French dairy company Danone, which is already distributing yogurt and smoothie products to consumers in Pune, Mumbai, and Hyderabad, has plans for a project targeting low-income Indian consumers by year-end 2011. The project will explore how to market various products with differing price points to BOP consumers. The company is currently establishing its cold chain in preparation for expansion across the country. Raghuvir Badrinath / Bangalore April 08, 2011, 0:23 IST

French dairy firm Danone is chalking out a measured expansion plan in India. The corporation, which reported $20 billion in global revenues for 2010, has been in India for a little over a year and has introduced yogurt, dahi (curd) and smoothie product range in Pune and Mumbai. It is now focusing on Hyderabad.

Danone Dairy India Chief Financial Officer (CFO) Sudip Dasgupta told Business Standard they were expanding in a measured way as they wanted to get the backend cold-chain distribution in shape, “which is the major element” in dairy business. According to the company, the pack rotation is much better when its products are stored in its own refrigerators rather than having them at third party coolers.

“We are particular on delivering a good product and have been working on getting this supply chain in place. It is not easy to go pan-India unless we have this in place,” he said. The company has outsourced the production to Dynamic Dairies in Pune.

The company, which is up against Nestle, Britannia and Amul, has entered the Indian yogurt and dahi market, which is estimated to be a little over Rs 500 crore, in the organised sector. “While the organised side is a big market, we are parallelly opening up to the unorganised segment with our products. This is, at least two, to three times bigger than the organised segment and we see big potential in numerous households where dahi is made at home,” he said.

According to Danone Dairy India, the per-capita consumption in India for this segment of dairy products (dahi and yogurt) is at 0.5 kg while in European countries the average is around 30 kg. “India has several players and we would love to grow the market along with them. We see immense opportunities to grow the market in India and we are charting out plans for a range of products in the near future,” Dasgupta said.

The company is embarking on its nutrition positioning in India by introducing its dahi range of low-fat fortified product, while yogurt comes in different flavours. Even as the company is embarking 360 degree marketing and brand campaigns, it has taken an innovative route for on-ground activation in Mumbai where they are converting some bus shelters into mini gymnasium and enticing people to opt for healthier lifestyles.

Danone has been present in Mumbai and Pune at more than 100 modern retail outlets and also at 1,200 neighborhood shops in these markets, and the growth has been around 50 per cent. The company, is focusing more on the modern trade and has gained presence at around 230 retail chains. It recently re-launched the smoothies segment after it found the product was more suited for teenagers and not children.

Retailed under the brand Danette, the company has been activating various consumer points with focus on colleges.

Danone India is also preparing a Base of the Pyramid project for India, which will be launched during the third quarter of 2011. “This is a project which will look at affordable products from factories at various points, which will enable us to tap the base of the pyramid population. We had conducted a similar project in Bangladesh,” he said.