Britannia mulls expansion of dairy business

We will expand international business with focus on countries with Indian diaspora, says report

Food major Britannia is keen to expand its dairy business, which contributes five to six per cent to its annual turnover, as it looks to tap into the sector aggressively. 

In its just-released annual report for the financial year 2016-17, the Bengaluru-based major, whose FY17 turnover was Rs 9,054 crore, said it was evaluating transition of the dairy model to a fully integrated one.

“India has remained the largest producer and consumer of dairy. Looking at opportunity for growth, existing private and cooperative players have  continued to invest in the sector. 

A few private industry players have also announced their entry in the sector,” Britannia said in the report. 

In the past year, Patanjali, Coca-Cola and ITC have forayed into the dairy space. PepsiCo, too, has expressed interest in the market, nudging existing players into action, sector analysts said.

Apart from Britannia, key players in India’s dairy industry include Nestle, Amul, Mother Dairy and Danone.

In its annual report, Britannia said the major growth driver in dairy had been value-added products, such as cheese, dahi and milk-based drinks. “Basic products like pasteurised milk are also growing significantly in absolute numbers,” it said.

The company also indicated that levers of success in dairy were access to quality milk, right product value-addition capability and access to cold chain for fresh dairy products.

Parallely, Britannia said it would strengthen its position in key categories within bakery including biscuits, cakes, rusks and bread, and would enter adjacent segments for accelerated growth.

“We will expand international business with focus on countries with Indian diaspora,” the report added.