After the release of its Q3 FY24 results, Varun Berry, Vice-Chairman and Managing Director of Britannia Industries, informed analysts that rural growth is not progressing as it did in the past decade.
“We haven’t seen rural growth in the same manner as we did in the past 10 years,” said Berry.
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He admitted that urban growth presently surpasses rural growth; nonetheless, he emphasized that the situation will likely improve soon, noting the ongoing expansion of rural distribution by the maker of Good Day biscuits.
“We continue to do so even though we are not gaining the traction we were accustomed to,” Berry added.
The company has expanded its direct coverage to 2.76 million outlets and bolstered its rural distribution by appointing 29,000 rural distributors, compared to 28,000 in December 2022.
During the quarter, the leading food corporation also implemented price reductions and introduced consumer promotions for its key brands.
“To ensure that we don’t maintain the same prices but align them with the inflation of raw materials, we have taken strategic pricing actions in some of our key brands. We have also implemented tactical consumer promotions to drive consumption of those products, as we have observed that consumption trends, especially in rural areas, are not as robust as in previous years,” Berry added.
Compared to the corresponding quarter last year, the company reduced prices by 4 percent to reflect the decrease in raw material costs for consumers. Speaking about competition from regional players, Berry remarked that they are presently experiencing a “honeymoon phase,” and it will require a few months to assess their success.
Berry additionally briefed analysts that the company will closely observe the fluctuating stock prices of commodities, given their high volatility over the past two or three years.
“We remain vigilant on the competitive pricing actions resulting from commodity inflation. Our strategy will remain focused on driving market share, a critical aspect for us in all of our categories,” he said.
