Tuesday, 02 July 2019 11:55

Fonterra back in India

Written by  Sudesh Kissun
From Left to right: Fonterra Future chief executive Ishmeet Singh, Fonterra India and Sri Lanka managing director Sunil Sethi, Future Group chief executive Kishore Biyani and Fonterra strategic portfolio management director Chris Gree. From Left to right: Fonterra Future chief executive Ishmeet Singh, Fonterra India and Sri Lanka managing director Sunil Sethi, Future Group chief executive Kishore Biyani and Fonterra strategic portfolio management director Chris Gree.

Fonterra's re-entry into the lucrative Indian market comes after years of homework, claims Fonterra India/Sri Lanka managing director Sunil Sethi.

He says India’s dairy market has evolved over the last 12 years and the co-op is well placed to use its dairy expertise to meet the needs of Indian consumers.

Last week Fonterra launched its Dreamery brand of dahi (curd), UHT toned milk and chocolate and strawberry milkshakes in Mumbai.

This is the co-op’s second foray into India since its inception. In 2001, Fonterra formed a joint venture with Bangalore-based Britannia Industries, but pulled out in 2009, saying at the time that it no longer fitted its strategic priorities.

Sethi says India now has a very different dairy industry. Consumer tastes have changed and they are now open to innovation. Logistics and cold chain systems there have vastly improved.

Fonterra hopes to have a full range of Dreamery dairy products on sale there within two years, using milk sourced in India. And Sethi says Fonterra will also tap into India’s growing food service business by supplying products made in New Zealand.

Consumer demand for dairy in India over the next seven years is expected to increase by 82 billion litres -- seven times the growth forecast for China.

“India consumes 170 billion litres of milk every year... the opportunity is huge,” Sethi told Rural News.

The joint venture partner, Future Group, is present in 26 of 31 Indian states with at least 2000 modern trade outlets and 5000 public distribution outlets and a nationwide cold chain and ambient distribution network.

Sethi will chair the joint venture board with three representatives each from Fonterra and Future Group.

Chairman John Monaghan and chief executive Miles Hurrell visited India a month ago for an update on the joint venture. 

A good time

Former Fonterra director Earl Rattray believes the timing is right for the co-op to re-enter India.

Rattray, who has dairy farming interests in India, says the country is going through a massive transition.

“This is visible in rising consumer aspirations and expectations around what they buy and where they buy it,” he told Rural News.

Rattray is impressed with Fonterra’s tie-up with the Future Group.

“They are one of these ‘new age’ companies which will transform India, quite a positive disrupter in the market, and run more like what we are used to in terms of corporate governance. It’s a bit like a Walmart of India, except they are Indian, and you need to be to understand the Indian consumer.”

Rattray says the Indian market has come a long way since Fonterra’s first foray with Britannia.

“The focus of that joint venture was initially on fresh white milk across the country, almost the only category at that time. It was competing with established companies which do things differently from what we are used to, and it was competing with the massive informal trade.”

More like this

Driving change within Fonterra fleet

Today is International Women’s Day, and this year Fonterra wants to shine a light on the women who defy stereotypes and prosper in traditionally male-dominated fields. Erin Wootten, a tanker operator out of the Fonterra Reparoa Site, is doing just that.

Co-op decarbonisation leader's Antarctic trip

At the beginning of November 2023, Linda Mulvihill, Fonterra’s general manager energy & climate, flew to Ushuaia, Argentina, where she boarded a ship and began a 19-day voyage to Antarctica.

Featured

Govt urged to reduce ETS units

The Climate Change Commission wants the new Government to reduce NZ Emissions Trading Scheme (ETS) auction volumes as son as possible.

Dairy sheep, goat woes mount

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Alliance's Pure South cuts win gold

Meat co-operative Alliance Group has bagged four gold medals at the Outstanding NZ Food Producer Awards, achieving top honours for every cut entered.

Dairy demand on the rise

There is increasing evidence that dairy demand is on the upswing, according to Rabobank senior agricultural analyst Emma Higgins.

Fert use tumbles as prices spike

Fertiliser use in New Zealand over the 18 months is about 25% down from what it consistently was for the previous decade or more, says Ravensdown chief operating officer Mike Whitty.

National

Machinery & Products

JD unveils its latest beast

John Deere has unveiled its most powerful tractor ever, with the launch of the all new 9RX Series Tractor line-up…

Biggest Quadtrac coming to NZ!

In the biggest announcement that Case IH Australia/New Zealand has made around its tractor range, its biggest tractor is about…

A different shade of blue for Norwood

Norwood and ARGO Tractors, the Italian manufacturer of Landini and McCormick tractors, have announced an agreement that gives Norwood exclusive…

Kubota tests diesel engines

Kubota last month used the UK LAMMA Show to test the water with its new 200hp, four-cylinder 09-series diesel engines.

Claas rings up some big numbers

The Claas Group finished fiscal year 2023 with a substantial leap in sales that reflected the high demand for agricultural…

» Latest Print Issues Online

The Hound

Too late?

OPINION: Your canine crusader reckons moves by the new government to try and breathe new life into the country's ailing…

Going rogue!

OPINION: This old mutt suggests the new government is going to have to move fast to rein in a number…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter