Danone Looks at Measured Expansion In Country

Monday, April 11, 2011

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.

Source: Business Standard (link opens in a new window)