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Namrata Singh
Mumbai, Feb 3: Britannia Industries Ltd, the Rs 824-crore bakery products major, plans to beef up its distribution network with a major thrust on the rural market. The company, which is currently perceived to have an urban bias with the urban market contributing almost 70 per cent to the sales, plans to tap the rural market in a major way.
Britannia Industries Ltd managing director & CEO Sunil K Alagh told The Financial Express: ``By the year 2001, the company would double its distribution network from the current level of four lakh retail outlets to eight lakh outlets. Of the eight lakh outlets, 60 per cent would be in the rural market.'' The current rural spread for Britannia, is 50 per cent of the total strength of four lakh outlets i.e. two lakh outlets. Within a span of two years, the rural spread would double to four lakh outlets.
``We see a major growth potential in the rural market, which is expected to witness large investments from FMCG giants like Hindustan Lever. A major part of Britannia'sfuture growth contribution will come from the rural market,'' says Alagh.
Alagh, who is very optimistic on the growth potential of the Indian rural market, says that the success of `Tiger', the popular biscuit brand launched by Britannia in July 1997 in the glucose category, is largely on account of the brand's acceptance by consumers in the rural market.
Britannia, which revamped its products to focus more towards premium categories in biscuits, is a leader in the Rs 2,000 crore branded biscuits market in India with a share of around 38 per cent. Close on the heels to Britannia is Parle Foods with a share of around 30 per cent, according to industry estimates. Britannia's share in the overall Rs 4,000-crore biscuits market is roughly 14-15 per cent, while that of Parle is 10 per cent.
Biscuits contribute the maximum (72 per cent) to Britannia's turnover. Dairy products is next in line with a contribution of 20 per cent.
The doubling of the distribution network, which will lead to a greaterpenetration for Britannia brands, will have a positive impact on the market share of the company across product categories and this is likely to appreciate, feel industry analysts.
Analysts feel that the contribution from dairy products business to the turnover is likely to grow in the near future while that of biscuits expected to fall. Alagh concurs: ``The contribution from Biscuits will certainly fall with the dairy products contribution to the sales going up.''
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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