Fonterra, the world’s biggest dairy exporter has entered into an equal joint venture with Future Group to launch dairy products in India.
With revenues exceeding $14 billion, Fonterra is New Zealand’s largest firm and twice the size of India’s Gujarat Co-operative Milk Marketing Federation, that sells Amul. The group’s fast moving consumer goods arm Future Consumer (FCL has nearly three dozen brands, half of which is sold at its flagship Big Bazaar stores and nearly 21% at retail firms that it acquired including Nilgiris, Heritage and Easy Day.
“ Within the dairy space, we will launch new categories and innovative products for India’s new age customers,” said Kishore Biyani, ceo at Future Group. “Its a segment where consumers indulge over 3-4 times a day. We will merge our existing Nilgiris dairy business into the new firm”
Fonterra Co-Op was formed after two major dairy co-operatives – Kiwi Co-operative Dairies and New Zealand Dairy Group merged with the New Zealand Dairy Board in 2001. A year later, it entered India through a joint venture with Britannia but exited in 2007.
The JV – Fonterra Future- will launch its first product by mid-next year on retail shelves and will also have direct to home subscription model.
“It will allow us the prepare the groundwork and make the most of our expertise as we enter the world’s largest and fastest growing market. Consumer demand for dairy in India over the next seven years is set to increase to 82 billion litres – seven times the forecasted growth for China.
FCL, which counts Arisaig Partners and Verlinvest as its investors, has been building distribution network beyond its own stores – it partnered Indo-Nissin to sell products at kirana stores and also has partners such as Tata StarBazaar, Metro and Spar, besides 5,000 Rajasthan fair price shops. In addition, the Company has also built a rural wholesale club model through Aadhaar in other states in Western India.
Last fiscal, FCL launched more than 400 new products and stock keeping units (SKU) and posted 42% rise in revenues to Rs3,005 crore. The company also has a host of other global tie-ups including Hain Celestial to manufacture and sell food products in the health and wellness space and Mibelle AG, a division of Migros Group, Switzerland, to make a range of personal-care products under the brand Swiss Tempelle.
By: Sagar Malviya
Source: The Times Of India