21 saw Britannia Cheese growing at 30 per cent. The growth in the first half of the year was somewhat subdued owing to the large bases of the previous year, however the growth for Britannia and the category has comeback in the second half of this year.

While Britannia remains strong across top metros and modern trade stores, our key growth markets in recent times have been the next 20 towns beyond the top 8 metros & e-commerce.

We realized that during and post the pandemic, the Cheese category in tier 2 towns has started out-pacing the growth in metros. We plan on increasing our distribution in these markets.

Further the e-commerce business for cheese has been growing at a CAGR of 100 per cent for the last 2 years and we expect to continue the momentum in the coming year as well.

E-commerce sales have been on the rise, how does Britannia plan on leveraging that channel?

The e-commerce business for Britannia has seen a significant shift over the last two years and Britannia Cheese has been leading the shift by growing at CAGR of more than 100 per cent for the last 2 years. Amongst the various categories that Britannia has businesses in Cheese has amongst the highest internal business contribution and we plan to take that contribution to a double-digit share of business in 22-23. The key focus for Britannia Cheese on e-commerce has been to drive discoverability & purchase through optimal activations across platforms and through the year. We are also targeting a homogeneous & consistent Market Share growth across platforms through partnerships & activations.