Milk 09 Flavors Report

7/28/2019 Milk 09 Flavors Report

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By Juhi Sharma

V

alue-addition has not only helped manufacturers in tighteningtheir grip in the healthy beverage category but has also cre-ated enough shelf space for other corporate giants to explorethe market potential. Can milk-based beverages be next highgrowth segment?

Innovation has always playedkey role in expansion and creatiof any category the innovationprocessing coupled with innovatiin packaging of raw milk, pavway for an alternate healthy bevage segment. Today the packagmilk and milk-based beverage sment offers everything from plapasteurised variants of milk suas toned milk, double toned mi

FoodFoodS U P E R M A R K E T

B U S I N E S S

Manufacturers are finding new

reasons to add flavour to milk.

Manufacturers are finding new

reasons to add flavour to milk.


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skimmed milk, ultra-high-temper-ature (UHT) pasteurised milk, fullcream milk, standardised milk tofortified milk and slew of ready-to-drink (RTD) milk-based beverages flavoured milk, milk shakes, coldcoffees, butter milk, yoghurt basedtraditional Indian beverages lassi andthandai, herbal milk drinks, milk-

based sports drinks and probioticmilks.

India is the largest producer ofmilk and as per National Dairy De-velopment Board (NDDB)s estima-tion, the country produced 102 mil-lion MT of milk in 2007-08, withannual value worth Rs 1,232 billion.It has been estimated that 46 percentof the milk is consumed in a liquidform. Going by the market trend, wefind that Indian consumers slowlybut surely opting for healthier bever-age alternatives has resulted in an es-

timated Rs 400 crore ready to drinkmilk-based beverage market.In urban areas a significant num-

ber of households today are guzzlingup packaged milk, with most Indiansliving in rural areas still preferring toconsume fresh non-pasteurised loosemilk delivered at the door step froma small neighbourhood dairy farm.This non-pasteurised milk is firstboiled at home before being con-suming in any form.

According to a study conductedby the market research firm IMRB,

the packaged milk sales in the ur-ban areas witnessed an increaseof 13 percent between July2007 and June 2008.

Rising awareness abouthygiene and adulteration of

loose milk has led to a shiftamong consumers in ur-ban areas to packaged milk.Also, the furore over pesti-cide content in carbonatesin 2003 and again in 2006has influenced consumers toopt for healthier milk-basedbeverages.

Endorsing this trend,Kiyoshi Oike, managing di-rector, Yakult Danone India(YDI) Private Limited, re-marks, There is a greaterinclination to self care and agreater awareness about the

functional benefits of dairybased beverages. There is also a

greater willingness to pay a pre-mium for health beverages. As Indi-ans become more health conscious,milk-based products are findingmore takers than juices or carbon-ated drinks.

The segment overview suggeststhat milk-based beverages have fur-ther diversified with the entry of newplayers and brands, offering morechoices. During the last couple of

years value addition in the segmenthas been complemented by the entryof international flavours such as mo-cha, hazelnut etc. Many flavouredmilk manufacturers have bankedupon introducing ready to drinktraditional Indian beverages such asthandai, lassi, kesar-pista flavouredmilk etc.

Probiotic milk is a new entrantin this segment. A fermented milkproduct further enhanced by supple-mentation of probiotic bacteria suchas Lactobacillus and Bifidobacterim

species, probiotic milk generally re-fers to a living microbial supplement,which beneficially affects the host byimproving its intestinal microbialbalance.

Fortified milk, another recentdebutant, adds nutrient componentssuch as Omega-3 etc. to base milk.

Innovation in processing aloneespecially in the case of perishablemilk wouldnt have been accessiblewithout innovation in packaging.Today, packaged milk is being re-tailed in polythene packs, Tetra Pak

cartons, with milk-based beveragesbeing packed in glass bottles, easy-to-open metal cans and Tetra Pakcartons.

In October 2008, Tetra Pak an-nounced to invest around approxi-

mately Rs 5.7 billion to build a newstate-of-the-art packaging materialmanufacturing plant in India to meetgrowing demand of the Indian dairyand beverage industries. The newplant will have an initial capacity offour billion standard (1-litre) pack-ages per year. The capacity of TetraPaks existing plant in Pune is 1.8 bil-lion standard packages. Todays plant,which started commercial operationsin 1997, currently produces packag-ing material for Tetra Fino Aseptic,Tetra Classic Aseptic and Tetra BrikAseptic packages.

Driving brands

The segment is fragmentedamongst a number of regional play-ers, supermarket private labels and afew national brands owned by ma-jor dairy cooperatives, multinationaland private companies.

Following are some of the chiefnational players.

Amul, which is considered tobe the category leader with ap-proximately 70-75 percent market

share, pioneered in the year 1946.It is the flagship brand of GujaratCooperative Milk Marketing Fed-eration (GCMMF), Indias largestmilk products market-ing organisation anda state level apex bodyof milk cooperatives inGujarat. GCMMF hastotal milk handling ca-pacity of 10.21 millionlitres per day. Amulsproducts are availableacross the country at

various retail formatsand through Amulparlours created inAhmedabad, Banga-lore, Baroda, Delhi,Mumbai, Hyderabadand Surat. Amulslarge milk portfoliooffers:

Fresh milk range Amul Taaza toned milkwith three percent fat,Amul Gold full creammilk with six percent

fat, Amul Shakti standardised with 4.5 percent fat, Amul Slitrim double toned milk coning 1.5 percent fat, Amul Sskimmed milk and Amul cow All these milk variants are ava

in polythene packs.Ultra-high-temperature (Upasteurised milk Amul Sthree percent fat milk, Amul T1.5 percent fat milk, Amul Goldpercent fat milk, Amul Lite Sn-Trim milk with zero percenAmul Shakti toned milk. Theseants are available in Tetra Paks.

Milk-based beverages AKool flavoured milk available inants of mango, strawberry, safcardamom, rose and chocolate, AKool Cafe, Amul Masti spiced bmilk, Amul lassi, Amul ThandaAmul Stamina a sports and fidrink in lemon and orange flavAmuls milk-based beveragesavailable in glass bottles, Tetrabricks and cans in varying sizes.

Amuls sports drink Staminaeffort to harness the untapped sand fitness drink market in ICurrently, Amul is the only playthis whey-based drink category.

Mother Dairy Delhi was sin 1974 under the legendary Otion Flood programme. It is nwholly owned company of ND

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Mother Dairy markets milk to mostparts of the country through its ex-clusive Mother Dairy outlets andother retail formats. Its milk andmilk-based beverage range offers:

Milk full cream milk, stan-

dardised milk, toned milk, doubletoned milk, skimmed milk andcow milk, all available in polythenepacks.

UHT milk toned and doubletoned milk in Tetra Pak cartons.

Milk-based beverages flavouredmilk made from double toned milk,available in kesar-elaichi, chocolate,cold coffee and vanilla flavours underthe brand Chillz, and lassi in sweetand salted variants. Mother Dairysmilk-based beverages are available inglass bottles and Tetra wedge asepticpacks.

Probiotic milk Mother Dairysb-Activ lassi is made up of the uniqueprobiotic culture BifidobacteriumBB-12. The unique fermentationprocess and the availability of Bifi-dobacterium BB-12 makes b-Activa healthy complement to the regulardiet, mainly enhancing the bodysnatural digestive system and nutrientabsorption capability. It is availablein an easy-to-use plastic cup.

Nutrifit is the probiotic milkfrom Mother Dairy. It containsbillions of LA5 friendly bacteria,

which strengthen the bodys de-fenses against infections and diseasesover time. It is available in mangoand strawberry flavours in attractiveplastic bottles.

In Delhi and NCR Mother Dairyalso provides homogenised milk for-tified with vitamin-A through a bulkvending token milk booth system.

Another national player in thesegment is Nestle India, which is asubsidiary of Nestle S.A. of Switzer-land. Nestle has over 135 years ofdairy expertise and Nestle as an In-

dian subsidiary incepted in the year1961 currently offers:Milk Nestle toned milk avail-

able in all metros, Nestle Slim milkwith fat content of less than 0.5 per-cent.

Fortified milk Nestles Nes-vita Pro-heart is everyday milk withOmega 3 heart-friendly nutrientsscientifically known to help managecholesterol. It is available in selectmetros.

Milk-based beverages NestlesMilkmaid Funshakes, a range of

great tasting and healthy dairy baseddrinks, available in five exciting fla-vours chocolate, mango, straw-berry, banana and kaesar elaichi.This product is also being retailed inselect cities.

Nestles entire milk and milk-based beverage range is available inTetra Pak briks.

Kishore Biyani-promoted FutureGroup has recently expanded itsproduct portfolio under the brandSach, co-created by cricket icon Sa-chin Tendulkar. Under the brand,company offers tetra pack milkproducts along with other products.Products under the Sach brand arenot for mass distribution and theywould only be merchandise throughcompanys retail stores. Also sincecurrently the brand is being testmarketed, it is not available pan-India.

Besides these national brands,there are scores of regional playersdominating the segment in specificregions. In North India and spe-cifically in Delhi are the followingprominent players:

Delhi Milk Scheme (DMS) DMS was set up in 1959 withthe primary objective of supply-ing wholesome milk to citizensof Delhi at reasonable prices, aswell as for providing remunerative

prices to milk producers. Today it

manufactures and supplies a rangeof milk and flavoured milk variantsto its consumers. It has been mainlyprocuring raw/fresh milk from theState Dairy Federations of the neigh-bouring states and some quantity ofmilk from the co-operative societiesto augment the supplies.

Paras Dairy An organisationinvolved in quality milk collectionpractices since 1960, it has a strongrural procurement network compris-ing more than 3,000 villages acrosswestern Uttar Pradesh in North In-dia. It is considered to be a largestmarketer of polypack milk in Delhi.It currently offers array of productsin the category.

Global leader in probiotic prod-ucts Yakult Honsha of Japan en-

tered into a 50:50 joint ventureagreement with the dairy majorGroup Danone of France toform Yakult Danone India(YDI) Private Limited andlaunched Yakult probioticdrink last year. Yakult is theonly probiotic drink thatcontains more than 6.5billion beneficial bacteria Lactobacillus casei strainShirota, named after its

founder Dr Minoru Shirota in a small 65 ml bottle.Besides Delhi, it is availablein most parts of North In-dia.

Amrit Food, a divisionof Amrit Corp Limited, wasestablished in 1991, andis recognised as one of theleading producers of vari-ants of pasteurised and UHTmilk, along with an exciting

range of flavoured milk. Am-rit Corp Ltd is a major player in

the category in Delhi and other paof North India.

In 2008, Amrit Food launchthe Gagan Caf milk-based bevage range, offering four internationcoffee flavours hazelnut, caramvanilla and cappuccino in attractdisposable bottles.

Gopaljee Group, which has thdairy plants in the country, begits journey in the year 1989. It crently offers variants of milk and fvoured milk, along with other daproducts to consumers in Delhi aNorth India.

Moving on to Kolkata, one finthat apart from the national dabrands, Metro Dairy is the only m

jor regional player in the segmeMetro Dairy offers variants of pacaged milk along with other daproducts.

From the south, specifically Bagalore, following are leading regioplayers dominating the market:

Karnataka Cooperative Milk Pducers Federation Limited (KMthe apex body in Karnataka repsenting dairy farmers co-operativIt is the third largest dairy co-opetive amongst all dairy cooperativesthe country. In South India it ran

first in terms of procurement as was sales. One of the core functioof the Federation is the marketiof milk and milk products. KMbrand Nandini is a household nafor pure and fresh milk and mproducts in the region.

Tirumala Milk Products Ltd, which was established in tyear 1998, is centred at the depotGudur, Andhra Pradesh. Tirumproduces a variety of milk and mibased beverages and other mibased products.

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The Heritage Group, foundedin 1992 by Sri Nara Chandra BabuNaidu, is one of the fastest growingprivate sector enterprises in India,with significant presence in dairysector. Heritages milk products have

market presence in Andhra Pradesh,Karnataka, Kerala, Tamil Nadu andMaharastra and its retail stores @Fresh across Bangalore, Chennaiand Hyderabad.

Tamilnadu Co-operative MilkProducers Federation Limited, pop-ularly known as Aavin, was regis-tered in the state in February 1981.Some of the commercial activities ofAavin are milk procurement, pro-cessing, chilling, packing and sale ofmilk and milk-based beverages to theconsumers.

The Nilgiri Dairy Farm Ltd isanother leading player in dairy sectoroffering milk, milk-based and othervalue added products.

Hatsun Agro Product Ltd is a pri-vate sector ruler in dairy business inSouth India. It offers an array of milkvariants under the brands Arokya,Komatha and Santosa.

MTR Foods Limited is amongstthe top processed food manufactur-ers in India. It offers a range of fla-voured milk in the category.

Kodai Dairy Products (P) Ltd.is another dominant player, which

marked 35th year in business in2008, as a local family-owned Dairyin Kodaikanal. Srikrishna Group,which opened the first private sec-tor dairy in Karnataka in 1989, isengaged in procurement, processing

and distribution of milk in Northand South Kanara districts of Kar-nataka.

There are a number of regionalmanufacturers and marketers inWest India as well. Primary among

them are Kolhapur District Co-operative Milk Producers UnionLtd, which was established on 16thMarch 1963 under the Co-operativeAct. The dairy co-operative intro-duced its milk and wide range ofdairy products into the market un-der a now-popular brand Gokul.Parag Milk Foods Pvt. Ltd., whichsells milk and other products underthe brand Parag and Gowardhan,and Mahananda Dairy and two ofthe other popular distributors.

Brand promotion

For any kind innovation toreach consumers, awareness and in-formation needed to be disseminat-ed about availability. For instance,Mother Dairy has always bankedintelligently on consumer specificbranding activities by employ-ing Above the Line promotionaltools T.V commercials, print ads,hoardings at various traffic intersec-tions and posters on the walls ofcolleges and other places. In fact,the Nutrifit Campaign 2008 by

Mother Dairy was adjudged as thebest campaign in the nutri-market-ing category at the InternationalDairy Federation Marketing awards2008.

Mother Dairys previous low fat,double toned milk commercial

depicted its essentialconsumption for health

con- s c i o u sp e o p l esweatingit out in

gyms and

fitness cen-tres, whileits full cream

milk commer-cial displayed the

importance of milkfor growing chil-

dren. The companystoned milk commercial

showed a pregnant wom-an and elaborated on toned

milks balanced proportionof cream content, which is necessaryfor expectant mothers.

Rival Amul has alsobeen active in endors-ing its brand portfoliothrough television,print and other activi-ties. For instance, one

of Amuls milk printcampaigns carries thetagline Have a little ofnatures goodness ev-ery morning. Anothercampaign displaysmilk being pouredinto a glass with themessage Containinglush green meadow,early morning dew andsunrises.

Amuls sports drink,Stamina, has beenendorsed by ApolloHospitals Group. Be-sides, Amul sponsoredan event called Har-mony a marathonfor senior citizens inJawahar Lal NehruStadium, Delhi. Apartfrom these GCMMFhas been involved inorganising events, contests and spon-soring TV shows as a brand promot-ing activity.

In case of Future Groups SachTetra Pak milk, its the celebrity

cricketer, Sachin Tendulkars asso-ciation with the brand and his photoand signature on the carton servingas the promotion campaign.

In order to promote its probi-otic drink brand, Yalkult introduceda unique home delivery systemthrough sales representatives referredto as Yakult Ladies. Yalkults uniquemarketing strategy has played a criti-cal role in building awareness. Acrossthe world Yakult Ladies go door-to-door and help the consumers un-derstand the health benefits of the

product. In addition the companydistributed Yakult throughout tradi-tional and modern retail outlets.

Commenting on the importanceof promotional activities, Oike says,Since probiotic is a relatively newcategory, a fair amount of money isneeded for advertising and promo-tion activities to build awareness.Not many people know that reputedprobiotic brands contain billions ofbeneficial bacteria that reach the in-testines alive to impart various healthbenefits.

Significant and intensive promtional activities are especially imptant for spreading awareness aboprobiotic milk drinks and fortifmilk, as they are new entrants. F

Tetra Pak milk, its comparativhigher price point may have restried faster growth, which also can addressed by spreading awarenand educating people about its spcial benefits.

Bottlenecks

Even though India is the largproducer of milk in the world, for other perishables and processfoods in the country, the milk amilk-based beverage segment is a

a victim of inefficient supply chaicold storage and distribution nworks.

Supporting this view, Oike coments, The biggest hurdle todis the shortage of cold storage vaand trucks and the lack of cold stage facilities in retail. Even the ganised players often turn off tcold storage units at night, makidairy products vulnerable. Ideally need to improve the cold storage frastructure, so that it is at par winternational standards.


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Though innovations and devel-opments have been emerging, thevalue added milk segment in thecountry lags behind other top milk

producing countries. For instance,in USA, some of the flavoured milkoptions targeting children includechocolate malt, cookies and cream

Variants Packaging Price (Rs)

Amul

Amul Tazza milk 1 litre Tetra Pak brik 32

Amul Tazza toned milk (NER) 1 litre Tetra Pak brik 35

Amul Shakti toned milk 1 litre Tetra Pak brik 33

Amul Gold milk 1 litre Tetra Pak brik 35

Amul Gold Milk (NER) 1 litre Tetra Pak brik 36

Amul Lite Slim-n-Trim milk 1 litre Tetra Pak brik 38

Amul Calci+ milk 1 litre Tetra Pak brik 35

Amul Kool flavoured milk (kesar, elaichi, rose) 200ml bottle 12

Amul Kool flavoured milk (kesar, elaichi, rose,

chocolate)

200ml Tetra Pak pack 12

Amul Kool flavoured milk (mango, strawberry) 200 ml Tetra Pak 15

Amul Kool kesar flavoured milk 250 ml can 22

Amul Kool kesar flavoured milk 1 litre Tetra Pak brik 50

Amul Kool Cafe 200 ml glass bottle 15

Amul Kool Cafe 250 ml can 22

Amul Kool Cafe 200 ml Tetra Pak brik 15

Amul Kool Millk Shaake (mango, strawberry,

banana, badam)

220 ml can 22

Amul Kool Millk Shaake (mango, strwaberry,

banana)

180 ml Tetra Pak brik 15

Amul Masti spiced butter milk 200ml Tetra Pak brik8

Amul Masti spiced butter milk 1 litre Tetra Pak brik 30

Amul Lassi(rose) 200 ml Tetra Pak brik 10

Amul Lassi (rose) l litre Tetra Pak brik 35

Amul Stamina sports drink 200 ml Tetra Pak brik 12

Yakult

Probiotic milk 65 ml plastic bottle 10

Probiotic milk pack of 5 bottles 0

Mother Dairy

Nutrifit probiotic milk 100 ml plastic bottle 10

Toned milk 1litre Tetra Pak brik 33

Toned milk (Assam & NER) 1litre Tetra Pak brik 32

Flavoured milk (Kessar-elaichi, chocolate, cold

coffee)

180 ml glass bottles 12

Flavoured milk (Kessar-elaichi, chocolate,

cold coffee)

250 ml Tetra wedge pack 12

Flavoured milk (Vanilla) 500 ml Tetra wedge pack 20

Nestle India

Toned milk 1 litre Tetra Pak carton 36

Future Group

Sach milk 1 litre Tetra Pak brik 42

DMS

Full cream milk 1 litre polypack 26

Toned milk 1 litre polypack 21

Double toned milk 1 litre polypack 18

MTR

Badam milk ( natural almond flakes, kesar and

cardamom)

250 ml can 25

Chocolate Drink 250 ml can 22

Thandai 250 ml can 20

Herbal drink 250 ml can 20

Health drink 250 ml can 25

Ltd, which plans to enter the business by acquiring around60 small- and medium-sized dacross the country, starting witfour southern states enteringfray, innovation can be expectegather pace.

C. K. Ranganathan, chairand MD of CavinKare says, Wknown for being innovative, anwill do so in this segment too. Tis huge potential in this segmenwe also recognise the fact thamargins are thinner than when pared with products in the percare or skin care space.

Soft drink-majors Coca-and PepsiCo have expressed to expand into milk-based b

ages in India in the days to cIn the past, on gauging a shift fizzy drinks among US consumPepsiCo launched a chocolate under the SoBe brand. The panys joint venture with Starbrolled out Frapuccino, a refrigemilk coffee beverage. Coca-Colthe other hand, ventured with NUSAs beverages division to deChoglit, a skim milk-based chlate-flavoured drink. Some dathe future, such collaborationsalso take off in the Indian retail l

scape.Among retailers that are looat entering the segment as a rouintegrate backwards is Reliancetail, which has had a national plaunch of its milk brand in Hybad, initially for test markeReliance plans to roll out the bacross the country in a phased mner. The company is believed treadying to launch three varianliquid milk family milk, lowand whole milk, along with value added dairy products.

etc.; the ones targeting adults com-prise amaretto and Irish cream vari-ants. Most of these also come inoptions such as fat-free, low-fat, re-duced fat. These flavours are also for-tified with vitamin D and phospho-

rus. There are also plenty of organicmilk brands to be found.In Europe, dairy is the biggest

area for human food applications andprobiotics are set to reach USD137.9million in 2010, with the US marketprojected to reach USD 394 million,according to Frost & Sullivan, Oikepoints out.

In India the category is in its na-scent stages.

For branded players, a currentarea of concern is the adulterationof packaged milk and milk prod-ucts. Numerous cases of the use ofharmful synthetic milk white liq-uid made from fertilisers and otherchemical substances by some greedydairy owners has already beenhighlighted across Indian media. InJuly 2007, law enforcement officersraided one such factory in UttarPradesh and confiscated 1,000 litresof fake milk.

Way to go

Success in the category dependson developing cost-effective and ef-

ficient procurement, storage anddistribution network and invest-ing in advanced technology-drivenprocessing equipment. That wouldsupport more creative innovation inthe marketplace. The flavoured milksegment has plenty of room to ac-commodate more flavours; probioticmilk needs proliferation and milkcan be fortified with more nutrientsto deepen the category. The whey-based milk category, which currentlyhas only Amul as a brand, also offersa ground full of promise.

According to Oike, milk forti-fied with extra calcium and iron willbecome popular in times to come.Also, leveraging the intrinsic appealof traditional Indian ingredients bydelivering them in a convenient, hy-gienic and ready-to-drink form cancreate a whole new category that willderive its strength from trusted ethnicingredients. Probiotic beverages willalso flourish because of their associ-ated health benefits, he projects.

With FMCG majors suchas Chennai-based CavinKare Pvt.

Milk 09 Flavors Report

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