Britannia targets 50% sales from rural markets in 4 years
What's the story
Britannia Industries, the company behind popular brands like Good Day and Tiger biscuits, is looking to increase its presence in rural markets. The company's Vice Chairman and Managing Director, Varun Berry, said that they expect half of their domestic sales to come from these areas in the next three to four years. Currently, about 40% of Britannia's sales come from rural markets.
Market shift
Direct distribution to ensure continuous product stream
Berry highlighted that the rural market is "very important" for Britannia, with double-digit growth in the April-June quarter. The company is now focusing on direct distribution to ensure a "continuous stream" of products in these remote areas. He also said that rural markets are growing faster than urban ones, a trend that is likely to continue in the coming years.
Expansion strategy
Same aspirations in rural markets as urban ones
Britannia currently directly reaches around three million retail outlets across India. The company plans to expand this number by about 100,000 outlets every year. Berry said that rural consumers now have the same aspirations as urban ones and want access to high-quality biscuits. He emphasized the importance of expanding distribution reach, especially in small markets like villages with less than 3,000 people.
Urban challenges
Impact of rising real estate prices on urban market
Berry acknowledged that the urban market has been affected by rising real estate prices and rentals. However, he hopes that recent GST changes will provide some relief to consumers. Despite these challenges, Britannia has reported "very high single-digit" growth from the urban market through general trade (Kirana stores), modern trade (retail chains), and e-commerce platforms.