Britannia Processed Cheese
EXECUTIVE SUMMARY
This report is about Britannia Processed Cheese. Britannia is a leading biscuit brand since 1892. It took a new step into the dairy industry in 1997 with two products - Processed Cheese and Dairy Whitener. In 2002, Britannia's New Business Division namely 'Britannia Milkman' formed a joint venture with Fonterra, the world's second largest Dairy Company, which gave birth to Britannia New Zealand Foods Pvt. Ltd.
In my report I have done a complete analysis of the Britannia processed Cheese. The analysis has been carried out using SWOT analysis and PRESTCOM analysis. On the basis of analysis we can see that Amul has given a big competition to Britannia. The Britannia cheese market is growing at 10-12% in volume terms and 16-17% in value terms with Amul. Britannia New Zealand Foods has already cornered around 45% of the Rs 450 crore Indian cheese markets and in garnering a higher cheese market.
The report has been concluded using the marketing mix theory - the 4P's, namely - Product, Place, Price and Promotion. The 4P's talk about the different products of Britannia dairy Industry, the places where it has targeted its market, the prices of the products in volume terms and its strategy for marketing the product through different kinds of advertisement, promotional events and television advertisement.
INTRODUCTION
In 1892 to be precise, a biscuit company was started in a nondescript house in Kolkata with an initial investment of Rs. 295. The company we all know as Britannia today. (www.britannia.co.in)
In 1997 Britannia entered the Dairy business. This was combined with the 'Re-branding' of the company itself, where the logo was modernized for the first time in almost 80 years. Britannia entered the dairy business with two products - Processed Cheese and Dairy Whitener. In 2002, Britannia's New Business Division namely 'Britannia Milkman' formed a joint venture with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. (www.wadiagroup.com)
SWOT analysis of Britannia Processed Cheese
Strengths:
* Demand profile: Absolutely optimistic.
* Margins: Quite reasonable, even on packed dairy products.
* Availability of raw material: Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.
* Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years. (www.indiadairy.com)
Weaknesses:
* Perishability: Pasteurization has overcome this weakness partially.
* Logistics of procurement: Woes of bad roads and inadequate transportation facility make milk procurement problematic.
* Competition: With so many newcomers like Dabon International and Vijaya entering this industry, competition is becoming tougher day by day. (www.indiadairy.com)
Opportunities:
* Value addition: Steps should be taken to introduce value-added products like ice creams, paneer, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market along with opportunities in the field of brand building.
* Export potential: Efforts to exploit export potential are already on. (www.indiadairy.com)
Threats:
* Other competitors: The major players are Amul, Britannia, and Dabon International dominating the market. Other major brands were Vijaya, Verka, Nandini and Vadilal. (www.aavinmilk.com)
PRESTCOM ANALYSIS OF BRITANNIA PROCESSED CHEESE
* POLITICAL -To ensure the proper development and growth of this industrial sector, the Government of India has instituted various laws and regulations. The various regulations that govern the dairy processing industry can broadly be classified into:
. Prevention of Food Adulteration Act, 1954
2. Milk and Milk Product Order (MMPO) 1992
3. Standards on Weights and Measures (Packaged Commodities) Rules, 1977
4. Export (Quality Control & Inspection) Act, 1963
(Please refer to Appendices 1) (www.indiadairy.com)
* REGULATORY - The dairy industry ...
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PRESTCOM ANALYSIS OF BRITANNIA PROCESSED CHEESE
* POLITICAL -To ensure the proper development and growth of this industrial sector, the Government of India has instituted various laws and regulations. The various regulations that govern the dairy processing industry can broadly be classified into:
. Prevention of Food Adulteration Act, 1954
2. Milk and Milk Product Order (MMPO) 1992
3. Standards on Weights and Measures (Packaged Commodities) Rules, 1977
4. Export (Quality Control & Inspection) Act, 1963
(Please refer to Appendices 1) (www.indiadairy.com)
* REGULATORY - The dairy industry was de-licensed in 1991 with a view to encourage private investment and flow of capital and new technology in the segment. Milk and Milk Products Order (MMPO) regulates milk and milk products production in the country. The order requires no permission for units handling less than 10,000 lts of liquid milk per day or milk solids up to 500 tonnes per annum. MMPO prescribes State registration to plants producing between 10,000 to 75,000 litres of milk per day or manufacturing milk products containing between 500 to 3,750 tonnes of milk solids per year. Plants producing over 75,000 litres per day or more than 3,750 tonnes per year of milk solids have to be registered with the Central Government. (www.aavinmilk.com)
* ECONOMIC - With the current household penetration of cheese at an abysmal 5% in India, Britannia New Zealand Foods Pvt. Ltd, is planning to focus its attention on this product category to expand the market. What has spurted the joint venture company which has already cornered around 45 % of the Rs. 450 crore cheese markets in value terms is the phenomenal growth it has seen in this product category. Just a year ago, its cheese products were growing at 5%. Today, they are growing at 12%. (www.britannia.co.in)
* SOCIAL - The present market for cheese in India is estimated at about 9,000 tonnes and is growing at the rate of about 15% per annum. Cheese is mainly consumed in the urban areas. The four metro cities alone account for more than 50% of consumption. Mumbai is the largest market (accounting for 30% of cheese sold in the country), followed by Delhi (20%). Calcutta (7%) and Chennai (6%). Mumbai has a larger number of domestic consumers, compared to Delhi where the bulk institutional segment (mainly hotels) is larger.
(www.themilkweed.com)
* TECHNOLOGICAL -
. Biotechnology:
.1 Dairy cattle breeding of the finest buffaloes and hybrid cows
.2 Milk yield increase with recombinant somatotropin; (www.aavinmilk.com)
.3 Recombinant chymosin, acceptable to vegetarian consumers
.4 Dairy cultures, probiotics, dairy biologics, enzymes and coloring materials for food processing
.5 Biopreservative ingredients based on dairy fermentation, viz., Nisin, pediococcin, acidophilin, and bulgarican contained in dairy powders.
2. Dairy/food processing equipment:
Potential exists for manufacturing and marketing of cost competitive food processing machinery of world-class quality. (www.aavinmilk.com)
3. Food packaging equipment:
Opportunities lie in the manufacturing of both machinery and packaging materials that help develop brand loyalty and a clear edge in the marketing of dairy foods.
(www.aavinmilk.com)
* COMPETITIVE - Britannia has faced this threat reasonably well over the past one year, without a visible impact on its financial performance. The proposed foray by Nestle India and Hindustan Lever into confectionery and dairy products, could pose the only remaining threat to Britannia.
(www.thehindubusinessline.com)
* ORGANISATIONAL - In 1997 Britannia entered the Dairy business where the logo was modernized for the first time in almost 80 years. Britannia came with two products - Processed Cheese and Dairy Whitener. In 2002, Britannia's New Business Division namely 'Britannia Milkman' formed a joint venture with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. (www.wadiagroup.com)
* MARKET - The Britannia cheese market is growing at 10-12% in volume terms and 16-17% in value terms with Amul. Britannia New Zealand Foods has already cornered around 45% of the Rs 450 crore Indian cheese markets and in garnering a higher cheese market. At present, cheese products, contribute around 50 % of the Rs 120 crore turnover of the dairy product company (which markets its products under the brand name Britannia Milkman) while Diary whitener is around 30% and butter and ghee together are 20%.
(www.britannia.co.in)
CONCLUSION
* PRODUCT - Britannia entered the Dairy business in 1997 with two products - Processed Cheese and Dairy Whitener. Over a period of time Butter, Ghee (Clarified Butter - a cooking medium) and Flavoured Milk were added into the portfolio. In the last two years the company has got into the fresh, pasteurised milk. It also markets Fresh Paneer & Fresh Lassi in and around Delhi.
(www.wadiagroup.com)
* PLACE - Britannia Dairy product has targeted its market up to the urban sectors till now. The products are very rarely available in the rural areas of India. (www.wadiagroup.com)
* PRICE - Products are available in all major cities across India and is priced at Rs 35 for 180 gm spread tub and Rs 30 for a pack of six soft and spreadable cubes (120gms). (www.domain-b.com)
* PROMOTION - It is currently holding a month-long promotional event here called 'Britannia Milkman Not Just Toppings Cheese Days' targeted at housewives and showcasing innovative recipes (with cheese). In addition, a new Milkman cheese campaign is scheduled to be telecasted on television. "The television campaign is targeted at children and shows the goodness of cheese". (Businessline, September, 2001).
APPENDICES - 1
Prevention of Food Adulteration Act, 1954
This Act is the basic statute that is intended to protect the common consumer against the supply of adulterated food. This specifies different standards for various food articles. The standards are in terms of minimum quality levels intended for ensuring safety in the consumption of these food items and for safeguarding against harmful impurities and adulteration. The Central Committee for Food Standards, under the Directorate General of Health Services, Ministry of Health and Family Welfare, is responsible for the operation of this Act. The provisions of the Act are mandatory and contravention of the rules can lead to both fines and imprisonment.
(www.indiadairy.com)
Milk and Milk Product Order (MMPO) 1992
The Milk and Milk Product Order (MMPO), 1992, issued on June 9, 1992 seeks to ensure the supply of liquid milk, an essential commodity, to consumers by regulating its processing and distribution. Within eight years of its operation, the Central/State Registering Authorities have till December 2000 registered 666 units with a total processing capacity of 65.8 million litres per day (mlpd). (www.indiadairy.com)
Salient Features of the MMPO Order include the following:
. Registrations for units handling up to 75,000 litres of milk per day are granted by the State Governments and units with more than 75,000 litres per day capacity are registered by the Central Registering Authority.
2. The Certificate also specifies the milkshed area, which, under the order is defined as a geographical area demarcated by the Registering Authority for the collection of milk by the registered unit.
3. Maintenance of specified hygienic conditions in the premises where milk and milk products are handled, processed, manufactured or stored.
The collection, transportation and processing of milk normally centres around the operations of a processing plant. The region from which the marketable surplus of milk production finds its way to a processing plant is called a 'milkshed'. The concept of milkshed areas is pivotal to the MMPO. For an orderly development of the dairy industry, a proper assignment/allocation of milk \shed is critical. (www.indiadairy.com)
The dairy industry is regulated in most countries through various ways. Many subsidise part or whole of domestic production. Imports are commonly restricted, and exports frequently subsidised. High dairy price supports in many countries are put in place to stimulate production to the extent that subsidies for exports are necessitated to maintain domestic dairy programmes. (www.indiadairy.com)
In the United Kingdom, all the milk produced by farmers is procured by the cooperatives. Private dairies are required to buy their milk requirement from cooperatives. New Zealand has no private sector dairy plants. (www.indiadairy.com)
In the United States, 70 per cent of the dairy industry is cooperative. Dairy programmes are subject to more Government participation or regulation than most other domestic agricultural industries in the USA. There are also Federal Milk Marketing Orders and movement barriers in the USA for "orderly marketing control, which is associated with stabilising fluid milk prices, providing secured and dependable markets for individual farmers producing milk primarily for the fluid market and improving the balance of market power between farmers and handlers. (www.indiadairy.com)
In the emerging liberalised global scenario, trade-distorting agricultural policies have been the focus of the GATT multilateral trade negotiations. With the liberalisation of agricultural trade under the new GATT regime, the heavy subsidies prevalent in the dairy sector in the countries of the EU as well as in the USA will have to be brought down in the next few years. The competitive advantages of the Indian dairy industry are then considered to be substantial. With substantial and continued investment in building up milk production, India can emerge as a major exporter of dairy products in the next few decades. (www.indiadairy.com)
Standards on Weights and Measures (Packaged Commodities) Rules, 1977
These Rules lay down certain obligatory conditions for all commodities that are packed form, with respect to declarations on quantities contained. These Rules are operated by the Directorate of Weights and Measures, under the Ministry of Food and Civil Supplies.
(www.indiadairy.com)
Export (Quality Control & Inspection) Act, 1963
The Export Inspection Council is responsible for the operation of this Act. Under the Act, a large number of exportable commodities have been notified for compulsory pre-shipment inspection. The quality control and inspection of various export products is administered through a network of more than fifty offices located around major production centres and ports of shipment. In addition, organizations may be recognized as agencies for inspection and /or quality control. Recently, the government has exempted agriculture and food products, fruit products and fish and fishery products from compulsory pre-shipment inspections; provided that the exporter has a firm letter from the overseas buyer stating that the overseas buyer does not require pre-shipment inspection from official Indian inspection agencies. (www.indiadairy.com)
BIBLIOGRPAHY
* The introduction and company history was retrieved on 7th October, 2007 at 4:42p.m from: http://www.britannia.co.in/companyoverview_overview.htm
* The introduction and company history on dairy products was retrieved on 7th October, 2007 at 5:00p.m from:
http://www.wadiagroup.com/Grp_Cmp/bombay_britannia_profile.htm
* The Strengths, Weaknesses and Opportunities of SWOT analysis was retrieved on 7th October at 6:25p.m from: http://www.indiadairy.com/ind_swot.html
* The Threats of SWOT analysis was retrieved on 7th October at 7:10p.m from: http://www.aavinmilk.com/dairyprofile.html
* The Political analysis of PRESTCOM analysis was retrieved on 10th October, 2007 at 4:45p.m from: http://www.indiadairy.com/zone_importexport.html
* The Economic and Market analysis of PRESTCOM analysis was retrieved on 10th October, 2007 at 5:00p.m from:
http://www.britannia.co.in/pressarticles131106.htm
* The Regulatory and Technological analysis of PRESTCOM analysis was retrieved on 12th October, 2007 at 5:30p.m from:
http://www.aavinmilk.com/dairyprofile.html
* The Social analysis of PRESTCOM analysis was retrieved on 12th October at 6:45p.m from: http://www.themilkweed.com/Operation_Flood.htm
* The Competitive analysis of PRESTCOM analysis was retrieved on 13th October at 12:20p.m from:
http://www.thehindubusinessline.combusinesslineiw20010415stories0215b051.htm.mht
* The Organisational analysis of PRESTCOM analysis was retrieved on 13th October at 1:15p.m from:
http://www.wadiagroup.com/Grp_Cmp/bombay_britannia_profile.htm
* The Product analysis and Place analysis of Conclusion was retrieved on 14th October at 2.30p.m from:
http://www.wadiagroup.com/Grp_Cmp/bombay_britannia_profile.htm
* The Price analysis of Conclusion was retrieved on 14th October at 3:05p.m from: http://www.domain-b.com/companies/companies_b/britannia/20030324_malai_chaska.html
* The Promotion analysis of Conclusion was retrieved on 15th October at 7:00p.m from: Businessline, Chennai, September 2001, taken from:
http://proquest.umi.com/pqdweb?did=80153562&sid=1&Fmt=3&clientId=70303&RQT=309&VName=PQD
* Appendices 1 was retrieved on 10th October, 2007 at 4:45p.m from:
http://www.indiadairy.com/zone_importexport.html
SIDDHARTH GOYAL BBA - COHORT - 2006
I.D. NO: 020106010 MODULE NO: U55000
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