Britannia CEO Doubts Reliance’s Biscuit Market Disruption Strategy

Britannia Industries’ CEO and Managing Director, Rakshit Hargave, expressed skepticism about Reliance Industries’ ability to create a similar disruption in the biscuit sector as it did in the cola market. This comes shortly after Reliance’s entry into the biscuits segment with its Independence brand.

During an analyst call on Saturday, Hargave pointed out that the dynamics governing the biscuit industry differ significantly from those in the cola market, making aggressive price cuts less effective. "Reliance has introduced a range of products that closely resemble traditional offerings in the biscuit space," he noted. "They began their launch in Tamil Nadu, which is a major market both for us and for biscuits overall."

Reliance Consumer Products Limited (RCPL) ventured into the biscuits market earlier this month, rolling out 28 new stock-keeping units (SKUs) under the Independence brand in Tamil Nadu, with ambitions to expand across India. This move follows Reliance’s successful disruption of the cola market through its Campa brand where it has captured double-digit market shares in key regions, competing directly with established giants Coca-Cola and PepsiCo.

However, Britannia’s CEO emphasized the challenges in applying a similar pricing strategy in biscuits. "A considerable portion of the biscuit market operates within low-price brackets of Rs 5 and Rs 10," Hargave explained. "Disturbing these price points is far more challenging compared to the cola market, where discounting by Rs 5 or Rs 10 has been an effective tool for disruption."

Reliance’s Campa brand entered the beverage market in August 2022 after acquiring the legacy brand, and has since seen rapid growth. In the first quarter, Campa generated sales of Rs 2,900 crore, accounting for nearly one-third of RCPL’s total revenue. Remarkably, Reliance reported that Campa achieved nearly 50 percent of its projected full-year sales for fiscal year 2026 within this single quarter.

Further expanding its beverage ambitions, Reliance plans to introduce Campa in aluminum cans by the end of this month. This packaging innovation has already been tested in the Australian market through the Goodness Group, a company acquired by Reliance earlier this year.

Hargave described Mukesh Ambani-led Reliance as a "very respectable competition" and indicated that Britannia will monitor market developments closely. Despite the competitive pressure, he expressed confidence in Britannia’s established market position. "We have strong competitive advantages and clear strategies to maintain our growth trajectory," he said. "We will observe how the situation evolves."

The entry of Reliance into the biscuits segment highlights the increasing competition within India’s fast-moving consumer goods (FMCG) sector. The biscuit market in India is vast and highly fragmented, with price sensitivity playing a critical role in consumer choice. Companies like Britannia have long dominated this space with affordable and trusted products across various categories.

Reliance’s attempt to challenge incumbents by leveraging its deep pockets and retail network is a notable development. However, as Hargave’s comments suggest, replicating the success seen in beverages may require navigating unique challenges inherent to the biscuit industry’s pricing norms and consumer expectations.

With Reliance’s aggressive expansion and innovative marketing strategies, the FMCG landscape in India is set for heightened rivalry. This competition could lead to more options and potentially better prices for consumers, but it also demands strategic agility from established players like Britannia to retain their leadership.