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Business – Britannia to enter flavoured milk mart

Raghuvir Badrinath

Even as GlaxoSmithKline Consumer Healthcare is getting into biscuits and energy bars from its traditional platform of health drinks for children, Britannia Industries from its traditional platform of biscuits is getting into health drinks.

The Bangalore-headquartered Rs 3,500 crore Britannia Industries is set to test market flavoured milk brand Actimind in Chennai starting early October in an effort to build on its nutrition push, which it has been advocating through its biscuit lines.

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Industry sources indicate that this brand – Actimind, available in 200 / 250 ml units is being targeted at urban children aimed at improving the mental ability and is expected to be pitched directly against Horlicks Chilldood launched early this year. This Rs 250 crore market is dominated by Amul with its brand of Kool. A questionnaire sent to Britannia Industries did not elicit any response.

This move by Britannia to enter the flavoured milk market comes a couple of months after it entered the packaged milk business, four years after it exited the segment. Britannia recently introduced UHT (Ultra High Temperature) milk in regular and ‘Slimz’ format, a zero fat and zero cholesterol milk, in Mumbai, Delhi and Bangalore markets. UHT technology helps preserve and retain all the characters of milk and has a shelf life of 120 days.

Britannia’s move to make a comeback into the milk segment comes close on the heels of Britannia buying out New Zealand-based Fonterra in the dairy business. Britannia is expected to invest close to Rs 200 crore for the re-entry besides strengthening its other dairy products business.

Industry estimates indicate this market is valued at close to Rs 750 crore. Amul, the Gujarat-based milk cooperative, is the largest player with around 70 per cent market share. Besides Amul, Mother Dairy, Nestle and Amrit Food are some of the significant players in the flavoured milk category.

Britannia had been operating its dairy business since 2002 through a joint venture with Fonterra and has garnered a good market share in the cheese, butter and curd segments. Britannia’s dairy business has a topline of close to Rs 150 crore and has been reporting losses.

Britannia had entered the milk market in 1997 and during 2004 exited the segment as milk prices rose and its sourcing was not as streamlined as it was aimed to be. The main problem, according to industry analysts, was that Britannia was sourcing milk from dairies which used to source milk from farmers, adding to cost overruns and was not insulated from price fluctuations.

Britannia’s move to re-enter the segment comes nearly a year after its erstwhile French shareholder Danone along with its Japanese joint venture partner Yakult has invested around Rs 150 crore and is expanding its presence in the fermented probiotic milk drink.

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September 23, 2009 - Posted by | Uncategorized |

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