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Breaking away from the practice of going for capital-intensive expansion projects, Godrej Jersey, formerly known as Creamline Dairy Products, has decided to expand its operations to newer markets by taking its retail products.

The Hyderabad-based business of the diversified Godrej Agrovet is also in the process of expanding the bouquet of its retail products. “We have started introducing products of smaller denominations to expand the retail market. The ₹10 milk packet is a case in point. We have also launched ₹10 milky shots and badam milk in different flavours,” Bhupendra Suri, Chief Executive Officer of Godrej Jersey, told businessline.

“With a view to expanding its portfolio of products in the value-added category, the company has invested. We have invested in a new line with an investment of over ₹20 crore.”

“We are building a big retail brand, launching products in different sizes so that more people can afford them. If you want to build a retail brand, you have to offer various sizes. You need to focus on expanding the product category. While doing this, one needs to focus on the quality and packaging,” he said.

“The beverage companies spent a lot on the products and expanded their market. But the dairy industry didn’t have such kind of budgets and we could not promote the products much earlier. But we are doing that now,” he said.

The company, which is now utilising 50 per cent of its 12-lakh litres a day capacity, is focused on increasing utilisation by growing the business of the core milk segment (shorter shelf-life products) in the existing geographies.

“For newer markets, we will go with the value-added products that have a long shelf life. We have recently entered Rajasthan, Western Uttar Pradesh, and Uttarakhand. We have seen a huge demand in the North for the ghee made in the South. We are catering to that market with ghee made in Chennai,” he said.

The Hyderabad-based business of the well diversified Godrej group is also working on a dedicated ghee brand.

Stating that the ratio of milk and value-added products in India is way different from the global numbers. “While value products dominate the dairy business with a share of 67 per cent, leaving the remaining 33 per cent for the core milk component. In India, it’s exactly the opposite. While the milk business contributes 68 per cent, the share of value-added products stands at 32 per cent,” he said.

The company, which registered a turnover of ₹1,500 crore last year and ₹800 crore in the first half of this financial year, accrued 32 per cent and 39 per cent, respectively, from the value-added products.

“The overall milk business in the country is growing at 4-5 per cent, while the value-added component is growing at 20 per cent. If we could increase the contribution from the latter category to 50 per cent in the ₹13-lakh crore dairy sector, we can increase the weighted average of the whole sector in double digits,” he said.

Quoting the National Dairy Development Board Chairman Meenesh Shah, Suri said the country’s dairy market was poised to more than double to ₹30-lakh crore by 2027 from the present level of ₹13-lakh crore.

Source : Hindu Businessline Dec 29th 2023

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