'Probiotics market needs more awareness'

The worldwide market for probiotics is ripening fast. However, in India, the market has just been conceived with leading companies like Amul, Nestle and Mother Dairy making the first move.

But for the Japanese global probiotics leader, Yakult, which has entered the Indian probiotics market with a 50:50 joint venture with the French food major, Group Danone, this may be a risk that could either hit gold or hit dirt.

Kiyoshi Oike, managing director, Yakult-Danone India (YDI) tells Radhieka Pandeya how the company will tackle a market that has only just been initiated to the term probiotic.

YDI launched its probiotic drink in December in a very unsure market. What are your expectations from it?

Yes, we have launched (the drink) into a market that is still very new to the concept of probiotics.

But to address this issue, we plan to create an awareness about the health benefits of our drink through house-to-house sampling, seminars and research. We have also introduced "Yakult ladies" in certain parts of Delhi.

These women visit homes and talk to potential customers about the benefits of our probiotic drink. Currently, we are selling through 150 retail outlets in Delhi.

We have already started getting repeat orders. However, we expect our sales to gain momentum from April.

Unlike most other MNCs, not only has YDI stepped into a very shaky market but it has also opened a manufacturing facility in Haryana instead of first testing through export of the product. What kind of strategy do you have in mind?

Our first principle is that if we enter a market, we don't get out of it. We are not in India temporarily.

Our manufacturing facility here has a capacity of one million bottles a day even though currently we are producing only 100,000. We understand the challenge we face here but we are confident of developing and creating the market for probiotics just the way we are currently doing in Vietnam.

In fact, in some countries where we launched our product, it took us almost eight years to crack the market.

In India, we are looking at three years and are confident we'll be able to meet our expectations and break even in that time. So, at the moment we are targeting our consumers not just through retail outlets, but also through schools, hospitals and offices.

Having already invested Rs 136 crore in India, we are going to invest another Rs 100 crore in 2-3 years to develop the market nationally. We have even initiated a very large clinical trial in the country.

The probiotic drink is still not available in the large retail chain stores.

We are still in talks with retail chains like Reliance, Big Bazaar and Spencer's for keeping our product and the agreement should come through in the next 2-3 weeks.

But as part of the company policy, we do not offer discounts or other schemes on our products, not even as an introductory strategy. So, this is an issue that we have to deal with as well.

Also, by the end of this year we will launch in Mumbai, and will spread into other metros over the next three years.

You face competition from very established players like Nestle and Mother Dairy. Also, at Rs 50 for a five-bottle pack, your product is not inexpensive.

Yes, and this will affect our sales initially. But even Nestle India has expressed happiness over our entry into India simply because it gives a boost to the market.

Given the current condition of the probiotics market in India, the more the number of players, the better it is.

At the same time, if any imitations of our probiotic drink enter the market at lower prices, we are certain that people will come back to us for our quality and honesty. It happened in China and it will happen here too. Price is hardly a factor if you are looking for quality and that too when it comes to your health.

What is your biggest challenge in India?

Cold storage and cold distribution chain. These are so underdeveloped in India that we are using our own trucks for distribution and we keep checks on shopkeepers to make sure that our product is being kept in proper cold storage so as to keep the bacteria alive.