Indian dairy giant eyes expansion

Looks at geographical and portfolio growth in order to boost presence.
Munish Soni

Mother Dairy has been a well known brand in the country for a long time now. Mother Dairy products, sold through the company booths, ice cream carts and Safal outlets, have become an indispensable part of our daily lives today. In a candid conversation, Munish Soni, Deputy General Manager, Marketing (Dairy Products), Mother Dairy, tells us about the company’s plans this season and how it plans to expand further.

Vrinda Oberai (VO): Mother Dairy is a known brand in the space of milk and milk products. What steps are you taking to make it more popular with consumers?

Munish Soni (MS): We are taking various steps. When it comes to Delhi-NCR, we are a brand known to everyone. Earlier, we were present just in Delhi-NCR, but now we are expanding to other geographies as well. Broadly speaking, Mother Dairy is roughly a Rs 5,000 crore brand. We have three verticals – the dairy brand called Mother Dairy; the fruits and vegetables brand called Safal; and an oil brand called Dhara.

The dairy product business is divided into the fresh dairy and ice cream verticals, each worth Rs 250 crore. Our ice creams are sold in roughly 40 markets in north India, including in Delhi-NCR. Our ice creams are also available in Mumbai, Pune and Kolkata, and we have recently launched in Bengaluru as well. We will soon be launching in two other markets in the west. As far as the fresh dairy products are concerned, right now we are present only in Delhi-NCR.

We are also present in the curd category in Mumbai. Very recently, we have launched fruit yoghurts in Mumbai. Gradually, we plan to expand Mother Dairy nationally. We will be expanding in the southern markets and we will launch in the east as well.

VO: What is your brand’s USP? What out-of-the box initiatives are you taking with regards to your business strategies in order to survive competition?

MS: Providing best value proposition to the customer is our USP. Eighty per cent of our focus goes into making a good product.

Mother Dairy is not the most advertised brand, neither is it the most visible brand. But, the focus is on giving the best value proposition to the customer, as well as making a differentiated product in comparison to the competition. For instance, we have a benchmark called 60:40 product, wherein we have our products tested in blind with the competition’s products. According to this benchmark, 60 per cent of the products should be rated as better than competition. If that does not happen, that product goes into renovation. For instance, for the Mishti Doi launched in 2000, we had to increase the price from Rs 5 to Rs 9 in view of the inflationary pressure). But we realised that the value proposition of the product was lower – at that price point, the product had started competing with ice creams. We re-worked on the same over a period of time, re-did the

packaging, changed the composition, etc, and now, Mishti Doi is giving more than 200 per cent growth in this particular category.

The business strategies differ from category to category. For us, the foremost is differentiated product quality. We believe in giving an out of the world product experience to the consumer. For instance, our curd is made out of standardised milk with 4.7 per cent fat, unlike other competition, such as Nestle, Amul, etc. Better fat will translate into better texture and a better product experience. We also make it a point to serve it in better packaging.

VO: What is new this summer season? Who is your target audience? How are you planning to cater to them?

MS: Ice cream is about variety and fun. We will be adding 15 new variants, which will be seen in the diet range of ice creams as well as in the three main categories for ice creams – impulse (cones, etc); take home (picked up on the way and enjoyed with family); and galloons (institutional business).

We are doing well in the kulfi space. The primary challenge for us was to figure out how to industrialise this product. So, we launched flavours like pan kulfi, rabri kulfi, etc.

Our target audience differs for different products. For example, the probiotic milk and lassi are enjoyed by all, the licklollies are loved by kids while cones and bars are more popular among the youth.

VO: What steps are you taking to engage your customers?

MS: We do cross category promotions, wherein we give out some freebies with our products. For instance, we were giving out Camlin colours with the cheese. When we launched yoghurts in Mumbai, which was a new thing there, we gave 100 grams of yoghurt free with curd. As a result, we got a very good response.

VO: From which region and from what product category do you draw your maximum revenue from?

MS: As far as the regions are concerned, the bulk of our business comes from Delhi-NCR. Now, we are focusing on Mumbai, and we will see the shift happening soon. We are registering good growth in Mumbai, and we expect it to do better than what we had initially experienced in Delhi.

In terms of products, ice creams and fresh dairy each contribute to 50 per cent of our revenue.

VO: What are your plans for the regions that are not going that strong?

MS: Different regions have different nuances. For instance, east is the most cost conscious region. So we have to design our product portfolio and propositions keeping that in mind, and then decide the price of the product accordingly.

VO: How many POS do you have at present? How many do you want to achieve by the end of 2012?

MS: We have 1,000 capital outlets in Delhi-NCR. The Mother Dairy curd is being sold through 15,000 retail outlets, ice creams through 80 SKUs and fresh dairy products through 25 SKUs.

VO: What are the criteria for owning a Mother Dairy kiosk?

MS: Owning a booth involves many factors, including capital cost, acquiring land, viable business proposition, etc. The confessionals are appointed by the deputy general of rehabilitation. At present, we have booths only in Delhi-NCR.

When it comes to ice cream vends, we ensure that the person owning it has integrity. We have about 4,500 carts vending ice creams in Delhi-NCR. We do not have any specifications for location, but we do ask them to operate in the areas that are important for us. For instance, we tell them that we should have 30 carts in the India Gate area.

VO: What are your future plans for the domestic market?

MS: We will expand our portfolio in locations where we are not present or where we have a limited number of product offerings. We will also launch new variants, new range of ice cream and innovative products in the fresh dairy category. We are looking at a combination of portfolio and geographical expansion in the days to come. 

Munish Soni
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