ITC to expand dairy biz, with pan-India foray into Rs 15 bn milkshake mkt

Will also launch paneer shortly, is also working on cheese and Tetra Pak milk

Having already entered the fresh dairy segment recently in West Bengal and Bihar with the launch of pouch milk and curd, ITC is now looking at expanding its dairy segment and is mulling launch of new products, some of which will be sold pan-India. 

“We will enter the milkshake category in the next couple of months and will also launch paneer shortly. There are teams working on cheese and Tetra Pak milk categories,” said Hemant Malik, Divisional Chief Executive–Food at ITC Ltd.

While the company has narrowed down on the former two categories, the latter two are under consideration. 

The milkshake (flavoured milk) category in India is pegged at Rs 15 billion and ITC is most likely to come up with a kesar badam and fruit variants in milkshake. 

Although the previous launches in the dairy segment has been under the Aashirvaad brand, the milkshake will be under a different identity. 

It will be manufactured at its Kapurthala plant in Punjab, where ITC has already invested Rs 8-10 billion. Spread over 65 acres, this plant also produces atta, snacks, noodles and other products. 

Malik said the launch will be pan-India and as ITC scales up the dairy business across the nation, it is most likely to focus on markets where it has core distribution and procurement strengths. These markets are in Uttar Pradesh (wheat procurement), Madhya Pradesh (soya), Andhra Pradesh (tobacco) and Karnataka. 

Paneer, on the other hand, will be sold largely in the Bengal-Bihar region. 

“In the fresh dairy segment, the focus will be on Bengal and Bihar at least in the coming six months. But if we see a larger opportunity and the category expands, we may opt expansion into other states as well,” Malik said. 

After 10 years of wait-time, when it was setting up its back-end and procurement channels, ITC first launched pouch milk and curd in Munger and Patna in Bihar, marking its entry into fresh dairy which requires cold storage channels. Recently it began selling these products in Kolkata as well. The company had first entered the dairy vertical in 2015, with the launch of ghee under the under Aashirvaad Svasti brand in south India. The ghee has been extended to markets in Delhi.

The company will be supplying milk from Munger to consumers in Kolkata, but has worked out a local procurement model as well.

ITC is focussing on region-specific products as consumer tastes and preferences vary across geographies.