Fonterra re-enters India through a joint venture with Future Group

INDIA – New Zealand dairy giant Fonterra has partnered with fast moving consumer goods arm of Future Group, Future Consumer Ltd to form a joint venture that will see the dairy co-operative launch dairy products in India.

Fonterra Future Dairy Partners, a 50:50 joint venture will enable Fonterra tap a significant portion of the dairy market expected to grow in the near future, with plans to produce a range of consumer and food service dairy products domestically.

Plans are underway to launch the first consumer products by the middle of 2019, using both locally sourced milk and dairy products from New Zealand.

According to the company, initial stages of the partnership will focus on product development, and marketing with the right capital investment made during this period.

This time will also be used to settle in the partnership infrastructure, learn the market and prioritise geographies.

Lukas Paravicini, Fonterra’s Chief Operating Officer Global Consumer and Foodservice said the partnership was timely given an evolving Indian dairy industry marked by limited product and brand differentiation, value addition and innovation.

“As a company that stands for FMCG 2.0, Future Consumer is committed to provide not only the best, but the latest in food and other daily consumed products.

We are delighted to partner with Fonterra, who globally leads the dairy industry in quality and innovation.

Through this partnership, we will be able to reach our customers daily with quality dairy products,” said Ashni Biyani, Managing Director of Future Consumer Limited.

Establishing an Indian presence

This is not the first time in India for the New Zealand dairy major.

Fonterra had entered India in 2002 through a venture with Britannia Industries, but it exited the market in 2009.

Fonterra’s future stronghold in India will be helped by Future Consumer’s deep understanding of the Indian consumer, the experience of working with international partners, and a nationwide supply chain and retail network while it benefits from Fonterra’s retail experience.

“It will allow us to prepare the groundwork and make the most of our expertise as we enter the world’s largest and fastest growing dairy industry.

Consumer demand for dairy in India over the next seven years is set to increase by 82 billion litres – seven times the forecasted growth for China,” said Paravicini.

Rising consumption of milk and dairy products in India is driven by strong demand especially from the young population, digital life, active lifestyle and higher disposable income.

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