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    Britannia Q3: MD Varun Berry says company will ramp up product launches, strengthen distribution

    Britannia Q3: MD Varun Berry says company will ramp up product launches, strengthen distribution

    Britannia Q3: MD Varun Berry says company will ramp up product launches, strengthen distribution
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    By Shilpa Ranipeta   IST (Updated)

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    Britannia continued to see robust rural growth, while modern trade and institutional trade remained muted

    As consumer demand slowly picks up, snacks and biscuit maker Britannia is set to step up innovation, distribution and brand visibility.
    Britannia, which posted a 18.9 percent growth in operating profit and 6 percent growth in revenue for the October-December 2020 (Q3 FY21) quarter, said the launch pipeline for the quarter was muted as the company focus on ensuring availability of its products.
    However, going ahead, the company will be looking at new launches and categories, Britannia's Managing Director Varun Berry said during the earnings call on Monday.
    During the quarter, the company continued to see a robust growth in general trade and rural growth, while modern trade and institutional trade remained extremely muted. Berry said that trains, which have been a big consumption point for Britannia, were muted but are expected to pick up now.
    While the launch pipeline was muted, Berry said that the marketing activity has picked up pace and has returned to normalcy now. This coms as the company ramps up its advertising and marketing activities, which took a backseat over the past two quarters due to uncertainty on account of the COVID-19 pandemic.
    In terms of geographies, Berry said that the international business performed extremely well. While there was some pressure in the Middle East and Africa, the growth in these markets is returning to a healthy pace.
    The bakery segment too saw robust growth led by an improvement in bread profitability, while cheese registered a double-digit growth in the dairy segment. Lower milk prices also helped profitability in the dairy segment in Q3, along with a recovery in the drinks portfolio.
    As with other consumer companies, Britannia is also facing inflationary pressures on the back on a 25 percent inflation in red palm oil prices and prices of milk, which have started to increase. However, other raw materials such as wheat and sugar continue to remain under control.
    For FY21, Britannia’s capital expenditure is expected to be at 60 percent of its usual spend, which comes up to about Rs 200 crore. However, for FY22, the company said that it will review its capacity, and demand outlook and decide on spends accordingly.
    Berry also said during the earnings call that the company will soon publish its Environmental, social, and governance (ESG) report outlining its work on that front. Giving an update from last quarter, Berry said that the company is in the process of removing plastic trays from its ‘Tasty Cream’ biscuits. It is also working to reduce sugar content in two of its large brands by 5 percent by 2022 and reduce sodium in three of its main brands by 5 percent by 2022.
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