Britannia enters chocolate sector, to compete with Nestle

INDIA – Biscuit maker Britannia has started selling chocolate wafers, competing with brands such as Nestle’s Kit Kat.

The company has extended its Pure Magic biscuit brand to chocolate wafers, in the format of slabs of chocolate on top of biscuits.

“This marks our first time in the real chocolate space and we will retail the product accordingly, with the main focus on modern retail and ecommerce,” Britannia VP marketing Ali Harris Shere said.

The product was launched in Bengaluru and is now being taken to the national level.

“We have started to take risks with innovations. The last very big innovation in biscuits was ITC’s Sunfeast. We believe our new product is the next big disruptor in the category,” Shere said.

Pure Magic is a smaller brand for Britannia compared to its Good Day and Marie Gold range of biscuits.

“There has been a slackening of biscuit consumption among youth and we believe the new brand under Pure Magic will bring back young adults,” he said.

Britannia has a current share of over 30% in the Rs 27,000 crore (US$4.25 billion) category, industry officials quoting data from research firm Nielsen said.

The company competes with Parle and ITC in biscuits.

The chocolate category, too, has been facing headwinds, with consumers holding on to discretionary spending on account of slowing sales in rural markets and impulse purchases being impacted by demonetisation, analysts said.

“Confectionery products are largely cash-driven, impulse purchases and the cash-crunch created during demonetisation partially contributed to the slowdown in confectionery consumption,” Apoorva Nema, consumer markets analyst at digital research firm GlobalData, said in November.

“This is the time to take a leap forward on some strategic initiatives,” Britannia managing director Varun Berry had said at an earnings conference with analysts in November.

“One of these is about entering new product categories to become a total foods company.”

He said the other two initiatives would be to make sure the company caters to smaller businesses in a way that they get the required focus and to enter new international territories, targeting one new geography every year.

Britannia, which reported an 11.5% increase in net profit to Rs 261 crore for the quarter ended September, has identified driving premium products, stepping up distribution and attaining cost leadership as core focus areas.

ET Retail

Leave a Reply

Your email address will not be published. Required fields are marked *