J K Group to foray into flavoured milk business

To take on Amul, Mother Dairy

J K Organisation promoted Umang Dairies is expanding its product portfolio and venturing into the flavoured milk segment to take on players such as Amul, Mother Dairy, Vadilal Industries and Kwality Dairy.

The company is in the process of launching flavoured milk under the ‘Doodz’ brand in five flavours in Delhi and the National Capital Region.

“We have recorded consistent growth in the dairy business over the last five years. As per our expansion plan, we have decided to foray in to the flavoured milk category under brand ‘Doodz’. The product will be launched initially in Delhi-NCR and later introduced nationally”, informed a senior executive in the company. Doodz will be made available at 5,000 retail outlets in Delhi-NCR in elaichi, kesar, cappuccino and butterscotch flavours.

The processing and bottling of the new product is taking place at the company’s facility in Gajraula. The unit has the capacity to produce 20,000 bottles or 3,600 litres of flavoured milk every day.

The flavoured milk market in India is estimated at about Rs 500 crore which is expected to grow at more than 20% annually, according to a study by an independent market research agency.

Not only the home-grown dairy companies, multinationals such as Danone had, in 2010, a test launch of Choco Plus which was priced at Rs 15 for 200-ml packs. That time, it was operating in India in joint venture with Britannia Industries.

Nestle had also entered the flavoured milk segment in 2007 by extending its Milkmaid brand into milkshakes, Milkmaid Funshakes which was initially launched in south Indian markets.

Britannia, however, had entered the flavoured milk segment with the launch of Actimind in 2009.

Vadilal’s Power Sip is priced at Rs 18 for 180-ml bottles and is available in different flavour like rose, elaichi and kesar. The company has plans to introduce more flavours like chocolate, badam and coffee during the year. Mother Dairy sells flavoured milk in the brand names Nutrifit and Chillz.

The Gujarat Co-operative Milk Marketing Federation (GCMMF) that markets brand Amul sells its flavoured milk brand Amul Kool in three different flavours elaichi, kesar, rose. The 250-ml packs are priced at Rs 30.

Besides, Kwality Dairy, Amrit Foods and Param Dairy also have presence in the flavoured milk segment.

Umang Dairies is India’s third largest seller of branded dairy creamers after Amul and Nestle. The company on an average sells six million consumer packs (SKUs) of dairy creamers every month. The company also has tie-ups to supply single serve sachets of White Magik dairy creamers on Rajdhani and Shatabdi trains on Indian Railways and in Air India. It also markets dairy creamers compatible with tea and coffee vending machines to Coca-Cola globally.

The executive informed that the company is exploring possibilities of acquiring an existing dairy company having some synergy with its product portfolio to grow inorganically.

Umang Dairies reported a growth of 16% in revenues from operations at Rs 178.30 crore for the year ended March 31, 2013 as compared to Rs 150.21 crore recorded the previous year. While operating profits increased by 16% to Rs 18.29 crore, profit before tax went up 17% to Rs 16.17 crore