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 India Seen as Ripe for Processed Dairy Growth  

Check these out: lemon, pineapple, strawberry and kiwi butter.

Or frozen yogurt in a range of exotic flavors such as blackberry, blueberry, strawberry, berry blast blend, green apple and pina colada. Topped with raspberries, mango, pineapple, pomegranate and kiwi, and sprinkled with Oreos, almonds, Gummi Bears, marshmallows, Captain Crunch, white chocó chips, Snickers and chocolate sprinkles. Frozen yogurt is like soft serve ice cream but made from probiotic yogurt.

Or cheese wedges in flavors ranging from jalapeno to plain chilli flakes.

All presented in international quality packaging, with price tags to match.

Currently, dairy products constitute about 35% of the total packaged food industry in India. About 37% of the milk sold is used for processing, with the organized dairy industry accounting for 20%, and the unorganized sector for 22%. Dahi accounts for Rs 15,000 crore per annum, with the organized sector accounting for  10%. The organized cheese market is pegged at Rs 5,000 crore.

With a projected growth rate of 15-20% over the next five years, processed dairy is catching the fancy of organized players, even as biggies Amul, Britannia, Mother Dairy and Nestle slug it out in the processed foods space with basic-to-special products. Newcomers are concentrating on high-end products to create differentiation and gain consumer top of mind.

So Danone, which broke up with Britannia to enter India on its own, offers yogurt in three flavors under the Danone brand, smoothies in two flavors under the Danette brand, and plain and low fat dahi. Premium frozen yogurt brand Cocoberry, launched in 2009, is expanding its presence beyond Delhi to Mumbai and Jaipur.

Parag Foods, which is offering processed foods under brand Gowardhan, has launched a sub-brand, GO, for high end dairy foods — cheese, cheese products and flavoured yogurts.

A number of international brands are riding on modern retail to reach out to India’s consumers. Brands such as Grand Gouda, Zanetti Gorgonzala, Puccio Mozzarela Fior Late, Zanetti Pecorano Romano, Glac Brie, Glac Raclette, Holland Dairy Edam Ball, Le Gruyere Swiss  Gruyere Aoc, Chedder Fields Yellow Cheddar, Landana Gouda Olives & Tomato and Zanetti Parmigiano Reggiano are about to be introduced in the Future Group’s gourmet stores.

“The demand for processed dairy products through supermarkets is expanding and is expected to keepdoing so as cold supply chains and modern trade continue to evolve. Increasing urbanization, exposure to gourmet foods and corresponding changes in consumer preferences, behavior and purchasing power are the catalysts for the rise of processed dairy categories. And this is just the start," said Devendra Chawla, head — private brands and food services, Future Group.

The biggies, undoubtedly, have scale. As RS Sodhi, MD, Gujarat Cooperative Milk Marketing Federation, said: “No other dairy company can operate at a scale like ours and also deliver quality and value for money. We have a wide product portfolio under Amul and more additions will happen.”

Amul is charting out a dual growth strategy with its retail and portfolio expansion. “We have the products and presence in more stores will give our business an edge,” said Sodhi. The company is looking at launching sugar-free dairy products. Besides milk and dahi, it is the market leader in packaged buttermilk and lassi. 

The other biggie Britannia’s dairy portfolio, though currently small, contributes nearly 7% to the company’s revenues (Rs 3,771 crore for the year ended March 2010). “The dairy space is seeing an increasing number of new launches. Therefore, the fight for shelf space will intensify. For us, the thrust areas will be continued investment in our brands even as we give consumers exciting new experiences that are differentiated and relevant. This, combined with channel service and channel relationship management will ensure that our share of shelf is growing all the time,” said Vinod Menon, head — dairy business, Britannia.

Health benefits such as more calcium in their cheese, low-fat dahi and other value-adds form the core mantra for Britannia products. The company sees large and mini metros as the major drivers of dairy growth for categories such as cheese, packaged dahi, milk-based drinks and milk. For categories such as ghee, it sees buoyancy in tier II towns as well. 

“With organized retail growing, consumers have more exposure to premium and super-premium products. They have high expectations and our aim is to fulfill those aspirations through taste, design and packaging,” said Devendra Shah, chairman, Gowardhan.

There are plans to push brand Gowardhan and its premium sub-brand, GO. The company has invested in 3,000 Holstein cows and plans to invest Rs 200 odd-crore this year to expand capacities.

Beyond Maharashtra, it plans to expand its presence to Tamil Nadu, Andhra Pradesh and Karnataka. GO’s cheese spread in tubes is the company’s latest offering. 

“The market for probiotic and other healthy dairy products is growing,” said Gurinder Singh Bhalla, MD, Cocoberry. “Internationally, frozen yogurt is a fast-growing product category due to its uniqueness. Indian consumers are becoming upwardly mobile and health-conscious, so the timing was right to enter this new product space.

The idea was to create a premium niche, targeting the upper middle class and above, where creating demand is not difficult.”

The space is getting crowded. Kissan, Hindustan Unilever’s food brand, has entered the Rs 1,200 crore Indian (non-sweet) spreads market with the national launch of Kissan Creamy Spread. While the product is non-dairy, it competes with dairy products.

“Globally, Unilever is the market leader in spreads (margarine/mayonnaise) and Kissan Creamy Spread’s launch seeks to leverage Unilever’s global expertise in this category, be ahead of the curve and get a strong foothold in the rapidly growing spreads market in India,” said a HUL spokesperson.

Kraft too is soon expected to launch its dairy products. 

Source: 2010 Hindustan Times

http://www.hindustantimes.com/StoryPage/Print/700714.aspx


Posted on Tuesday, May 24, 2011 (Archive on Tuesday, May 31, 2011)
Posted by bsutton@adpi.org  Contributed by bsutton@adpi.org
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