Bombay Dyeing's Nusli Wadia is a very hands-on-non-executive Chairman and actually tastes all of Britannia's planned offerings.

The opening gambit of Britannia's born-again biscuit strategy is a focus on power brands, akin to Hindustan Lever Limited's much publicised gamble of concentrating its efforts on 30 brands that accounted for the bulk of its turnover-a gamble that worked. Alagh reacts indignantly to suggestions that the strategy was inspired by Lever. Britannia, he says, had formulated the strategy well before HLL went public with its. The seven brands identified as part of the power-club: Marie Gold, Treat, Good Day, Fifty Fifty, Milk Bikis, Time Pass, and Tiger and its variants.

Then, there's the repackaging initiative. Five years ago, Britannia hired Paris-based Shombit Sen's Shining Strategic Design to craft a new look for it. Now it has gone back to the man. Alagh is tightlipped about the new design but says, ''The primary ingredient of biscuits is wheat, and we want to highlight its benefits.'' It isn't every company that goes in for two facelifts in a span of five years, but it isn't every company that diversifies into a new business, pin its hopes on it, and just when it is beginning to do well hive it off into a joint venture.

Cost is another focus area. The company's operating margins have improved from 4.1 per cent in 1998 to 7.7 per cent in 2002. Raw material and packaging costs are down approximately 10 per cent, the workforce has been pruned from 5,074 in 2000 to 4,126 today, and the Britannia is eyeing more gains.

Lever has tried that, again, and with some amount of success-over the past 15 quarters its profits have been robust despite modest growth in sales. Still, gains from operational improvements are at best incremental. For exponential progress of the kind Britannia seeks, selling more is a pre-requisite. Says Satish Turlapati, an FMCG analyst with Motilal Oswal Securities, ''To grow the company will need more than cost cutting measures"

A Cookie-Cutter Strategy?

The market for the twice-baked stuff that goes under the generic name biscuits may have grown at an anaemic 6 per cent since 1996, but Alagh hasn't let that statistical spoil-sport dampen his enthusiasm. ''The maximum gains are always made in periods of uncertainty,'' he reflects philosophically. He has got a strategy to back his belief, but it is still on paper.

The specifics range from leveraging organic growth- a low pay-off option-to edging out the unorganised sector with "right products at the right price".

Efforts to identify those products are on as is a programme targetted at creating what Alagh terms ''opportunity managers'', by ''encouraging innovation'', and ''penalising conventional thinking''. ''And we'll continue to bond with the trade,'' explains Alagh.

That sounds suspiciously like a cookie cutter strategy, although Alagh's promise of ''innovative products and exciting promotions of the Britannia-Lagaan kind'' could give it a much-needed edge. The last, for those who came in late, involved a promo where lucky winners could square off against the Lagaan team led by Aamir Khan.

The problem with a strategy like that is that it is heavily price dependent. Consumers in urban markets may be open to premium offerings, but as Britannia's experience with its Nutrichoice range of biscuits has shown, the takings aren't rich.

The competition is aware of this. Parle, which owns the world's largest selling (nearly 2.5 tonnes a year) biscuit brand Parle G boasts a 65 per cent marketshare in the Rs 1,500-crore domestic glucose biscuit market largely on account of its lower-than-low price strategy (the company declined to comment).

And Bakeman's marketing chief Pradeep Kant, says his company is looking to grow its marketshare. ''We are confident of taking on competition".

The ace up Alagh's sleeve could be managerial bandwidth. In March, 2002 Britannia named Nikhil Sen Chief Operating Officer. Sen joined the company as a management trainee in 1980 and his elevation is widely seen as an effort by the company to strengthen its marketing. And Nusli Wadia himself isn't your everyday non-executive chairperson.

An ardent foodie himself, he personally tastes each of Britannia's potential offerings. The company grapevine has it that when Milkman was venturing into lassi it was Wadia who nixed the proposed salted variant in favout of a sweetened one.

Alagh will need all that counsel and more. Growing the biscuits business will mean launching premium offerings that can compete with the likes of Jacob's- ironically, a brand owned by Danone-and McVites in the fragmented urban market. It will also mean building on Tiger's success in the rural market with new variants and in the face of intense competition. In, his own words, he has to be a jerry, not chase one.

1 2 3