Eat Healthy. Think Better. Buy Britannia. The 80-year-old biscuit king is reinventing itself. Britannia now wants to become a foods giant, with the newly-added tag of health and nutrition. What's more, with a clever formula of prices and products, it is targeting every segment of the Indian market.

By Chhaya

Britannia Rules! A day before the World Cup Of Cricket 99 began in England on May 14, 1999, one of Britannia Industries' senior-most marketing managers was spotted at Mumbai's Sahar International Airport-escorting a gaggle of excited children, all of them sporting Britannia caps, Britannia T-shirts, and other assorted Britannia paraphernalia. No, he wasn't test-positioning yet another brand of biscuits on a group of unsuspecting young 'uns in an airport lounge. Those kids were actually some of the 100 mega-winners of the Britannia Khao, World Cup Jao contest, being flown off on charters to Old Blighty to watch the World Cup at Britannia's expense. See Cricket. Sleep Cricket. Eat Only Britannia (sic!).

After all, the Rs 1,030-crore Britannia had spent a whopping Rs 10 crore on the bkwcj contest-the single biggest promotion ever in the Indian marketing history. Instead of concentrating on a few of its biscuit brands, Britannia included all 16 of them in the 7-level contest it ran, which blocked the air-waves for 13 weeks. The result: 1.60 crore customers actually exchanged 4 empty packs each for the booklet on cricket that came as the first reward. Make no mistake, though: Britannia's jump onto the Cup bandwagon was not driven by the herd mentality that spurred marketers to splurge on cricket promos this year.

Britannia's decision was entirely pre-meditated. Every March, biscuit sales fall by nearly 30 per cent. It is a seasonal quirk that biscuit-makers like Britannia have learnt to live with. But, as the run-up to the World Cup began in February, 1999, Britannia saw a golden opportunity to boost its sales this year. And, as it turned out, the company's volumes did, eventually, grow by 20 per cent between February and April, 1999, versus the industry's 7 per cent. Imaginative? Yes. Costly? Yes. Uncharacteristic?

Utterly. Till recently, no one would have associated such street-savviness with Britannia. The 80-year-old Anglo-Indian corporate citizen was, well, 80 years old. And it showed. Britannia's biscuit brands, which have enormous equity, were market-leaders, but lacked magic. Smaller players, like Parle Products, as well as scores of regional brands were constantly snapping at its heels. While its share in biscuits-Britannia has held on to 38 per cent of the organised sector's market-hadn't taken a bashing, the company hadn't been growing it either.

What's more, the Rs 3,500-crore business has been commoditised, with 65 per cent of the 1 billion biscuits bought every year by Indians being produced by the small sector. Worse, suddenly, a spate of transnationals broke in last year: Sara Lee, United Biscuits, Kellogg, and Nestle India. And Britannia, clearly, could no longer take even its leadership for granted.

Simultaneously, the Bangalore-based boxwallah faced another challenge: it was over-dependent on one product, with biscuits accounting for 85 per cent of its turnover last year. Dependence to that degree could have disastrous consequences, especially in a market where the competition was hotting up. It had happened to Colgate-Palmolive, whose over-dependence on the oral-care market is threatening its existence. It could happen to Britannia too.

So, Britannia realised that it would have to both fire up its marketing strategies in its main line of business, and tap new food categories to grow in too. One reason why it woke up late was because the company didn't have a proper parent until the French food and beverages major, Danone, acquired RJR Nabisco's holding in the company. Only in 1993 did Danone, along with Bombay Dyeing's Nusli Wadia, consolidate its 44 per cent stake in Britannia, and put in place a stable management, led by Managing Director Sunil K. Alagh. But now, Alagh realised, the time had come to change the rules of the game-quickly. His two-pronged agenda:

REINFORCE BRITANNIA'S STRENGTH IN BISCUITS. Swamp the market by wider and deeper distribution, and differentiate Britannia's products by re-positioning every brand.

REDUCE BRITANNIA'S DEPENDENCE ON BISCUITS. Diversify into new businesses, and turn Britannia from a biscuits company into a foods company.

Thus, Britannia wants to stay the market-leader in biscuits, and be a major player in other businesses too. ''As we enter the New Millennium, the company's vision,'' explains the dapper, salt-and-pepper-maned Alagh, ''is to ensure that every third Indian is a Britannia consumer.'' That is, 300 million consumers of Britannia's biscuits, bread, butter, cheese, and snacks. And, who knows, perhaps yoghurt-and, of course, milk.

Don't let their innocuousness lull you into thinking that these changes are merely part of a routine repositioning initiated by an ageing brand. The desire to launch a product for every segment of the market, intensify market penetration, and diversify into foods is indicative of a revolution at Britannia: an intention to look beyond the product at the customer. And every gambit in Alagh's marketing game-plan can be traced to a new-found focus on the customer.

Brandishing Brands
As any company that has recently launched a brand of cheese should know, two customers can be as different as chalk and cheese. Britannia's customers range from the rural gamin, who spends a few rupees on a packet of Tiger at the local paan-shop, to the health-conscious urban housewife, picking up a month's supply of Marie Gold at a supermarket. Any company that wishes to cater to a customer-base as varied as this needs to possess a large portfolio of brands. With different USPs, positioned at different price-points, yet unified under a uniquely differentiated mother brand that is near-generic: Britannia.

A biscuit is, well, a biscuit-made of wheat flour, sugar, leavening agents, emulsifiers... How could Britannia make its biscuits any different? As a starting-point, between late 1995 and early 1997, Britannia conducted qualitative and quantitative research, surveying over 5,000 consumers, to find out how they perceived the brand. One finding: the customer looks at Britannia as a trusted and a caring brand-one that she grew up with. Such values were not unique to Britannia; brands like Johnson & Johnson and Dabur enjoyed the same virtues in the customer's mind. Points out Sandeep Puri, 35, Associate Director, Ammirati Puris Lintas, Britannia's ad agency: ''We had to create a more tangible association. Health and nutrition came to mind when we discovered that, across demographic segments, all our customers are health-conscious.''

The attribute rubbed off easily on biscuits. Since mothers prefer baked products as a snacking option for their children, positioning Britannia biscuits on the health platform didn't erode the brand's value; it enhanced it. It was a repositioning that did not have any intrinsic boundaries either. Claims Puri: ''With the health plank, Britannia could enter other markets too.'' After zeroing in on the attribute, it was a short step for Alagh and his team to work out the precise positioning of the mother brand: Eat Healthy, Think Better.

Apart from re-positioning each one of its biscuits brands on the new platform, Britannia also used combinations of price and appeal-the two elements of consumer behaviour-to straddle every segment of the market, challenging all levels of competition. In a sense, it is the Levers model in detergents that Britannia is emulating. Like it, Britannia has addressed a wide range of price-points: from Re 1 for a sachet of Tidbits to Rs 12 for a 10s pack of Good Day Pista Badam cookies to Rs 15 for 100 gm of Cheezlets.

Similarly, Britannia has straddled the spectrum of segments with different product-benefits. Explains Vikram Kaushik, 47, Vice-President (Marketing & Exports), Britannia: ''We have incorporated relatively new segmentation tools like Age Cohort Analysis, moments of consumption et al. Broadly speaking, each brand cluster offers specific benefits to the customer.'' All of which only reinforce the mother brand's new platform too.

Positioning Perspectives
Remember the product-usage axiom: it isn't what she uses that is important. It's when and where. To a company aiming to be a snack-foods and dairy major, this meant that the customer could be expected to use any of its products in a variety of contexts: meal-times, snack-times, even while cooking. And the usage could be just about anywhere in the country: in a town with a population less than 1 lakh or a metropolitan city with a population of 20 lakh. For Britannia, meeting these demands meant creating products for every possible usage-occasion, and a distribution reach that made the product available within arm's reach of desire.

Britannia's revamped biscuits range covers a variety of benefits. At the low-end price-points targeting the mass market, Tiger Glucose (Rs 5 for a 100-gm pack) and Tiger Cashew Badam (Rs 6 for 75 gm) are positioned as healthforce biscuits. Consumer research showed that good health is the overwhelming objective when mothers choose snacking options for their children; it also revealed that mothers are aspirational for their children. Adds Kaushik: ''So, the selling line for Britannia Tiger was Jam Ke Khao, Kuch Ban Ke Dikhao (Eat Lots, Become Something). The proposition repositioned our brands, and brought a contemporary feel to the advertising.''

That was necessary because this is a volumes segment, where Britannia's presence was negligible. Earlier, Britannia had vacated it, leaving it to its biggest adversary, Parle Products' Parle-G biscuits. Glucose biscuits account for half the volumes of the organised sector, with the highest penetration-levels across categories. It is also the fastest-growing, clocking a growth of 10 per cent per annum. Ten years ago, Britannia had addressed this segment with Glucose D and Circus, but its attempt to focus on 2 brands instead of one didn't take it anywhere.

Admits Alagh: ''We didn't pay much attention to glucose biscuits because it was regional, and had low profits potential. Moreover, the strategy used to counter Parle-G became a me-too approach. This has been corrected with Tiger.'' Indeed, the new brand has been a roaring success. Within a year of launch, Tiger Glucose and Tiger Cashew have, together, achieved a turnover of Rs 100 crore and a marketshare of, according to the company, 30 per cent in the glucose biscuits segment.

Next, Britannia focused on its core biscuit brands-like Marie, Thin Arrowroot, and Milk Bikis-which were facing competition from similarly-branded alternatives like Bakeman's English Marie, Milka Biscuits, and Priya Marie. To stay ahead of the pack, Britannia differentiated its brands by not only bringing them under the Eat Healthy, Think Better banner, but also gave them clearly-defined positionings. For Milk Bikis, targeted at children, Britannia launched variants like Milk Bikis Funland, which are animal-shaped biscuits. Marie was rechristened Marie Gold, and positioned as a tea-time biscuit. And Thin Arrowroot was renamed Jacob's Thin, with its position as the low-calorie health biscuit reinstated.

Finally, in January, 1999, Britannia relaunched another set of its brands-Thinlite, Cream Cracker, and Digestive-under the Nutrichoice umbrella. Targeting the fast-growing health-conscious segment, these biscuits were relaunched on a low-calorie, high-nutrition platform. The repositioning, says Alagh, has strengthened these brands, and broadened the range to cover several price-points and consumer segments.

For instance, Britannia has been quick in catching the uptrend in impulse category snacks, like chips and chocolates. Recognising this trend, Alagh targeted the under-24 urban consumer with trendier products like Little Hearts, Pure Magic, and Chekkers, positioning them with statements they identify with: Direct Dil Se for Little Hearts, Full Of Taste And Fun for Pure Magic, and For The Ups And Downs In Life for Chekkers.

Recently, Britannia has even launched Snax, a line of ethnic snackfoods in 3 variants: Calcutta Ka Chana Choor, Bikaner Ka Bhujiya, and Rajasthan Ka Aloo Bhujiya. Healthy snackfoods? Well, yes, because these products are baked by Britannia-not fried. Alagh claims that Britannia is using low-fat oils and hygienic processes to reinforce the brand's core attribute in a category not typically associated with health.

Britannia is gung-ho about its repositioned biscuit brands. Gloats Alagh: ''It would not be out of place to mention that, in biscuits, Groupe Danone is the world's No. 1 brand. And we are India's No. 1. While we would not like to underplay the strengths of our competitors, it is also true that other than the British biscuit-maker, United Biscuits, which owns the McVities' brand, the business is alien to all the other new entrants.''

To boost volumes, Britannia has also revisited its packaging strategy. Taking a leaf out of the book of the FMCG majors, Alagh launched biscuits in small sachets last year. Low-priced sachets brought its biscuits, like Tiger Tikis-nibblets priced at Re 1-to the mass market. Simultaneously, a revamping of its distribution channels has taken place. Britannia has, over the last 4 years, increased its retail distribution network from 250,000 to 1.20 million outlets. Between 60 and 70 per cent of the new outlets are in the rural and semi-urban markets-a break with the past, when Britannia's distribution was distinctly skewed towards urban India.

To increase its penetration, Britannia is now pushing a bigger range of its products at each outlet. Using the low-priced Tiger brand as the vehicle, what were previously urban brands, like Marie Gold and 50-50, are now travelling down the population strata. In what it calls Operation Storming to boost rural growth, Britannia has gone the HLL way by putting up wall-paintings, and participating in fairs and festivals. Such efforts are paying off. In 1997-98, Britannia's volumes grew by 16.50 per cent-more than double the 7 per cent rate at which the industry grew. And Alagh says he wants to clock 50 per cent higher growth than the market every year.

Beyond Biscuits
A customer who buys Benetton isn't really buying a T-shirt; she's buying attitude. It didn't take long for the born-again Britannia to realise that its customers weren't really buying biscuits; they were buying health, nutrition, and food. The rest was easy. If it was nutrition-not biscuits-that the customer was buying when she bought Britannia, why not extend the brand to other markets where the customer looked for nutrition in every purchase?

While the bulk of Britannia's turnover comes from biscuits, Alagh has food on his mind. Forty-five years ago, Britannia first diversified by launching bread, marketing Premium Bake in a few cities. It wasn't unrelated. Like biscuits, bread and cakes are bakery products, but their distribution logistics vary. Bread needs a daily distribution system-unlike biscuits-and setting up such channels throughout the country is tough. Local bakeries rule the roost, being able to manage the logistics of a smaller geographical area.

True, big players like Britannia can forge alliances with franchisees, but the margins in the business are slice-thin and, for a player with big overheads, sharing them is not viable unless the volumes are huge. That's why Britannia bread hasn't really taken off. Its presence is restricted to Delhi and Mumbai, where it is just one of the average of 10 brands that sell in each city. But Alagh sees the business as a base for his forays into other categories-like milk. Says he: ''The uniqueness of our bread business is its daily-distribution system. In the future, it should be possible for us to leverage this key strength.''

This has not deterred Britannia from thinking afresh. Says Chairman Nusli Wadia, 54: ''It is our strategic decision to be a comprehensive foods and beverages company, offering the consumer health and nutrition. We already are the leaders in baked goods. In the last few years, we have launched dairy-products, like cheese, dairy-whitener, flavoured milk, and butter too.'' It wasn't a coincidence that the repositioning exercise came when Britannia was hatching an extension into dairy products.

Cheese and butter fit well with the health platform. Agrees Rajat Sabharwal, 30, Research Analyst, Kotak Securities: ''The clubbing of the repositioning exercise and the diversification into dairy-products has helped Britannia accelerate its transition from being a biscuit-maker to a foods-marketer.'' That was precisely the idea. Explains Alagh: ''A key reason for re-engineering the brand was not only to make it more contemporary and robust, but also more stretchable.''

The big stretch took place when, in November, 1997, Britannia debuted in the dairy products market with cheese. In just two years, it has grabbed a 35 per cent share. Market-leader Amul is way ahead with 60 per cent, but, for a newcomer, Britannia has done well, overtaking older brands like Verka and Vijaya. However, Britannia's swift success may have been due to skewed market dynamics.

Says R.S. Sodhi, 40, Assistant General Manager (Marketing), GCMMF, the marketers of the Amul brand: ''Britannia found it easy because there was a gap between demand and supply. Now that we have increased our capacities and, thus, supply, it won't be a problem.'' Nevertheless, Britannia enjoys an edge: its distribution network covers 5 lakh retail outlets through 1,400 distributors, giving it an extensive channel to pump its products into the market. In contrast, Amul distributes through a wholesale channel, where sales are, essentially, driven by consumer pull.

Cheese was followed by butter, and, now, Britannia has launched flavoured milk, sub-branded Zip Sip, in tetrapaks. On the cards could be yoghurt and other dairy products. Although Britannia's business plan could be bang on, volumes may pose problems because it has targeted the top end of the market. Argues Rajeev Bakshi, 45, CEO, Cadbury India: ''There is no problem with Britannia's plan. The issue is what part of the business it wants to focus on. It has gone through the value-addition route, and will now have to generate critical mass.''

That's why Alagh is exploring the possibility of entering the milk market, where the margins may be low, but the volumes are high. Britannia wants to do in dairy products what it has done in biscuits: cover all segments. ''As with other large markets, we will seek to segment the market for dairy products too. This could mean that our portfolio will include premium brands, with a high degree of value-addition, as well as popular-priced brands that could add critical mass,'' says he.

The value-added dairy market that Britannia has targeted is a minuscule 0.10 per cent of the market. While the size of the cheese market is a piffling Rs 140 crore, it is growing at 20 per cent per annum. The Rs 400-crore butter market is growing at 10 per cent a year, and Amul-the only national butter brand-has a 85 per cent share. The Rs 350-crore dairy-whitener market is growing at 10 per cent a year, but large brands like GCMMF's Amulya (marketshare: 45 per cent), Nestle's Everyday (32 per cent), and HLL's Milkana (14 per cent) dominate it. To break into their domain, Britannia has priced its brand, Britannia Dairy Whitener, 14 per cent cheaper than Everyday.

Success in dairy products will depend not just on gaining marketshares. Explains Hozefa Topiwala, 27, an analyst with First Global India Research: ''These markets are small today. Britannia's success will depend on its ability to accelerate their growth.'' Alagh takes a pragmatic view of the competition, where the towering presence of Amul is daunting. ''The basis of our entry is the future size of the market. Amul may be the largest player in the dairy market, but is not necessarily the most profitable.''

Britannia's diversification isn't out-of-the-box; it reflects its parent's portfolio. Ever since it got control of Britannia, Danone has been providing it technology in biscuits and pastries. More important, its biggest business is dairy: dairy products account for 44 per cent of its turnover, and biscuits, 20 per cent. Which is driving Britannia's diversification. In contrast, dairy products account for a meagre 4.50 per cent of Britannia's turnover. But that is going to change. Reckons Alagh: ''In the next 3 years, we expect new businesses (read: dairy products) to contribute about a quarter of our turnover.''

Calibrating Costs
Britannia is in investment mode, spending on brand-building, marketing, and promotions. Like most FMCG marketers, it manufactures only a small proportion of its output. In biscuits, it outsources 65 per cent of its output from small third-party contractors, who have inherent cost advantages. This also cuts distribution costs as the suppliers are dispersed across the country.

Yet, Britannia's marketing costs are soaring. In 1996-97, it spent Rs 29 crore on advertising, but, in 1997-98, when its foray into dairy products gathered momentum, adspend shot up by 81 per cent to Rs 52.52 crore. Since the paybacks from its new businesses are expected only 2-3 years down the line, what does it mean for Britannia's bottomline? Fortuitous for Britannia are its healthy financials.

In 1998-99, the company's net profits, at Rs 39.60 crore, grew a healthy 37 per cent while sales touched Rs 1,030 crore-up 21.50 per cent. The biscuits business is the cash-cow that will fund its new businesses. Unlike other transnationals, which remit large dividends to their parents, Britannia has been conservative: in 1998-99, its payout ratio was 35 per cent. Plus, the company has managed its treasury wisely, investing in government securities, mutual funds, and debt, and keeping its cost of borrowed money at 5 per cent.

Britannia's risks are not financial. Instead, they are in the marketplace. Alagh is confident about becoming a mass marketer in foods. Says Alagh: ''We want to be a part of our consumer-at home, out of home-a natural part of his life. Consume the product of your choice, but consume Britannia.'' That may not be easy.

Not only is the dairy business tough in terms of logistics, the margins are low. Even a juggernaut like HLL is planning to hive off its dairy portfolio. Says S. Raghunath, 43, Professor (Corporate Strategy & Business Policy), IIM-B: ''How successfully Britannia is able to build cost and logistics efficiencies will determine its ability to fight the competition. If it is not able to get its calculations right, it will be tough. This is going to take some work on their part.''

Competition doesn't seem to faze Britannia's socialite CEO. Nor does the size of his competitors. Declares Alagh: ''My personal commandment is, Do Unto Others What You Don't Wish Done Unto You. It's not the big who swallow the small; its the fast who swallow the slow.'' Since it has taken 8 decades for the company to learn that lesson, Britannia will, hopefully, market better-and think faster-in future.

--additional reporting by Dilip Maitra

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