The company had last year formed a joint venture with Greek baker Chipita for producing and selling croissants, a segment still untapped in India.
The company said the croissants will be produced at its Ranjangaon integrated food park near Pune in Maharashtra, which is likely to be launched by August. The first line of the Rs 10-billion plant will start producing cakes, followed by biscuits, croissants and dairy products.
“We are chasing the consumer and if he is moving towards a certain choice, that’s where we would like to be,” said Gunjan Shah, vice-president for sales at the Britannia. He said, as consumption pattern is changing owing to lifestyle changes, people are more inclining towards on-the-go-food, with croissants being one of them.
The firm will be offering several varieties of center-filled croissants, which will have a longer shelf-life than those available at bakeries.
“The challenge with the croissant segment is that it is largely limited to fresh consumption, which has got inhibitions. Our croissants will have a longer shelf-life and mass accessibility than just a few outlets in metropolitan cities,” said Shah.
Experts, however, believe that it may take several years before croissant as a category starts meaningfully contributing to its revenues. “New initiatives (like croissants, etc.) will take three to five years to have a significant impact on earnings,” equity research firm Macquairie said in a recent report. “The management expects Rs 2 billion revenue from the joint venture (JV) (with Chipita) in the next three years.”
Italian bakery-major Bauli too had last year set up a factory in Baramati near Pune, its first fully-owned plant outside of Italy, to manufacture croissants under the brand name Moonfils. The plant has a capacity of 12,000 tonnes of croissants, which can be scaled up to 17,000 tonnes in a short-time. The company, which has a presence in over 200 countries, expects India to become its second biggest market after Italy in three years.
While Britannia is the national leader of biscuits, it is under-indexed in rural areas. The company is focusing on the direct distribution model to have a greater penetration in rural areas and the Hindi heartland, where Parle is the biggest player because of the massive reach of its glucose biscuit, Parle G. Britannia currently reaches 1.8 million outlets directly and is looking to add 200,000-300,000 outlets every year.
The rural market currently contributes 22 per cent to the company’s total revenue, which Britannia expects to go up to 35 per cent in three years. The company has also introduced products such as Marie Gold, Bourbon, Good Day, Milk Bikis in Rs 5-10 price point, especially for rural areas. “This provides us with a synergistic fit with what the consumer is looking for out there,” said Gunjan Shah.