Food retail will be a $800 billion to $1 trillion market in India soon. The question is can we understand our consumers better can we deliver to them products that are different.
What is our understanding or how is our understanding going to shape up and will technology play a role in that. Varun Berry, CEO of Britannia, leading food products company, helps decode this.
Govindraj Ethiraj: Broadly, what is the consumer landscape looking like today in the context of the food products that you make ?
Varun Berry: So the consumer landscape is changing very rapidly. With the new generation coming in, young consumers are very flirtatious, they want to try different products. So their repertoires are expanding rapidly.
Every category repertoire use to be one or two brands, now it has suddenly gone to seven to 10 brands different products. So they are looking for choice and hence it is very important for companies like us to make sure that we create innovations, create new products all the time, understand consumers and provide them with something that they are dreaming off but haven’t got yet.
So what would be good example from recent past?
We recently launched something called Pure Magic Deuce. This is a cross between a biscuit and the chocolate and has a chocolate slab on top of it. It is available in other countries but for some strange reason it wasn’t brought in to this country. It also requires chocolate technology which as you know is very different from biscuit technology.
So we decided to take the plunge and take the risk of investing in that technology and seeing how this can move forward. It has done remarkably well. So we do a lot of listening, a lot of research, usage and attitude studies basis which we bring out what we think we should moving forward with.
And I will come back to studies and insight in a moment. When you said people are spoilt for choice and you said that there are 6 to 7 products that you can potentially consume in one category. Is that demand reflection of other things happening our digital lives, our multiple choices, our quick may be you know our need to get quick consummation. What’s driving it?
It’s absolutely true. In our times we used read the newspapers and we use to feel happy that we know what’s happening in the entire world. Today’s consumer is not like us. Today’s consumer wants to go deep rather than wide. If they like something they go deep and they understand it in detail.
Obviously the choices that they have to go deeper are as you know very, very wide. And that’s what creating this thing about knowing more, understanding more, trying more. And having different types of products in their repertoire. It’s only going to become even more from here.
And the insights and data that you spoke about. Are you able to now extract faster from the system before. And what are you doing in that space?
Absolutely. So there are lots of conversation that are happening in the digital world. So that listening is very important but the trick really is to make sure that you don’t you know differentiate the conversation from the noise.
Or the signal and the noise.
Absolutely you got to distill what you hear and you need to make sure that you make the right decision. And that is an art in itself. But yes we are getting a lot more information.
What would be an example of signal that would have been misread and versus one that could have been read more accurately?
The signal that probably was misread..the Indian consumer is aspiring for sure but aspiring with pragmatism. So if you only hear one part of the story which is the aspirational part of the story and do not go into the pragmatism then you could go wrong. When you hear conversations about their looking for a delightful product, you know we can have a triple chocolate cookie etc. etc but then you could lose the pragmatic part which is – at the right price.
So we all want that but at the right price. So we have gone wrong in the past where we made the world best cookie which was triple chocolate etc but it was at a certain price and it was such a small launch that it didn’t give us anything. So what we have learnt is that we have to make sure that the value consciousness of the Indian consumers is always married to the aspirational part of the Indian consumer.
So democratization is the strategy that we follow, we have to take the best products and then try to bring them to a price level that works for the consumer. So it got to be far enough to be exciting but it’s got to be close enough for me to go and buy it from the price stand point. That’s the example that I have.
In terms of distribution and logistics again where the technology plays a role. Have you seen changes in the way technology is able to drive more efficient distribution, understanding of how products are moving at a more micro level ?
So what’s happening today. ECommerce is growing very rapidly but it is only 1% of our total business. It will keep growing, it will probably go to 5%, may be 10% one day but essentially the base business is still going to be conventional. That doesn’t mean that technology doesn’t play a role in the conventional business.
If you look at the role that technology plays in our business, it is first about resource optimisation and the second is about profit optimisation. So the resource optimisation part is where you look at the repetitive part of the job that people do and you try and see how you can automate them. That’s where the technology comes in. These are very repetitive roles so you automate them, bring in artificial intelligence and you take the burden off the human beings and deploy them in the right place.
The second part is the profit optimisation where you got to look at the data, how you optimise revenue and reduce the cost. There again technology plays a huge role. To give you an example, in sales we are developing technology whereby there is a salesman buddy which is a hand-held that him through the process of the call and tells him that you haven’t sold certain SKUs to this outlet because this outlet is the kind of outlet which will buy this new product. So this is his guide, his buddy who is going to guide the salesman through this road.
So there is huge powerful database in the backend which is being mined ?
Absolutely. So those are the two roles that technology plays for us in our distribution, in our supply chain etc. and then there are many many examples that I can talk about but very interesting times.
And as you look ahead what are the one or two areas where you likely to or will launch something new whether it’s the traditional making products or dairy products. What’s your focus for next year or so?
So we are in a heighten phase of innovation. This year is going to be break through point from the innovation stand point. So within the categories that we operate in we have invested in technology which can give us very very different and very very differentiated products that are available in the market. And secondly we are looking at entry in the new category as well. Categories that we are not present in. so it’s going to be inflexion point in the history of Britannia.
And when you said new categories is it outside food or bordering food?
No, within foods but not in the core biscuit space. Getting out of the food category is large enough for us to keep growing our business aggressively.
And just to close one insight that you carry always with you in terms it helps you to decide what ways to go or whether not? The consumer who is already pragmatic yet desirous of new things..?
Yes, the product of certainly being enough for certainly being excited, close enough for the consumer to buy it. Secondly it should be a part of the daily ritual of the consumer. You can’t make a product completely out of bounds from the consumer rituals are concerned. And the third is the price has to be affordable.
That’s a good note to end for. Thank you so much for speaking with us.
Varun Berry: thank you.