Dairy companies make a `cheesy’ attempt to win desi palates

HYDERABAD | PUNE: Indian state-owned and private dairies are introducing a range of cheese products in `desi’ flavours, including garlic, mint and spice, among others, with the aim of tapping the indigenous tastes of cheese lovers across the country to boost sales and profits.

First movers among the Indian dairy players such as Amul and Parag Milk Products have reported impressive sales by launching `desi’ flavoured cheese products in variants of cubes, blocks, slices and spreads.

Parag Milk Foods, India’s largest cheese producer, for instance, had rolled out cheese products in five flavours that include chutney, piri piri, achari, schezwan and kaccha aam over the past few months.Amul, Milky Mist Dairy Food and few others also launched cheese products in pepper and garlic flavours.

“Chutney cheese was a success as the company got additional 20% sales in the slice category. This led to the launch of four new flavours -kaccha aam, piri piri, schezwan and achari -in a combo pack for people to experiment with,“ said Mahesh Israni, Parag Milk’s chief marketing officer.

A senior official of Amul said the cooperative too was developing new cheese flavours to drive retail sales.

Analysts and dairy-sector experts project healthy high double-digit annual growth of over 30% in the Indian cheese sector at about Rs 6,000 crore by FY 2020 from little over Rs 2,000 crore last fiscal, thanks to a shift in consumption patterns coupled with rising disposable incomes in urban and semi-urban markets.

Research agency RNCOS in its recent report titled `Indian Dairy Industry Outlook 2022′, said that e commerce players such as Amazon, Nature’s Basket, Big Basket and Flipkart, among others, have contributed to the growth of dairy sales by making consumers aware of several new products available in the market.

“Launching cheese in Indian flavours creates a differentiator in an otherwise commoditized cheese market. Coupled with good marketing, Indianising cheese flavours would help increase end-user sales which offer improved margins,“ said Jubil Jain, analyst with Philip Capital.

RS Sodhi, managing director, Gujarat Cooperative Milk Marketing Federation, which markets its milk under the brand Amul, finds cheese as a niche segment among dairy products at present and that it would take time to pick up demand for impressive revenues.

Echoing similar views, Israni of Parag Milk said that nearly 90% of people in the country on an average do not eat cheese, while the proportion is relatively encouraging in urban areas with over a third of the population consuming cheese products.

Experts point out that cheese consumption in India is currently driven mostly by institutional players and quick-service restaurants like McDonalds, Pizza Hut and Dominos among others, commanding over half the market share while the rest is contributed by retail sales. They also point out to increased sales reported by the quick-service restaurants, post the introduction of `desi’ flavoured offerings.

Parag Milk Israni said his company already had several variants in its spreads category but they were mostly international flavours. “The strategy of the company was clear. Instead of waiting for people to increase consumption of Mexican or Italian food so as to increase cheese sales, we have decided to Indianise the cheese so that it could go well with the Indian cousin,“ said Israni.