Food and drug administration

In April-June, Britannia's net profits were up by 118% over a year ago, and at a three-year high

Brian Carvalho
Published: Aug 31, 2020 09:18:10 AM IST
Updated: Aug 31, 2020 11:56:36 AM IST

forbes india edit

For some years now, Britannia’s dependence on biscuits and dairy—they account for roughly 95 percent of its sales—has been a bugbear with a section of analysts. While Britannia is a leader by value share in biscuits—comprising 80 percent of the total portfolio—its apparent inability to innovate by launching products in other food categories makes it look like a largely one-trick pony—albeit, a trick it had aced.

It was around five years ago that Managing Director Varun Berry reckoned it was time to make Britannia a ‘total foods company’—with a presence in everything from salted snacks to chocolates and cakes to croissants.

Trust a pandemic to disrupt strategy and ambition. But few at Britannia would be complaining. Consider: During the Covid-19 triggered lockdowns, what were the essential food items you filled your home shelves and fridge with? Vegetables, fruits, rice, cereals, pulses, tea, coffee—and, of course, biscuits, bread and dairy! Result: Britannia’s game plan to become a total foods company may have been pushed to the back burner in the short term, but it succeeded in putting out a white-hot financial report card for the April-June quarter. Net profits were up by 118 percent over a year ago, and at a three-year high. Clearly, the dependence on the core business paid off fine—revenue growth was a robust 26.5 percent on the back of 21.5 percent volume growth—at a time when primarily small-ticket products were in demand (and in supply).

Such growth may be akin to the proverbial solitary swallow that does not make a summer, but as long as the pandemic persists and sporadic lockdowns are the order of the day, Britannia will be in clover. Yet, what happens to the plan to become an all-round foods major? That’s what Rajiv Singh dives into in this fortnight’s cover story on Britannia titled ‘Tough Cookie’. The short answer: The strategy will continue to play out. Consider the plan for cakes, for instance. As Berry tells Singh: “Cake is still an under-penetrated category, has a low shelf-life, and is predominantly urban. Now we are changing it with our rural coverage and distribution.”

Our other big package this fortnight is on another essential in Covid-19 times: Health care. That India’s public health infrastructure is inadequate has been exposed as Covid-19 cases surge across the country. The pandemic may have been brutal, but it is also a wakeup call to unleash health care reform. And the government has responded with its potentially landmark National Digital Health Mission. Manu Balachandran delves into the plan to give every Indian citizen a unique health ID that will give access to e-pharmacies, telemedicine and health infra. Will the mission work? It all depends on execution, and allaying privacy apprehensions.

What the government plans to do is being attempted in bits and pieces by a clutch of med-tech startups. Divya Shekhar caught up with a few founders who are working with primary health centres in villages to ensure access to doctors and medicine, thereby eliminating the need of travelling to cities for treatment. And, closer to the scourge at hand, Naini Thaker digs into a bunch of innovators who have tweaked existing solutions to tackle the pandemic.

As private hospitals across the country filled up with Covid-19 patients, the perception was that these companies—many of them listed on the stock exchanges—were making money hand over fist. The April-June quarter financials of some of these chains instead indicate a dip into the red. The reason, as Pooja Sarkar brings to light, is that the bread and butter of any hospital—elective cardiac and cancer surgeries, among others—have come to a standstill. Don’t miss ‘Bitter Pill’.


Best,
Brian Carvalho
Editor, Forbes India
Email:Brian.Carvalho@nw18.com
Twitter id:@Brianc_Ed

Click here to see Forbes India's comprehensive coverage on the Covid-19 situation and its impact on life, business and the economy‚Äč

(This story appears in the 11 September, 2020 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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Cover story: Behind Britannia's record growth during lockdown