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Britannia plans to give a leg up to its dairy business, aiming for high growth rates in less saturated categories such as cheese and yogurt. It is set to market these products with its extensive biscuit distribution network.
In the cheese category, Britannia has managed to garner 21 per cent market value share reaching out to 30,000 outlets already, but it has yet to make a mark in yogurt category. Branded cheese is still a relatively smaller category at Rs 600 crore, with single digit growth rates between 7 per cent and 10 per cent, compared to the Rs 1,800-crore branded yogurt segment with a compounded annual growth rate (CAGR) of 20 per cent.
Ashok Namboodiri, Head, Britannia Diary Products, said, “We are trying to derive synergies and leverage our biscuit distribution for our dairy products. However, for new categories such as yogurt we have not merged it with biscuits, since we have to build a robust cold chain as only certain biscuit outlets can stock dairy products such as yogurt.”
Considering that the company has made a relatively late entry into the yogurt segment three years ago, it has pitted itself against erstwhile partner Danone and other brands such as Nestle and Amul.
“There are challenges and opportunities in the yogurt segment as we have to build cold chain competencies. Today, our largest category is cheese, which is the face of our dairy business primarily,” he added.
“For yogurt, we will leverage the trademark brand of Britannia. The focus is now on building end-to-end cold chain for the category. Among the seven categories in dairy, the focus would be on cheese and yogurt,” said Namboodiri. The company’s dairy portfolio also includes milk, ghee, dairy whitener and butter.
To differentiate itself from other dairy players, Britannia expects to create value added offerings which will help it command better margins in the segment. “The branded yogurt segment is evolving rapidly and is going to be next engine of growth after cheese. We would differentiate the product based on its quality and freshness,” he said.
The dairy segment currently contributes 10 per cent of Britannia’s turnover.
Purvita@thehindu.co.in
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