Wednesday, 11 December 2019 10:55

Co-op eyes $1b sales in Indian JV

Written by  Sudesh Kissun
Fonterra Future Dairy chairman Sunil Sethi. Fonterra Future Dairy chairman Sunil Sethi.

Fonterra is hoping to build a NZ$1 billion joint venture dairy business in India within seven to 10 years.

This follows a flying start to its joint venture, Fonterra Future Dairy, with Indian retail giant Future Group, launched June this year.

Within five months of launch, the Dreamery brand products are building an impressive market share: milkshake 16%, curd 10% and toned (flavoured) milk 6%.

Fonterra Future Dairy chairman and the co-op managing director Sri Lanka and Indian subcontinent, Sunil Sethi, says consumer demand for dairy in India over the next seven years is expected to increase by 82 billion litres.

The value added dairy sector will grow 50% faster than the dairy sector in the next seven years.

”India consumes 170 billion litres of milk every year ... the opportunity is huge,” Sethi said.

Fonterra has also launched its Anchor Food Professionals, targeting high end hotels and restaurants.

Sethi says Fonterra’s joint venture in India is “capital light” but based on profitability and growth. The co-op hopes to meet the $1b target in 7-10 years.

Sethi was in Auckland last week with Future Group executives to brief the board on progress. He told journalists the growth in value added dairy is driven by evolving food habits.

More Indians are now moving into packaged foods, spurred by changes in lifestyle and for convenience.

“They also tend to trust packaged foods as opposed to unpackaged foods.”

More Indians are also comfortable buying cottage cheese and yoghurt from a store, rather than consuming home-made products.

“Fifteen years ago if I were to get curd from the market that would have meant disrespect for my mother and grandmother, almost implying they don’t know how to cook.

“But today people get curds delivered to their homes: the trend of moving away from home-made dairy to getting it from outside is a big driver.”

Dreamery products are now available in about 3000 general stores in the key cities Mumbai, Pune, Bangalore and Hyderabad.

Although made from milk sourced from Indian dairy farms, the product packaging highlights Fonterra’s 130 years of dairy expertise.

Milk is purchased from chilling stations and tested twice: once at the chilling station and then at the processing plant gate.

Fonterra Future Dairy products are made by Schreiber Dynamix, a third party milk processor in India for many.

Milk in India

• 25% of food spending attributed to dairy

• 40% of people are vegetarian; dairy considered key source of protein

• Value of dairy is unchallenged due to its importance in Hindu mythology and scriptures

More like this

From coal to pellets

Fonterra is on track to meeting an interim target of achieving a 30% reduction in emissions by 2030.

Is he the right Guy for Fonterra?

Former Primary Industries Minister and Fonterra board aspirant Nathan Guy believes his relationships with bureaucrats in Wellington will help the co-op’s farmers immensely.



Stop making decisions for farmers

OPINION: From my observations of general media reporting it seems that in today’s world no one wants to take responsibility for their actions.


Effluent expo canned

The Effluent & Environment Expo, scheduled for early November in Hamilton, has been cancelled.

Fonterra back in the black

Fonterra chief executive Miles Hurrell says 2019/20 was a good year for the co-op, with profit up, debt down and…

Machinery & Products

Clear cut fodder

CLAAS Harvest Centre product manager, Luke Wheeler, says the end goal should always be the starting point when making purchasing…

Good mower an essential tool

Third-generation dairy farmers Hayden and Tania Edmeades run 500 dairy cows and associated young stock over 190ha near Putararu in…

Mowers get a makeover

Well known throughout New Zealand over the past 18 years, Pottinger has redesigned its rear-mounted Novadisc mowers to incorporate a…

Hardy spotlight

High quality, reliable lighting is essential for anyone involved in agriculture or the great outdoors.

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Eyes have it

OPINION: Painting eyes on the backsides of cows could save their lives, according to new research by Australian scientists.

Walkers versus cows

OPINION: A North Yorkshire teacher has become at least the second member of the public to be trampled to death…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter