Selling off its own retail business to the Future Group and acquiring Reliance Retail’s dairy business has earned Heritage Foods shelf space in two major retail chains which will help grow its dairy business, according to Brahmani Nara, Executive Director, Heritage Foods Ltd.
At the launch of a range of Heritage’s flavoured milk in PET bottles in Chennai on Thursday, she said Heritage Foods is keenly focussed on its core dairy business which it hopes to more than triple over the next five years.
Heritage Foods has over 120 outlets in the South but with the business going to Future Retail, Heritage’s dairy products gain shelf space in a much larger chain. Along with that of Reliance Retail’s chain, it will be present in over a 1,000 outlets pan India, she said.
In addition, Reliance Retail’s dairy business gives Heritage Foods a significant presence in the North where Reliance brand’s volume of sales is estimated at about 1.5 lakh litres a day. Heritage Foods handles about 14 lakh litres milk daily and has a presence in 15 States. In the last financial year the company’s business was ₹2,640 crore with dairy and related business contributing ₹1,860 crore.
With the exit from the retail business, Heritage Foods hopes to grow the dairy business to ₹6,000 crore over the next five years. It will have to grow at about 25 per cent annually.
Brahmani said value added products, growth in cattle feed business, a relatively recent addition, and a new joint venture with a multinational for producing yoghurt will all contribute to the growth. The joint venture details will be announced soon, she said.
Capacity addition is also in the pipeline with five new facilities at a cost of ₹30 crore each planned in the coming years. These will add to its 15 facilities now. The company has also rebranded itself and revamped its product packaging in line with market trends, she said.
Company officials said Heritage Milk will be cutting prices by ₹2 a litre from tomorrow. Standardised Milk will be sold at ₹48 a litre and Full Cream Milk at ₹52. There will be no change in price of toned milk.