The joint venture with Future Consumer, one of India’s biggest consumer companies, will produce a reange of consumer and food service dairy products to meet the growing demand for high-quality dairy nutrition there, Fonterra global consumer and food service chief operating officer Lukas Paravicini said.
“It will allow us to prepare the groundwork and make the most of our expertise as we enter the world’s largest and fastest growing dairy industry.
“Consumer demand for dairy in India over the next seven years is set to increase by 82 billion litres – seven times the forecasted growth for China.”
The venture, Fonterra Future Dairy Partners, will give the co-op a presence in India.
“The partnership will be driven by growth through profitability.
“The initial stages of the partnership will focus on product development and marketing with the right capital investment made during this period.
“The first consumer products will be launched by the middle of 2019 using both locally sourced milk and dairy products from New Zealand.
“We will also use this time to settle in the partnership infrastructure, learn the market and prioritise geographies,” Paravicini said.
The Indian dairy industry is now transforming itself.
“This has resulted in a big shift away from more traditional, locally-based dairy businesses with limited product and brand differentiation to a new era where more value-added and innovative dairy products are in high demand across the country.”
Fonterra’s Sri Lanka and Indian Subcontinent managing director Sunil Sethi said India is also witnessing the emergence of new fast-moving consumer goods organisations like Future Consumer, which has a deep understanding of the Indian consumer, the experience of working with international partners and a nationwide supply chain and retail network.
“These dynamics have created an opportunity for this partnership where we will focus on leveraging our global dairy innovation, manufacturing and nutrition expertise,” Sethi said.
Future Group chief executive Kishore Biyani said the association with Fonterra comes at a time when the dairy industry in India is flourishing.
“Consumption of milk and other dairy products in India are increasing and will continue to receive strong demand. With Fonterra, Future Consumer will enhance its food and fast-moving consumer goods portfolio and will offer a variety of dairy products which are high in demand and consumed daily,” he said.
Driving the growth is the country’s young population where 70% of people are below 45 years. They are digital, live in urban areas, lead an active lifestyle, have more disposable income and want to consume higher-quality and higher-nutritional dairy products.
Future Consumer is part of the Future Group. It plans to launch 1100 stores this year.
Future Group is present in 26 of 31 Indian states with more than 2000 modern trade outlets and 5000 public distribution outlets and a nationwide cold-chain and ambient distribution network.
