Q] Mother Dairy recently celebrated its 50th anniversary. How difficult is it for a brand that old to stay relevant?
To remain relevant, brands must periodically refresh themselves, both in their communication as well as from the point of view of product and quality. You also need to be able to reach the consumer on the platforms that they are comfortable transacting in, for example – q-commerce and e-commerce platforms, which have grown over the last 7-10 years. You don’t want the young generation to reject you simply because you are not available on a certain channel.
Q] You commemorated 50 years of Mother Dairy by launching 30 products. This year, how many product launches do you have in mind?
We will continue to launch a minimum of 30 products each year; not all of the variants will necessarily succeed. For example, we compulsorily launch new variants of ice cream every year. This year we decided to launch Pudina flavoured Chaach as well as Jeera Raita and the high-protein ProMilk in Delhi-NCR, among other things.
Q] Which are the previous launches that have been a raging success?
From last year’s launches, Tilla Kulfi was a big success, so we have decided to double our capacity this year. Our Rabri range is also performing extremely well. Our strength lies in identifying the customer’s taste, and our R&D team does it really well. For example, our marketing and R&D teams searched for local Kulfi carts that sell extremely well. We identified the taste and executed at least 5-10 iterations before finalising our product. This is what we call localisation; otherwise, it is much like a synthetic taste.
Besides that, our curd is doing well; we are market leaders in Delhi. In cow milk too, we are leading, with more than 90% market share in Delhi and growing by more than 10% every year at a CAGR of 15%. We have created almost a Rs 3000-crore category in the last seven to eight years for this particular portfolio. Along with that, cup curd is doing extremely well in Mumbai and Calcutta. Mishti Doi happens to be one of our best products; in fact, nobody has been able to replicate that taste so far.
Q] Mother Dairy products have always been affordable, but with the new wave of premiumisation in the country, will the focus shift from your core ‘nominal pricing’ strategy?
When I say nominal, we are basically saying it is the right price and not under-priced. We are a subsidiary of the National Dairy Development Board, which doesn’t have profiteering as a motive. Our vision is to give the right price to the producer, which is the farmer. If we can make decent money by pricing a product at Rs 35, we will not price it at Rs 50, because the idea is to increase consumption. Today just 35% of the milk market is organised and only five to seven percent of categories like Paneer are organised, there is so much yet to be explored.
Q] And how much are you going to be spending on your summer marketing campaign this year?
While we are using the same brand campaign from last year – ‘Maa Jaisi..’, there will be at least a 20% increase in our investments in the first quarter for Mother Dairy. For example, in Mumbai and UP, you will see a lot of action this year; our media inputs will increase in some of the growing markets where we want to do a better job. Then, resources would also be ploughed to support channels like Quick Commerce.
Q] There are cola price wars, in which juice brands and dairy brands like yours have entered. Campa Cola has slashed prices, selling a 200-ml bottle for Rs 10. Will Mother Dairy prices also see a revision?
We are not in that price war at all. We are offering our beverages for Rs 10 anyways and know how to make that work for us, plus we are a healthy drink. Other categories are following us and not the other way around. So, we don’t need to compete with colas of the world or be part of the price war, so let them fight among themselves. We will be seen differently by the consumers.
Q] How much has Mother Dairy grown by in the past few years and what are your key markets?
In the last four years, we have grown by almost 70% in terms of revenue and intend to double our turnover in the next 1-1.5 years. Similar progress is being made with Dhara, where we are growing steadily at double the market rate. We are looking at indigenous oils like mustard and groundnut oil as a growth category and expanding into newer geographies. This fiscal year, we are achieving a revenue of over Rs. 17,000 crore. For next year, we are targeting Rs. 20,000 crores, anything less than that won’t do.
In the last 3 to 4 years, we have increased our salience of non-NCR markets to NCR market by almost 10%. So, we are making conscious efforts in the dairy business to increase salience in non-NCR markets. We are present in Mumbai, Calcutta, Rajasthan, Hyderabad and will be expanding beyond Delhi NCR to multiple markets. We entered Bihar three to four years ago and are doing extremely well there, as well as in UP. Our core focus markets are UP and Maharashtra, and we would like to expand capacities in Bihar in the future.
Q] Recently, a dairy player, Nandini, which is dominant in the South has entered the NCR market - where Mother Dairy dominates and they have entered at a lower price point. How is that affecting Mother Dairy?
As of now, we are happy about competition entering the Delhi market. Yes, we get jittery at times too, but Nandini comes from a similar dairy co-operative background. As of now, it has not affected our volumes for sure, let’s see how it goes in the future.
Q] Last year, you also expanded to breads, targeting a larger breakfast market; Will you enter the booming oats category, etc. too?
Not right now. There are multiple ways to look at the portfolio. One is the purchase location and category adjacency, which doesn’t have much of a fit at the moment. But our research team is constantly mapping the overall portfolio to see if it falls within it.
Q] Is your vegetable and fruit business faring as well as your Dairy business?
In the past year and a half, we have restructured the entire Safal business, and this year, it is estimated to have grown by around 25%, and this is led by volumes, not MRP. Our fresh fruits and vegetables business is growing by around 7-8% annually, but the real opportunity is being observed in the frozen part. In addition to expanding our distribution and our reach, we are also planning a brand refresh for Safal and Dhara very soon, just as we did for Mother Dairy’s Dairy business last year. It will include some kind of packaging intervention. We have conducted a brand study with the consumers and with channel partners, we are now in the design phase of that particular brand refresh. Last year, we increased our advertising and promotion spends by almost 30-40%, this year it will see an additional 15-20% extra. So, in two years, we have almost doubled our ANP spends in the market. Communicating effectively with the consumer helps us to stay relevant.
Q] What are your expectations from your D2C business and will that be pan-India?
Yes, we are getting into D2C. So, for example, in Delhi we are one of the largest retailers with almost 2000 touch points with the consumer, from our booths and kiosks for both Safal and Mother Dairy. So, our app is ready, we have already tested that in the last one year and we are going to expand the business with D2C this year. We don’t want to claim 10-minute or 15-minute delivery, we are not ready for that as an organisation but we want to give the right service to the consumer for both Safal and for Dairy business. At the moment it will be Delhi centric only.
