India’s leading dairy brand, Amul, is now going to compete with Nestle, Britannia, Coca-Cola, and ITC, as it is scaling up its portfolio of non-dairy products to become a total foods and beverages company.
Its new managing director, Jayen Mehta, said that “Dairy remains our core, but we have a robust pipeline of growth; we want to straddle all food category consumers use in the kitchen, and we are going about it with speed, scale, and larger investments.
The maker of Amul cheese, milk, ice cream, and butter has identified categories such as non-dairy beverages, snacks, pulses, cookies, edible oil, organic foods, and frozen foods to accelerate with “speed and scale”, which Mehta said will be tailwinds of growth for the company.
Amul is also setting up ‘Ice Lounge’ parlours for premium ice cream. “We are not worried about competition since more players help build products and categories. Having said that, we have to compete… we are competing with Coca-Cola with products like seltzers, with Britannia in cheese and cookies, with ITC in staples, and so on,” said Mehta, who has been associated with GCMMF for over three decades.
In November last year, Britannia announced a joint venture agreement with French cheese maker Bel SA to manufacture and sell cheese products, while Nestle and ITC have announced plans to push growth in manufacturing and innovation, with forecasts of a healthy revival in the FMCG sector.
Mehta said that it was imperative to increase consumer prices on dairy, as the cost of feed and fodder is a direct cost to the farmer. Besides, unseasonal rains and crop failure are factors that are not even reflected in topline inflation numbers.
The cost index of cattle feed has been continuously increasing, which he said has to be calibrated into pricing decisions. But indications are that inflation could stabilize with a normal monsoon. He added. “If the cost of production stays under control, we obviously won’t accept more price increases and create unhappy consumers.