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Britannia Industries, which announced a joint-venture with French cheesemaker Bel Group earlier this week, aims to scale up its packaged cheese business by 5x to about ₹1,250 crore over the next five years.
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Britannia said as part of the JVA, it will sell and transfer 49 per cent of its equity stake in BDPL to Bel in accordance with the terms of the share purchase agreement entered between Britannia and Bel“Our first target is to grow the cheese business by 5x over the next five years. We currently have a cheese business of about ₹250 crore. We believe, with this partnership, we will be able to significantly expand this under-penetrated category by bringing innovative products and fulfilling evolving consumer needs,” Varun Berry, Executive Vice-Chairman and MD, Britannia Industries, told businessline.
Future investment
Under the partnership, Bel is acquiring 49 per cent stake in Britannia’s wholly owned subsidiary BDPL, which will be renamed as Britannia Bel Foods Pvt. Ltd. The cheese products will be produced at the JV company’s state-of-the-art-facility at Ranjangaon, Maharashtra, the company added. The products will be co-branded using the trademarks “Britannia” and “The Laughing Cow”.
Talking about future investment, Berry said, “We have already invested about ₹170 crore in setting up the plant. In the next 2-3 years, we’re going to invest another ₹160-170 crore to bring in innovative products. But that will just be the beginning. Thereafter, we will evaluate and both the partners will be happy to invest further in-line with the opportunities.”
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Companies adopt different measures to rejig pricing strategies to win back consumers, including innovations in pack sizes, it saidThe JV company will focus on strengthening distribution of the cheese portfolio in top 45 cities. It will also leverage on ₹10-sachets to make its products accessible to consumers in tier-1 and -2 markets. The cheese segment in the country is currently pegged at about ₹5,000 crore, including B2B sales, growing at about 22-23 per cent CAGR.
“This strategic partnership with Britannia in India is a new step for Bel Group’s development in Asia. They have an emblematic brand in India and a powerful distribution system. By combining their expertise with our iconic brand, ‘The Laughing Cow’ , and our knowledge of cheese products, this JV is well positioned to become a leader in the fast-growing Indian cheese market,” said Cécile Béliot, CEO, BEL Group.
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