Chandrababu Naidu's Heritage Foods aims to treble revenue in 5 years

Heritage Foods, an entity founded by Andhra Pradesh chief minister N Chandrababu Naidu, proposes to treble its annual revenue in the next five years as it eyes a larger presence in the organised dairy market.

The latter market is estimated at Rs 80,000 crore a year and is seeing Patanjali, Coca-Cola, PepsiCo and ITC entering it, even as the existing ones such as Amul, Mother Dairy and Nestle try to consolidate their presence.

N Brahmani, the daughter-in-law of Naidu and executive director of Heritage Food told this newspaper they were aiming at annual revenue in excess of Rs 6,000 crore by 2020, from Rs 2,328 crore last year. 

“We propose to do this both organically and inorganically,” she said. “Organically, we will focus on value-added dairy. We will also look at acquisitions that are a strategic fit to our business, giving us access into new markets.”

It has taken a step in that direction by acquiring Reliance Retail's dairy business, which received a nod from the Competition Commission of India last month. The acquisition includes brands Dairy Life and Dairy Pure. It will allow Heritage, strong in the south and Maharashtra, to foray into the north, where the Reliance products are available both as packet milk and value-added dairy items.

This is the second acquisition by Heritage in a year. In May 2016, it acquired the assets of Karnataka-based Teja Dairy. This came even as it sold its retail and allied businesses to Future Retail in an all-stock deal, to focus its attention on the dairy segment. As things stand, Heritage now has a presence in all the southern states. And, is getting into the Delhi region, Haryana, Madhya Pradesh, Uttarakhand, Uttar Pradesh, Gujarat, Rajasthan and Odisha. Its milk processing capacity is nearly 1.4 million litres a day, which it proposes to double in the next few years. The company is investing Rs 150 crore in five new plants to improve this capacity, Brahmani said.

She said they were talking to a European dairy company for the manufacture and marketing of yoghurt in India.