Danone, the quality dairy product maker of Indian dairy association

Group Danone – Joining the White revolution of India and expressing its need of Indian women as an employee. Danone which has been operating for a considerable number of years had launched its co-branded pouched milk packs under the Dynamix brand in Pune.

Danone India, members of Indian dairy association, runs a mission to serve health and nutrition via quality desserts to millions of Indians, kids and adults.

By collaborating with the Schreiber Dynamix, Danone has been procuring and packaging the milk, hence making the sale of its toned milk in Pune.

Although India’s milk production was expected to have exceeded 139 million tons in 2013-14, organized players held only one fourth of that milk market. So the Multinationals like the Nestle and the Danone on the way of focusing on a large scale, sold value added dairy products and Ultra High Temperature (UHT) treated milk in special packs. They kept aside from the low margin and high volume business of liquid milk business, influenced previously by   the private players like the Amul brand and Cooperatives led by the Gujarat Milk Marketing Federation (GCMMF).

The Managing Director of the GCMMF, RS Sodhi mentioned that the entry of Danone into the liquid milk market casted the potential of the Dairy Industry In India, also helping in its expansion too. The Managing Director of Danone Food and Beverages India , Jochen Ebert , cited the fact that , the key break through innovation had come from the organized dairy players in India , as 75% of the milk market are being held by the milkman and the loose milk .

He further told that the Danone has been selling milk, skim milk, milk shakes, chocolate smoothie, masala buttermilk and sweet lassi in a country where the contribution of the milk distributed through the tetra pack, UHT milk, etc., to the overall market is still low to be accounted for.

Last year this French food major had turned to the Indian women to crack the competitive Indian market. It has been rightly told by Jochen Ebert that the existing young females, housewives and professionals in the age group of 18-29 will be sustaining the growth of the packaged yoghurt in the country instead of making it at home. The launching of the many new, local dairy products such as stirred dahi, mishti doi, lassi and chaas would be prepared by them.

As such the strategy of Danone in India included the growth of the per capita consumption of dahi in India which is 3 Kg unlike France’s per capita consumption of 30 Kg. Contradictorily, Danone’s own sourcing norms making it difficult to use 90% of the local milk and the highly fragmented India’s retail market making the expansion of fresh dairy products difficult serves a real challenge for Danone.

This Multinational Corporation pursues the direct distribution method of transporting its dairy products from its factory to kirana stores by the means of its own trucks, but it is now also looking to be working with the distributors provided they follow strict quality requirements.

In the last year, Danone wanted full control of the beverage brands Qua and Blue which was being previously manufactured and distributed by the two Joint Ventures, Danone Narang Beverages pvt. ltd and Narang Danone Access pvt. ltd, on the issue of parting ways with their Joint Venture Partner, The Rahul Narang Group. This group had also broken up with the Britannia Industries Ltd nearly five years back.

Danone Access pvt. ltd

Previously the Danone and the Narang Group had unsuccessfully been negotiating valuations for the buyout of the brands by Danone, leading to a clear mismatch in the expectations. According to a report made by a research firm, the Euro monitor International  in July 2014 , Qua had a 0.5% market share in the ready to drink market , where the Bisleri being the largest brand of its kind accounted 22.5 % market share followed by Aquafina at 10.4 % in 2013 .

This French company has been operating globally in the four business segments, namely dairy, bottled water, medical nutrition and infant food, including India.

As such, Danone is having the intention of expanding its existing business in India. It has successfully launched its pouched milk, co-branded with the Dynamix brand in Pune. Earlier it had not launched this product which seems to be a low margin and high volume business for the MNCs like the Nestle and the Danone .This company had been selling its whole new range of value added dairy products  in a country where the milk distributed through the tetra pack, UHT is still low to be considered for.

Fascinatedly, the company is on the way of having plans for increasing the present per capita dahi consumption in our country and also providing the job opportunity for the women folk by expressing the need of women in the manufacturing process of packaged yoghurt.



SOURCE The Hindu Businessline foodnavigator asia