"We vision Britannia Dairy as a leader in the Value-Added Dairy category"

Adgully is back with a new edition of its annual feature – TRENDING NOW – where we present the strategies and views of a cross-section of industry leaders as they go about reclaiming lost time and market opportunities and build for a stronger future, armed with the lessons of the pandemic period.

Over the next few weeks, Trending Now will bring insights from industry leaders on how their organisations are gearing up to seize the opportunities in 2022, break through the Covid disruptions and find growth and remain resilient.

In conversation with Adgully, Abhishek Sinha, Vice President - Dairy Business, Britannia Industries Ltd, speaks about his expectations for the Dairy and Beverages sector in 2022, as well as the challenges and opportunities in the year ahead.

What are the trends that you expect to dominate in your sector in 2022?

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 realised 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 realised 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% for the last 2 years and we expect to continue the momentum in the coming year as well.

What are the challenges and new opportunities that you see emerging in the year ahead?

The last two years have been quite rough for the consumers and the industry due to a number of factors however it’s been a mixed bag in terms of challenges and opportunities.

The rise of e-commerce has created a new shopper journey for consumers and Britannia has been focussing of driving fair market share across e-commerce platforms through optimum investment and promotions.

Growth in consumer awareness and knowledge 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.

The move towards healthier food options has also opened up the space for Dairy beverages under Winkin Cow and we realised that the consumer has started appreciating these offerings even in off season months from October-December, beyond the summer season. We are looking at making Winkin Cow a vibrant brand through the entire year as a healthier alternative to conventional beverages.

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.

Some key challenges in the year ahead are as follows:

• One big challenge that all of India has been facing in recent times is the rise in commodity inflation. Even in 2022, we are witnessing an uptick in milk prices due to pandemic disruptions and non-replacement of the milch herd
• The last 2 lockdowns have impacted the businesses of beverages from an on-the-go behaviour stand point, owing to the usual high demand witnessed in the summer seasons (lockdowns were in place in peak summer)
• Since the consumer doesn’t feel as safe shopping outside, the shopping behaviour has changed from a browsing behaviour to a mission driven shopping. As a consequence, the role of distribution in driving awareness and engaging consumers has diminished

How is this year's turnout to be in this sector as compared to the last two years? How strong the recovery will be, what are the changes that have happened in this sector in the last two years?

Even as we go through a third wave, I would say that we are cautiously optimistic about 2022. In 2020-21, Britannia Cheese witnessed a phenomenal market reception with 30% growth as the world went through a crippling second wave and a global supply chain crisis. Over the last two years, there has been a significant shift in consumption as consumers opted more in home consumption as opposed to out of home consumption.

This development, coupled with the aggressive penetration of E-commerce in the F&B industry, has enabled us to take our investments across multiple platforms. In such a dynamic environment, the digital space has opened more scope for brands to expand their consumer touch points.

Additionally, as the pandemic recedes, institutional business has made an encouraging comeback and that has given the overall industry a very handsome increment. Going forward, an integrated, platform agnostic approach will help brands be more agile and focused on their outreach.

Overall, we are posed for a strong year of double digit growth boosted not only by a resurgent economy, but also with the back end investments that we are making.

How strong will this sector’s growth be compared to the last two years as well as the pre-Covid period?

In just the last financial year, Britannia Cheese delivered sales of Rs 200-300 crore in such a short span of time, we have risen to become the 2^nd largest player in the retail cheese market in India.

Despite all the constraints associated with the pandemic, Britannia continues to have a strong influence across top metro and modern trade stores. Interestingly our key strategic growth markets have been the next 20 towns beyond the top 8 metros and e-commerce.

During and post lockdowns, the cheese category witnessed its growth in Tier 2 markets, out pacing the growth in metros. As we move ahead, we are also considering growing our distribution across all these priority markets in a significant manner.

Moreover, the e-commerce business for cheese has been growing at a CAGR of 100% for the last two years and gives the world’s digital pivot, we expect to continue the momentum for the coming year as well.

The financial year 2019-20 or the first year of the lockdown had seen a meteoric growth for the Cheese category and Britannia Cheese grew by 30%. At the same time, Dairy Drinks and Dahi had seen some business impact owning to the lack of consumer mobility.

We expect another blockbuster year for Winkin Cow on the back of a much better summer than the last two years and a number of breakthrough innovations that we will launch through our own factory.

Overall, we are extremely bullish for the coming year and expect to show a scale jump versus the pre-Covid period.