PepsiCo India Holdings Pvt. Ltd, the maker of Quaker Oats, Lays chips and carbonated beverages like Pepsi, is venturing into the Indian dairy market—one of the toughest for a foreign multinational to break into.
In a start, the US-based company is extending its Quaker Oats brand to ready-to-drink milk. “It’s a value-added, grain-based, fibre-fortified dairy beverage that is targeted to cater to the nutrition needs of breakfast,” said Deepika Warrier, vice-president (nutrition), PepsiCo India.
PepsiCo has been selling dairy products in some markets elsewhere in the world, but it has so far stayed away from the business in India. The local arm of PepsiCo will initially sell two flavours of Quaker Oats+Milk, in 180ml on-the-go cartons priced at Rs30, and will market them in India’s top cities and towns.
“We have a pipeline of different flavours and a few more value-added dairy products that would be launched through the year,” Warrier said.
The company is also working on “fusions” (a mixed beverage with milk, fibre, fruits, and more), Indian dairy-based products like chhaas and lassi, and beverages catering to regional tastes.
Besides Quaker Oats, PepsiCo is considering launching dairy-based beverages under other brands, including Tropicana.
PepsiCo is entering the dairy market at a time when domestic companies with big retail networks like ITC Ltd and Tata Global Beverages Ltd are also readying to tap the value-added dairy segment. Biscuit maker Britannia Industries Ltd has ramped up its dairy investments in the past couple of years.
In the past, foreign multinationals have found the Indian dairy market, dominated by cooperatives like the Gujarat Cooperative Milk Marketing Federation Ltd that owns the Amul brand, hard to crack.
Europe’s largest yoghurt maker Danone SA, which has made several attempts to penetrate India’s dairy segment, is yet to make a mark in the estimated Rs80,000-90,000 crore organized dairy market in the country.
Swiss packaged food company Nestle SA too took its time to establish itself after starting to sell milk in India in 1961. In more recent years, it ventured into other dairy products such as ready-to-drink flavoured milk, which it withdrew later, chilled coffee and yogurt.
In 2016, dairy as a segment accounted for more than 50% of Nestle India Ltd’s revenue.
“The advantage PepsiCo has is its strong distribution and retail presence across formats (about 2.5 million outlets),” said Abneesh Roy, an analyst with Edelweiss Securities Ltd, noting that PepsiCo also has found brand acceptance in the market.”
Source: Mint