You have to be aware of the past to figure out what to do in the future, says Vinita Bali, who took charge at Britannia when it was down and turned it around
Name: Vinita Bali
Profile: Managing Director, Britannia Industries
Age: 56
Why She Won For transforming a stodgy old biscuit company into a fast growing food brand in the face of tough competition and galloping commodity prices. She has also developed a track record that has made her a role model for women executives.
I was not looking to come back to India. My mother had had a stroke and that for me changed many things. So, I said yes to Britannia in 2005. We’ve all grown up with Britannia bread and biscuits and have a certain affinity to the brand.
I have always made career choices which are unconventional. In 1992, I went to Nigeria when very few people, especially single women, would have dared to go. After that, I went to South Africa. For me, the greater the challenge, the more ambiguous the situation, the greater is the joy.
The history of Britannia didn’t bother me; you can’t drive looking in the rear view mirror, you have to look at the road ahead. I couldn’t change the past, I just needed to be aware of it to figure out what to do in the future.
I did what I had done three times before in my career, the tried and tested. I re-focussed the energy of the company to say winning and losing is only with the consumer. The consumer pays our salary, so we’ve got to get focussed on the consumer. Before 2005, when I took over, the trajectory of growth was between 7-9 percent. From 2005 to now, that trajectory is 22 percent plus. What I’ve found in every country I’ve worked in and every job that I’ve done, is that nothing works like success. People are cynical initially, but once you are successful, they get addicted to it.
Being a consumer facing company, everything rested on what we wanted to do with our brands. The first thing we said is, all of our brands are not equal. So, we created six power brands: Tiger, Treat, Good Day, Marie, Milk Bikis and 50-50. Second, we changed how we think about biscuits. It’s not something my mother buys for consumption at home. What if we were to say biscuits can be consumed anywhere, anytime, by anybody? What would we do differently? That set in motion a whole different way of thinking.
We started looking at railway stations, interstate bus terminals and even BPOs. It wasn’t about segmenting the consumer, it was segmenting the opportunity.
The third thing we did was look at innovation. For a long time, Britannia had hardly launched any new products. It was the same brands that were available in the same format. For a company like ours innovation has to be the driver of our growth.
We’ve done two things. One, we’ve taken each power brand and made it more significant. So, Tiger today is not just a glucose biscuit, it’s glucose and coconut, and cream and cookies, it’s also a drink [TigerZor choco milk and TigerZor badam milk].
The big insight was that a power brand has the power to encompass within its proposition a large number of product formats, be it a biscuit or a drink. We lay a big bet behind a small brand called NutriChoice, which used to be a thin arrowroot biscuit, but through innovation we drove it to a high fibre, then to a five grain, then to a cream cracker and ultimately to a diabetic-friendly biscuit. So, Good Day today has a choco chip, a choconut and we’ve added a lot more variants to it. Marie today is Vita Marie, Vita Marie with micro nutrients, it also has oats and honey and so on and so forth.
I think what we cracked in the process was business with a conscience and performance with purpose. We were the first and only company that said we’re going to remove transfats from all our products. We are the only company that said we’re going to add micro nutrients because food-based solutions to undernutrition have worked in other parts of the world. And we did it without charging a high price to our consumer.
The big challenge we have right now is profitability. Commodity costs have played havoc. Till 2005-2006, one commodity went up, but the others were more or less OK. But 2006 onwards, the whole commodity environment around the world has changed.
This business is far more sensitive to a larger number of commodities. In Coke we’re not dealing with any commodity, except for PET or sugar. In Cadbury, it was price of sugar, cocoa or milk. In our business we are dealing with cereals, sugar, milk and fats. And they are going up simultaneously. So, earlier my experience was that you dealt with one or two commodities. In Cadbury, we had 70 percent of the market, so you pretty much decided what you want to do. This industry is very competitive and till the mid ’80s was reserved for the small scale.
There are 433 brands of biscuits tracked by Nielsen; imagine the ones that are not tracked. Also, don’t forget that we’re the only listed company in this very competitive market.
We’re dealing with big and small, local and national players, who are unlisted, and that puts a different kind of pressure.
Please remember I came from companies like Coca-Cola and Cadbury, which are high-margin businesses and not so cost sensitive. This business is very sensitive to cost. It forced us to look at costs differently because we have to be competitive in an industry that is dominated by large number of small and local players. Here we are dealing with more than 500 entrepreneurs and we can’t change pricing. So, to that extent the challenges are more…and I wouldn’t be sitting here if I didn’t enjoy it.