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What is the latest fad among FMCG companies?

May 11, 2017 17:01 IST

After Patanjali, ITC and Coke, PepsiCo eyes value-added dairy products

A growing list of companies is eyeing the rapidly growing value-added dairy industry.

The segment is dominated by Amul, Mother Dairy and Nestle, but Patanjali, Coca-Cola and ITC have forayed into this space in the past year. With the likely entry of PepsiCo, the market is turning out to be a crowd-puller.

ITC forayed into value-added dairy last year with Aashirvaad ghee.

“The intention is to craft differentiated and value-added products. We are working on capacity improvement in milk processing,” said Hemant Malik, divisional chief executive, foods division, ITC.

Patanjali, which has bombarded the market with hundreds of products over the past two years, also launched a ghee and whitening powder last year. According to the firm, ghee is one of Patanjali’s top selling products with sales of over  Rs  1,000 crore (Rs 10 billion).

Coca-Cola has launched Vio, a milk-based drink and PepsiCo is evaluating a foray into value-added dairy.

According to industry estimates, the value-added dairy segment grew over 25 per cent last year, against five per cent growth in fast-moving consumer goods sales.

With competition intensifying, traditional players have pulled up their socks. Nestle recently relaunched milk powder Milo in a ready to drink format.

It also launched a number of ready to drink cold beverages under Nescafe and Grekyo yogurts.

“Mother Dairy was a pioneer in assessing the need for value-added dairy products. Our products are developed through consumer insights that make them the preferred choice,” said Randhir Kumar, deputy general manager, marketing (dairy products), Mother Dairy Fruit & Vegetable.

Arnab Dutta in Mumbai