Cheese (processed, branded): India
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Over the last one year, leading dairy brand Amul has further strengthened its market leadership by eating into the shares of rival brands, Britannia and Go, in general and modern trade. While Amul’s all-India volume share in cheese rose to 71% during the period from March 2017 to February 2018 from 64% in the previous year, Britannia’s volume share declined to 17% from 20% and Go’s share shrunk to 6% from 10%, respectively, industry sources said quoting Nielsen data.
Usually, according to industry experts, it’s difficult for a leader with a large majority share to further shore up its position. However, what helped Amul grab share from its competitors is a major expansion that trebled its production capacity to 3,000 tonnes a month.
When contacted, R S Sodhi, MD of Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets its dairy products under Amul, said after the expansion, the company became aggressive on the distribution and pricing front, especially to the HoReCa (hotels, restaurants, catering) segment.
Another factor that assisted Amul, which has a strong network of 5,000 distributors, is that it did not increase prices in the last two years. The strategy paid off in boosting volumes. GCMMF plans to further expand its capacity to around 5,000 tonnes a month in the next two years.
Britannia Industries said it does not subscribe to Nielsen’s market share data for the dairy category. “As far as the cheese category for Britannia goes, we have seen healthy double-digit growth in 2017-18 with modern trade contributing marginally higher than general trade to this growth. While cheese slices (which were pioneered in India by Britannia) continue to be the largest segment for the brand, the growth has been funnelled by cheese blocks, cubes and spreads,” said Venkat Shankar, VP and head of dairy business, Britannia Industries.
Devendra Shah, chairman of Parag Milk Foods, the maker of Go cheese, also said the company’s cheese business has been growing well. “As per our internal data, our cheese business has grown more than 20% CAGR in the last one year. Along with consumer business, we are also focusing on institutional sales and direct supply to QSRs. Almost half of the consumption of cheese comes from institutions. Going by the growing demand, we are increasing our capacity from 40 metric tonnes per day to 60 metric tonnes per day,” said Shah.
The roughly Rs 2,000-crore cheese market in India is growing at 10-12% annually. Although cheese has always been an acquired taste in India, its consumption has been growing significantly driven by pizza chains and consumers adapting to new forms of cuisines.
During the year, general trade in cheese is said to have grown ahead of modern trade. While general trade grew 20%, modern trade’s growth was around 8%. In general trade, while Britannia grew by 1%, Amul is said to have clocked a growth rate of around 30% and has a market share of 86%. Go, on the other hand, declined significantly by 65%.
2018; Kraft cheese, Danone lose interest in India
America’s No.1 cheese brand Kraft has disappeared from Indian retail shelves.
Old stocks have not been replenished for a few months even while Kraft Heinz India continues to invest in Complan, its milk drinks brand, for which it has roped in Sourav Ganguly as brand ambassador.
Multiple sources in the industry and trade said the company is withdrawing from the cheese market here. The development comes a few months after French foods giant Danone announced its exit from dairy in India. In response to TOI’s query on Kraft Heinz’s withdrawal from the Indian cheese market, a spokesperson responded, “Kraft Heinz has no comments.”
The Kraft Heinz Company is the fifth-largest food and beverage player in the world with several billiondollar brands, which include Planters, Jell-O, Capri Sun, Classico, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer and Philadelphia. The $26-billion company was formed by the merger of Kraft Foods Group and Heinz in 2015.
Although the company has not officially communicated its plans on cheese to distributors, trade sources said, as of now, Kraft Heinz is not taking further orders for production of cheese in India.
Kraft cheese, which was launched with the ‘Say Cheese’ campaign, has not performed according to the company’s expectations. The brand was priced at a near 40% premium to existing brands like Amul and Britannia, which, industry observers said, could have been counter-productive.
On the other hand, Gujarat Cooperative Milk Marketing Federation (the maker of Amul) and Parag Milk Foods (owner of Go Cheese) are expanding their production capacities to cater to the growing demand.
Branded cheese is a roughly Rs 2,000-crore market in India, growing at 10-12% annually. Amul is the leading brand with a volume share of around 71%, followed by Britannia (about 17%) and Parag Milk Foods (around 6%).