France's Groupe Danone is merging its distribution operations in India with its probiotic drinks joint venture Yakult Danone India for better synergies, a year after it split with the Wadia Group.
"Both companies are building businesses in categories that are not established within the retail reality in India. There are significant synergies in doing this," said Jochen Ebert, general manager of Danone, the French foods giant that sells low-fat curd, flavoured yogurt and smoothies in India.
As a three-month shared distribution experiment, Danone's products have been hitting retail stores together with Yakult since last month. The companies are betting on the growing spending power of the Indian middle class, awareness about foods and mushrooming of supermarket chains.
Earlier, the two had independently set up cold-chain distribution systems. In 2005, Danone and Japan-based food and beverage manufacturer Yakult Honsha entered into an equal JV to introduce probiotic drinks in India.
The probiotic drinks JV Yakult-Danone India, on the other hand, has a distribution presence of 3, 500 outlets across seven locations, including Delhi. It has roped in actress Kajol as brand ambassador and has a door-to-door delivery model, called the 'Yakult ladies system'.