Britannia Industries, India’s leading biscuit and bakery products manufacturer, is set to raise prices by more than 6% by the end of 2025 to counter rising input costs. The company had initially reduced prices during a deflationary cycle but later had to implement multiple price increases after inflation surged unexpectedly.
Executive vice-chairman and managing director Varun Berry explained that the industry misjudged inflation trends, leading to delayed price adjustments. The company has already implemented a significant portion of the planned hikes and will continue with selective increases in the coming months.
Britannia reported a 4.8% year-on-year growth in net profit for the October-December quarter, with revenue rising by 6.5% after price increases helped offset higher input costs. Production expenses have surged due to increased import duties on edible oils, which jumped by 22% in September 2024 and up to 40% over the year. Rising costs of key commodities such as sugar, wheat flour, and coffee have also added to the pressure.
The company has decided to monitor commodity price trends closely and adjust prices strategically for specific brands and product categories. Britannia’s input costs rose 11% during the last quarter, and while inflation is expected to stabilize in some areas, the company remains cautious.
Berry stated that the entire industry initially hoped for a reduction in duties on key inputs like palm oil, but with no relief in sight, Britannia is now taking decisive action on pricing. The company is also scaling down its capital expenditure, having spent ₹500-₹600 crore last year on capacity expansion. With most planned plant openings completed, next year’s investment is expected to be significantly lower.
Urban demand for groceries remains weak due to inflation, stagnant wage growth, and rising housing costs, which have led companies to anticipate subdued revenue growth in the coming quarters. In response, Britannia is testing a new market strategy in urban areas to balance traditional retail and emerging distribution channels. This includes leveraging data-driven consumer insights for a personalized approach and increasing service frequency in high-potential outlets.
With inflationary pressures persisting, Britannia is adapting its pricing and distribution strategies to navigate the evolving market setting.