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Food Industry
India is the second largest producer of food and holds the potential to be the biggest on global food and agriculture canvas The Indian food industry comprises of food production and the food processing industry. The food processing industry is one of the largest in India it is ranked fifth in terms of production, consumption, export and expected growth.
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Introduction
Britannia industries limited is an India based company. The company operates in two segments Bakery products and dairy products Biscuits accounts for 65% of the companys revenues Britannia is one of the India's biggest brand and pre-eminent food brand in the country
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History of Britannia
In 1892, a biscuit company was started in a small house in Calcutta (now Kolkata). By 1910, with the advent of electricity, Britannia mechanized its operations. 1921, it became the first company east of the Suez Canal to use imported gas oven. 1935-1945 A large part of the Company's production was diverted to war effort on account of World War II. In 1979 the name of the company changed from the Britannia Biscuit Co., Ltd., to Britannia Industries Ltd. In 1992 company launched new products like little hearts which carved a niche in the market
Milestone
Year
1892 1918 1979
Milestone
Started with an investment of Rs. 295/- in Kolkatta Britannia Biscuit Company Ltd. (BBCo) was launched BBCo was rechristened as Britannia Industries Ltd. Wadia group aquired a stake in ABIL, UK & became an equal partner in BIL with Groupe Danone Corporate re-branding exercise gave rise to philosophy of Eat Healthy, Think Better Britannia Khao World Cup Jao A major success! Profit up by 37% Britannia becomes one of Indias biggest brands Britannia Lagaan Match Most successful promotional activity of the year Rated one amongst the top 200 small companies of the world by Forbes Global Indias 2nd most trusted brand Economic times Britannia accorded the status of being a Superbrand Volume crosses 300,000 tonnes Company goes in for major expansion Uttranchal plant commissioned ahead of schedule
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2001
Milestone
Year Milestone
Britannia re-launched NutriChoice Hi-Fibre Digestive biscuits in an international large sized biscuit pack. Britannia acquires 51% stake in Bangalore-based bakery foods retailer Daily Bread.
2006
2007
Britannia industries formed a joint venture with the Khimji Ramdas Group and acquired a 70 percent beneficial stake in the Dubai-based Strategic Foods International Co. LLC and 65.4% in the Oman-based Al Sallan Food Industries Co. SAOG. Britannia NutriChoice Sugar Out range introduced - 1st of its kind of biscuits to be be launched in India with "No Added Sugar" (Variants - Chocolate Cream, Orange Cream, and Litetime)
2008
Britannia NutriChoice 5 Grain biscuits launched - Biscuits with the goodness of 5 health Cereals, and sweetened with Natural honey. Britannia Nutrichoice promised consumers "Bhook Bhagao, Kuch Healthy Khao" Britannia launched Iron fortified 'Tiger Banana' biscuits, 'Good Day Classic Cookies', Low Fat Dahi and renovated 'MarieGold'.
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Milestone
Year Milestone
Britannia takes full control of Daily Bread. Britannia Industries buys out New Zealand's Fonterra from existing dairy joint venture, Britannia New Zealand Foods (BNZF). BNZF became a 100 per cent Britannia subsidiary and was renamed Britannia Dairy Private Limited (BDPL). Wadia Group acquired stake holdings from Group Danone and becomes the single largest shareholder in BIL. Britannia was presented the Master Brand 2010 Award by CMO Council in November 2010. Rotary Club of Chennai awarded CSR Award to Britannia in November, for our work in nutrition.
2009
2010
2011
Britannia received the Most Respected Company Award 2011 from Businessworld. Bourbon received the Most Popular Confectionery Product Preferred By Youth (Biscuit) Award. IMCRBNQA (Indian Merchant Chambers Ramakrishna Bajaj National Quality Award) conferred the Manufacturing Performance Excellence Trophy a National Quality Award for the 2010 cycle, for Britannia Corporate Office (Bangalore), Britannia Industries Ltd. (Rudrapur) and Sunandram Foods Pvt Ltd (Mangaldoi, Guwahati).
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Food Segments
Bakery Products:
Dairy Products:
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Britannia Products
Cakes - Barcake Orange - Barcake Chocolate - Veg Cake - Chunk Cake Pineapple - Chunk Cake Berry Cherry - Chunk Cake Fruit - Cup Cake Vanilla - Cup Cake Berry Cherry - Cup Cake Cashew - Cup Cake Orange - Barcake Milk - Barcake Butter Sponge - Barcake Pineapple Daily Fresh Breads & Rusk - Nutri-soft Vitamin Enriched - Nutri-soft Premium Sandwich - Whole Wheat - Suji Toast Dairy products Cheese - Cheese Slice - Cheese Spread - Cheese Cube - Cheddar Cheese Dahi - Daily Fresh Dahi - Daily Fresh Low Fat Dahi Flavoured Milk - Actimind Mango - Actimind Strawberry Dairy Whitener Butter
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Biscuits
Glucose Biscuits
- Tiger - Chota Tiger - Tiger Chai Biskoot - Tiger Rosemilk Cream - Tiger Brita Energy Pops - Tiger Chocolate Cream - Tiger Orange Cream - Tiger Coconut Energy - Tiger Elaichi Cream - Tiger Kesar Cream - Tiger Banana
Cream Biscuits
Treat Choco Gelo Treat Delicious Dates Treat Apple Punch Treat Flavoured Tangy Orange Treat Strawberry Flavoured Surprise Bourborn Treat Treat Elaichi Fon Treat Jim Jam Treat Mango Mischiet Treat Masti Orange Treat Pineapple Prank
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Biscuits Contd
Marie Biscuits - Marie Gold - Vita Marie Gold Milk Biscuits - Milk Bikis - Milk Bikis Cream Good Day Biscuits - Good Day Choconut - Good Day Butter Scotch - Good Day Honey & Raisin - Good Day Choclate Chip - Good Day Rich Butter Cookies - Good Day Rich Cashew Cookies - Good Day Rich Pista Badam
Nutri Choice Biscuits - Nutri Choice 5grains - Nutri Choice Digestive - Nutri Choice Cream Cracker - Nutri Choice Thin Arrowroot - Nutri Choice Sugarout Chocolate - Nutri Choice Sugarout Litetime - Nutri Choice Sugar Out Orange Cream 50-50 Biscuits - 50-50 - 50-50 Maska Chaska - Pepper Chakkar Little Hearts - Little Hearts Classic Pure Magic Nice Time Time Pass
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Products
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Market Share
Products
Biscuits Breads Dairy Cakes
% Share
85 6.5 2 4.5
Others
2.5
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BREAD: Category despite being a low-margin market its presence is a logical extension of its expertise in bakery products
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Targeted basically on kids. Positioning is done for modern mothers. Has become the mass-market face of Britannia symbolizing fun and energy in both urban and rural India. Lower price and smaller packs targets for people with relatively lower income group. With this product Britannia also captured a huge proportion of rural market of India.
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LittleHearts Only type of snack biscuit in the market. A wafer biscuit with sugar coating. Targeted towards the growing youth segment. A completely unique product, the first time biscuits were retailed in pouch packs like potato wafers.
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Good Day Britannia Good day started premium biscuits enriched with cashew , butter, badam pista, etc. (1986)
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Consumers across all ages. Amongst the fastest growing brands in Britannia's portfolio and is today the market leader with almost 2/3rd share of the market. Targets higher income group.
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Milk Bikis The only biscuit with milk flavored cream, makes it the most different product in front of its key competitors.
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Targeted towards kids who may dislike drinking milk Trusted by mothers as a source of growth energy of milk Integral part of their children's nutrition regimen.
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Marie The oldest brand of Britannia. The no.1 in its category. With a bigger packaging size it targets for the families having more no. of people. Also gives a family like moderate taste.
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50-50 Snack biscuit. Launched in 1993. Came with a flavor of Maska Chaska as a difference. Covers 1/3rd of the market share. Pricing with a bit higher than Tiger it actually uses the concept of namkeen biscuit or in other words snacks.
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Targets the children and uses a concept of celebration. As at the time of celebrations, amongst the children, biscuit is an important issue. Targets the occasion as well as the minor group of their potential market.
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SWOT Analysis
Strengths
Brand Name Market Leadership Product Innovation Strong Distribution Network Promotional Activities Celebrity Endorsements
Weakness
Could not control flourish of competition Could not diversify Unable to strengthen market leadership
Per capita consumption in Ind2.55 Kg,developed countries-12Kg Increasing Disposable Income Export Opportunities Diversification
Losing out to other fast food items Increasing cost of raw material Regional and national competition Price sensitive consumer
Opportunities
Threats
BCG Matrix
Stars
High Market growth Huge market share Huge cash generation Huge cash consumption Huge investments in growing market Becomes cash cows when market growth rate declines
CASH COWS
Low market growth High market share Leader in mature market Larger cash generation than consumption Low prospects for future growth so no new investment in this category Investment into Stars and Question Marks
Question Marks
High market growth rate Low market share Lower cash generation than cash consumption Analyze the market situation carefully Investment into high growth potential market Critical decision making for managers
Dogs
Low market growth rate Low market share Very low cash generation and consumption Also known as cash Traps Should be sold off or liquidated
Porters Analysis
Suppliers Power
Buyers Power
Competitive Rivalry
Threat of Substitutes
Threat of Entrants
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Customer service
Customer service is the provision of service to customers before, during and after a purchase Britannia customer services is
Personal promise Organizational commitments Common Expectation
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Advertising
Advertising is the means of informing as well as influencing the general public to buy products or services through visual or oral messages. Mode of Advertisement
T.V., radio, websites, newspapers, magazines, billboards, hoardings etc.
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BRITANNIA ADVERTISING
In FMCG Business is Marketing And Marketing is Branding and Advertising Objective of Britannia Ads Mind share
Jingle
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The 5 Ms Of Advertising
Measurement in 2000 among top 300 forbes co. and increases sales of 37%
Message-Zindagi main life
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Profit & Loss account (in Rs Cr) Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit
Britannia 4,245.98 32.59 4,213.39 58.82 18.21 4,290.42 2,789.23 29.55 119.93 340.87 0 728.05 4,007.63 223.97 282.79 40.08 242.71 44.59 0 198.12 -12.35 185.77 40.5 145.29
Agro Tech 718.69 0 718.69 23.85 -4.27 738.27 523.74 1.7 30.52 12.67 109.96 8.11 686.7 27.72 51.57 0.32 51.25 4.6 0 46.65 0.46 47.11 15.32 31.78
Dabur 3,305.42 30.99 3,274.43 39.16 78.31 3,391.90 1,740.68 42.39 230.84 25.21 589.09 100.15 2,728.36 624.38 663.54 12.93 650.61 37.73 16.6 596.28 0.25 596.53 124.85 471.41
Nestle 6,382.78 122.57 6,260.21 28.53 83.67 6,372.41 3,168.18 219.2 433.44 110.91 1,013.72 145.08 5,090.53 1,253.35 1,281.88 1.07 1,280.81 127.75 0 1,153.06 0 1,153.06 326.45 65 818.66
Profit & Loss account Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax
Amount Mar '10 3,424.58 23.27 3,401.31 -44.19 21.45 3,378.57 2,197.74 22.38 99.52 304.86 513.99 80.21 3,218.70 204.06 159.87 8.21 151.66 37.54 114.12 6.65 120.77 4.27
Amount Mar '11 4,245.98 32.59 4,213.39 58.82 18.21 4,290.42 2,789.23 29.55 119.93 340.87 0 728.05 4,007.63 223.97 282.79 40.08 242.71 44.59 198.12 -12.35 185.77 40.5
% Change
23.99% 40.05% 23.88% 233.11% -15.10% 26.99% 26.91% 32.04% 20.51% 11.81% -100.00% 807.68% 24.51% 9.76% 76.89% 388.19% 60.04% 18.78% 73.61% -285.71% 53.82% 848.48% 66
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Balance Sheet (in Rs Cr.) Total Share Capital Equity Share Capital Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities
Britannia Mar '11 23.89 23.89 427.41 451.3 407.76 23.68 431.44 882.74 593.56 289.86 303.7 11.69 545 311.2 57.27 28.75 397.22 228.24 0 625.46 383.76 219.33 603.09 22.37 0 882.76 259.63
Agro Tech Mar '11 24.37 24.37 153.11 177.48 0 0 0 177.48 69.81 20.22 49.59 18.48 1.4 67.39 35.11 7.57 110.07 56.53 37.17 203.77 89.02 6.73 95.75 108.02 0 177.49 77.91
Dabur Mar '11 174.07 174.07 927.09 1,101.16 17.57 235.78 253.35 1,354.51 766.88 269.32 497.56 11.92 519.23 460.58 202.46 26.08 689.12 461.81 166.33 1,317.26 539.05 535.36 1,074.41 242.85 82.95 1,354.51 1,075.89
Nestle Dec '10 96.42 96.42 759 855.42 0 0 0 855.42 1,854.70 841.96 1,012.74 348.91 150.68 575.95 63.29 19.45 658.69 200.17 235.84 1,094.70 843.68 907.94 1,751.62 -656.92 0 855.41
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Balance Sheet in Cr Sources Of Funds Total Share Capital Equity Share Capital Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Current Liabilities Provisions Total CL & Provisions Net Current Assets Total Assets Contingent Liabilities
Amount Mar '10 23.89 23.89 396.25 408.1 21.51 429.61 825.86
Amount Mar '11 23.89 23.89 451.3 407.76 23.68 431.44 882.74
% Change
547.83 266.33 281.5 11.64 490.64 268.34 39.49 18.11 325.94 221 5.25 552.19 345.08 165.02 510.1 42.09 825.87 318.67
593.56 289.86 303.7 11.69 545 311.2 57.27 28.75 397.22 228.24 0 625.46 383.76 219.33 603.09 22.37 882.76 259.63
8.35% 8.83% 7.89% 0.43% 11.08% 15.97% 45.02% 58.75% 21.87% 3.28% -100.00% 13.27% 11.21% 32.91% 18.23% -46.85% 6.89%
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Ratios
Britannia
Agro Tech
Dabur
Nestle
Mar '11
Liquidity And Solvency Ratios
Mar '11
16.68
Mar '11
Dec '10
1.1 0.56
2.21 1.42
1.02 0.78
0.6 0.24
1.9
--
0.75
--
1.9
--
0.52
--
4.59
222.71
29.44
666.25
1.9
--
0.75
--
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Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio 16.71 59.84 10.67 27.16 7.03 17.21 11.61 93.68
16.71
5.05 5.52 5.05
11.81
10.3 4.05 16.31
7.03
3.67 2.46 3.67
11.61
3.24 9.75 3.24
Profit & Loss Account Ratios Material Cost Composition in % Selling Distribution Cost Composition in % Expenses as Composition of Total Sales 66.19 13.84 72.87 11.05 49.94 16.78 48.21 10.04
94.39%
95.55%
82.54%
0.797541 72
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Operating Activities
27,60,156
23,77,257
Investing Activities
(11,38,865)
(4,20,997)
Financial Activities
4,75,339
3,73,176
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75
198.14
243.15
1036.82
-42.39
338.61
Ratio Analysis
Ratios Net Profit Margin Return on Investment Gross Profit Margin (%) Operating Profit Margin (%) Return on Capital Employed EBITDA (%) Ev/EBITDA ROA (%) Sales/fixed assets Mkt cap/Sales Fixed Capital/ Sales Ev/Net sales PE ratio (x) EPS Dividend payout BV per share Britannia 3.4 24.06 3.78 5.19 21.48 5.46 16.51 17.01 7.44 1.05 0.13 1.15 36.05 14.82 62.1 37.78
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4409.3
443.85
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80
81
4000
3500 3000 2500 2000 1500 1000 500 0
130
120 110 100 90 80 70 60 50
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Cost of capital= risk free rate + ( market rate risk free rate) 12% Value of the firm= FCFF/(1+WACC)^t 4435.842 crs
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