November 28, 2007

 

India's Britannia to boost dairy business ahead of Danone's entry

 

 

India's cookie and biscuit firm Britannia is focused on bolstering the dairy business at a time when its estranged French co-investor Group Danone is also prepped up to invade the milk trade in India.

 

The Rs 2,200 crore company is going into the large domestic dahi/yoghurt segment and seen stepping up interest in its dairy portfolio consisting of other milk derivatives.

 

Britannia is expanding the dahi/yoghurt portfolio after hitting the market with a normal product. It has now added low fat variant and could be exploring flavoured or probiotic products going forward. Yoghurt is core to Danone's dairy business globally.

 

The French food giant and former investor in Britannia is working on tapping India's dairy market -- among the world's biggest in terms of per capita consumption.

 

According to Vinita Bali, Britannia's spokesperson, said the company distances its ongoing focus on dairy segment from Danone's proposed foray, stating its dairy business is growing "at 18 percent, and could have grown faster but for limitations in sourcing milk. He added, the dahi market, which is on a growth curve, is ripe for the brand play now.

 

Britannia's dairy business, in joint venture with New Zealand's Fonterra, reported a turnover of Rs 130 crore last year. The company is joining rivals Nestle Amul in pushing the brand action in the domestic dahi space, which is hugely dominated the traditional home-made consumption.

 

Britannia has been innovating quite a bit in the cheese segment where it is a clear leader with over 70 percent market share, Bali said.

 

However, the company admits that it is not going to be an easy road as it works on the dairy portfolio as it is is developing competent back-end facilities to expand its dairy market.

 

The focus on dairy should be seen in the context of the company's non-biscuit portfolio- also consisting of rusks, cakes and breads, is growing upwards of 40 percent.

 

Britannia's combined non-biscuit portfolio contributed roughly Rs 330 crore in FY'07.