Britannia’s Volumes To Recover In A Few Quarters, Says Varun Berry

Britannia Industries Ltd., India’s largest biscuit maker, expects volume growth recovery to take some time before regaining pre-Covid momentum as the inflation shock has been severe.

“Volume growth remain tepid and it [recovery] will take some time because consumers have been hit with fairly high inflation,” Varun Berry, the company’s executive vice-chairman and managing director, told BQ Prime.

“Also, because we have cut grammage in packs across 55% of our portfolio, I think it will take 2-3 quarters for volumes to be at a reasonable level,” he said.

Volume indicates the unit number of products bought or consumed.

The fast-moving consumer goods industry has seen volumes decline over several quarters as soaring prices dented demand.

According to Berry, prices of a few commodities—such as palm oil—have cooled off, which is a sign of relief for both consumers and companies.

For consumers, it means the company is unlikely to increase the prices of its products any more. For companies, it implies the margins will improve from increased sales and lower expenses.

Britannia, which makes a range of bread, cookie, cake and dairy products, has raised prices by about 22% to offset inflationary pressure on margins.

In this quarter, inflation has not been as rampant as it has been in the last six quarters, Berry said, though “…we are still seeing a bit of inflation”.

“Milk prices are going through the roof because of the lumpy skin disease [that happened to cows],” said Berry. “But as the government is trying to control that, milk prices should come back to normal soon.”

Wheat prices have also been rising, he said.

“However, three months down the line we have the wheat season and with good crop expected, I am hopeful that prices may ease.” he said. “Overall, in the next couple of quarters things should come close to normal.”