Danone India to flex muscle in adult nutrition category with Protinex

Purvita Chatterjee Mumbai | Updated on January 08, 2018

Dairy portfolio’s contribution is less than 20% of sales turnover

After having always relied on the portfolio acquired from Wockhardt, dairy and nutrition major Danone India has chosen Protinex as its star brand in India.

Unlike in other markets, where Danone maintains a balance between its dairy and nutrition portfolios, in India it has tilted its business in favour of the latter.

While it entered the dairy business after breaking up with Britannia in 2010, its contribution remains at less than 20 per cent of sales turnover, while nutrition dominates the rest.

“We have a balanced portfolio in most of the other markets. But in India, the dairy portfolio contributes less than 20 per cent of our turnover.

“In India, the cold chain is complicated and we have decided to do our own distribution servicing 6,000 outlets unlike the OTC-based distribution for our nutrition-based products which reaches two lakh outlets,’’ said Rodrigo Lima, Managing Director.

Dairy and plant-based products is one of the big divisions within Danone where it also has non-dairy products like almond milk.

“Almond milk is an interesting category and we could always look at it. But it is going to be our nutrition portfolio which is the star in the Indian market and we will focus on 50-year-old brands like Protinex, which is known to Indian consumers,’’ he added.

But competition is greater in the dairy segment since Danone is pitted against both domestic and international players like Nestle.

Investing heavily behind its nutrition portfolio, Danone’s portfolio currently comprises brands like Aptamil, Farex, Nusobee, Deolac and Neocate to address the needs of young infants, pregnant mothers and adults.

Here too, it faces competition from MNC giants like Abott Nutrition (PediaSure and Ensure) and even direct selling companies like Amway and Herbalife.

“Since we acquired brands like Protinex and others from Wockdhart, we have changed the strategy from a medical product to an OTC model of distribution. Today, we have a 50 per cent share in the adult nutrition category and growing at a 20 per cent CAGR,’’ claimed Lima.

While its dairy portfolio has taken a back seat, it is the ₹500-crore adult nutrition category which is going to be the focus area for the French multinational where it has recently extended its Protinex franchise as a compressed cookie.

GST has also resulted in different tax slabs for the MNC.

“There are different tax slabs for Protinex alone where the malted drink variant of the brand attracts GST at 28 per cent, while the rest of the franchise is at 18 per cent,’’ he added.

Published on October 11, 2017

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