Danone is a ‘dahi’ not a ‘dairy’ company: India MD

French food-products multinational Groupe Danone has turned to Indian women, instead of relying on its tested global strategies, for developing and packaging products for the local market.

“The young females, housewives and professionals in the age group of 18-29 will be fuelling the growth of packaged yoghurt in the country rather than make at home,” Jochen Ebert, Managing Director Danone Food and Beverages India, told Business Line .

The Indian subsidiary of the French company is regularly engaging with its key consumers — ‘young working women’ — for guidance on product development.

As a result, the company has launched products such as stirred Dahi, Mishti Doi, lassi and chaas (buttermilk).

“We work like a typical start-up when planning our investments. It varies from product-to-product depending on their success and failure. India is a unique country in terms of food habits which tells us that we cannot copy and paste from, say, our portfolio in Europe,” Ebert said.

Per capita consumption Danone is not a dairy company, but a “ dahi ” (read yoghurt) company, said Ebert, adding that “ultimately, all boils down to growing the per capita consumption of yoghurt or dahi in India.”

Though the product may be expensive, the intent is to offer a product which a consumer wants to buy again, he said.

Accordingly, the company has also decided on its consumer base, targeting metro cities.

Sourcing norms “Our strategy in India is to grow the per capita consumption of yoghurt or dahi. Today, the per capita consumption of yoghurt is just 3 kg, which includes homemade dahi in comparison to France where the per capita consumption is 30 kg. So, India is still in a nascent stage and we believe growing the per capita consumption of yoghurt is the key right now,” he said.

Ebert believes only in the long-term will India become the market share game for yoghurt makers. On the retail front, while he agrees that Danone has smaller footprints than its peers, Ebert said the market here is highly fragmented and the modern trade is still in the nascent stage. Besides, strict sourcing norms of the company make its expansion in fresh dairy products challenging.

It is not the Indian Food Laws, but the company’s internal sourcing norms which make it difficult to use almost 90 per cent of the local milk. Danone also follows the direct distribution model which means it transports products from the factory to the kirana stores through its own trucks.

However, the company is now also looking to work with distributors provided they follow strict quality norms.

To capture the Indian market, it has introduced its ready-to-use products such as chocolate smoothies and milk.