From farm to store

The Supply Chain Management of milk retailing demands a widely spread distribution network with an emphasis on the technology for keeping the product fresh. An overview…

According to a report by US Department of Agriculture, India’s milk output is expected to touch 121.5 million tonne in 2011. While the demand for milk has been growing by about six billion tonne a year, the annual incremental production over the past 10 years has been 3.5 million tonne.

MILK PROCUREMENT AND STORAGE

Dairy industry sources its requirement of liquid milk mainly from local farmers, dairy co-operatives and producer institutions. It is necessary to procure milk twice a day to ensure quality milk procurement. The value chain connects the rural milk producers to the end consumers through transportation at different stages of intermediary processing, viz, chilling units,

processing units, storage units and retail stores. In order to maintain freshness, this milk is chilled and then transported to the warehouse in insulated milk tankers by road and by rail.

Generally the dairy products are only stored for a short time to comply with quarantine and maximum cold storage period requirements until quality assurance releases the goods for sale.

“The warehouse requirement as well as transportation requirement demands strict temperature maintenance because of theperishable nature of the product. From a producer end to the processing unit, the usual lag time is around 4 to 8 hours depending upon the distance. It does not take more than 4 to 5 hours from the processing unit to reach the retail points for elhi-NCR and 6 to 7 hours for Uttaranchal /Haryana”, says, RS Dixit - CMD - RSD Group - Gopaljee Dairy Foods Pvt. Ltd. Fresh milk management is a key issue in dairy industry. The dairy products mainly consist of fresh products which are highly perishable such as fresh milk, and it needs to reach the retail point early in the morning. Apart from procurement cost, the cost of transport is also a major concern for dairy industry.

In recent time, we have seen consistent increase in fresh liquid milk price. Joining the league are the brands like Mother Dairy and Amul which increase prices frequently. The reason is increase in milk procurement price due to rise in input costs like cattle feed, fodder and cost of transportation.

Dairy product is a difficult business because of short shelf life and complex logistics. And that’s a major reason why the sector is largely dominated by home-grown firms like Amul and other Dairy.

QUALITY ASSURANCE

At laboratory, the milk is tested for adulterations and quality at the time of collection from the farmers. The milk in the tankers is first checked for quality and freshness and then unloaded nto huge insulated stainless steel storage tanks. The milk quality is checked repeatedly after each processing phase and the temperature is judiciously maintained less than 5° celsius always.

Before the milk leaves the plant for the delivery or distribution outlets, the milk is tested again. Being a perishable product, milk needs refrigeration at each point of handling and storage. The warehousing ought to be refrigerated one where the temperature needs to be maintained below 4° celsius. The long distance transportation is managed through refrigerated containers and the short distances through insulated containers, which maintain the temperature of the product.

To ensure milk freshness, the collection and distribution points are always chosen such that the travel time between them is always less than 36 hours. A final quality check of the milk is so made at the To ensure milk freshness, the collection and distribution points are always chosen such that the travel time between them is always less than 36 hours. A final quality check of the milk is also made at the retail shop itself. This ensures that milk reaching the ustomers is of the same quality as dispatched from the dairy producer.

THE DISTRIBUTION NETWORK

The Gujarat Co-operative Milk Marketing Federation (GCMMF) that markets the brand Amul has its products available in over 500,000 retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventoryof the entire range of products. All GCMMF branches engage in route scheduling and have dedicated vehicle operations.

Mother Dairy, a wholly owned subsidiary of National Dairy Development Board (NDDB) of India, has over 820 milk distribution outlets in the National Region. It has recently rolled out SAP implementation to link its 11 plants, 45 distributors, 16 packaging locations to track and monitor movement of its products. Mother Dairy with 79

tankers in the morning and 75 tankers in the evening bring in milk from the regional collection centres. After collection the same tankers are utilised for the delivery of the processed milk to the vendors and outlets.

Talking about Gopaljee’s distribution network, Dixit says, “We are at present operating at around 6000 villages across western UP,Haryana and Uttaranchal through establishment of about 40 milk chilling centres along with 30 odd bulk milk coolers.”

THIRD PARTY LOGISTICS SERVICES

Generally dairy manufacturers depend on 3PL parties for their logistic needs. These needs include logistic of milk collection, distribution of dairy products, sale of the products through dealers and retail stores, some veterinary services, etc. Even though these functions are performed by 3PL parties, the dairy manufacturers need to retain control and assure quality and

timely deliveries, especially for perishable items such asfresh milk.

When asked about the complication related to dairy logistic, Dixit replies, “We do not regard the logistics of milk and fresh milk products as complicated. Rather we see them as challenges and opportunities to improve our efficiency and commitment in providing consumer services.” He further says that the company suffers negligible loss in revenue due to logistic issues.

JUST-IN-TIME DELIVERY TO IMPROVE ROI

The spoiled or soured milk is returned to the retailer by customers; who further return it to the dairy manufacturer. The milk spoilage is generally caused by the plant failure such as refrigeration machinery, switchboards or reticulation. The milk can alsoget spoiled during transportation and packaging.

In the case of milk retailers, they are increasingly interested in just-in-time deliveries, so that they can reduce their own storage costs. Just-in-timeinventory strategy also improves dealers’ return on investment (ROI). “The strong technical competency and standardised production process ensures that there is minimum handling loses. The service backup systems available restrict milk to go sour”, says Dixit.

BETTER TECHNOLOGY TO SPRUCE UP QUALITY

The technological development in dairy industry will facilitate long distance movement of fresh products and make it possible for the consumers to have quality options. With the road infrastructure development taking place and the available technologies, it would not be difficult to operate pan India distribution.

“The emerging technologies like GIS will certainly going to improve the efficiency of operation while the product is on the move. The introduction of new technology towards cost effective refrigeration system and better road connectivity in the rural areas will be the boon towards addressing the issues of logistics in Indian Dairy Industry, thereby ensuring value for money for the consumer”, concluded Dixit.

Here comes the sun

Consumers must have clarity on the exact functions that sunscreens perform.

The level of awareness among Indian consumers about sun protection may vary across regions, but what seems to remain consistent is the ambiguity regarding SPF (sun protection factor) and its advantages, and a clear distinction between sun protection and ‘fairness’ creams.

With the onset of spring in India, personal care and skincare brands shake off their annual sabbatical and begin returning to mainstream advertising, given that over the last few years, icons extolling SPF have become a fixture on most modern skincare packaging. The SPF innovation is an evolution of the sunscreen, initially developed by cosmetic majors in the West catering to light skinned Caucasian skins, which are more vulnerable to sun damage, especially given their fondness for sunbathing and tanning. In theory, the SPF is a laboratory measure

the effectiveness of a sunscreen – the higher the SPF, the more protection the sunscreen offers against UV-B (the ultraviolet radiation that causes sunburn).

SPF is the amount of UV radiation required to cause sunburn on the skin with the sunscreen on, relative to the amount required without the sunscreen. So, wearing a sunscreen with SPF 50, your skin will not burn until it has been exposed to 50 times the amount of the solar energy that would normally cause it to burn. The amount of solar energy you are exposed to depends not only on the amount of time you spend in the sun, but also on the time of the day. This is because, during early morning and late afternoon, the sun’s radiation must pass through more of the earth’s atmosphere before it gets to you.

Not all sunscreens, though, impact every user in the same way. Benefits can vary widely, depending on:

• The skin type of the user.

• The amount applied and frequency re-application.

• Activities in which one engages (for instance, swimming leads to a loss of sunscreen from the skin).

• Amount of sunscreen the skin has absorbed.

Since light skin continues to be the skin tone of aspiration in many parts of India, many consumers tend to buy ‘whitening’ moisturisers with inbuilt SPF. However, just as in the trend of fairness creams, does purchasing a product with an SPF indication also reflect yet another fad? Are consumers really abreast with the enhanced skin protection features that many SPFladen

skincare products provide or purport to provide?

“The level of awareness among Indian consumers about the right amount of SPF is very low; most people don’t even know what SPF how long it lasts on the shares Vandana Sundra,

marketing head, Eminence Organics. Most consumers in India common misbelief that sunscreens are needed only in the summer or when one is being exposed to peak sunlight hours. But reality, one needs sunscreen through the year, as the sun emits ultraviolet (UV) rays even in winters.

Blurred Comprehension

Sundra at Eminence Organics defines SPF as “the capability of protection of the skin from harmful effects of ultraviolet rays”. “SPF is rated on a scale of increasing protectiveness – from 2 to 15 times. When applied on the skin, the chemical molecules form an invisible, protective layer that protects it from penetrating UV rays and Broad-Spectrum protects from both UV-B and UV-A rays.” According to experts, below is the formula to calculate SPF:

SPF = Duration till sunburn with sun protection product/ Duration till sunburn without sun protection product

Experts from the beauty industry normally recommend SPF in the range of 15 to 40 for Indian skin tones.

Elaborating on the measure of SPF for different skin tones in India, Sundra says, “SPF 30-32 is best for all skin tones in India. If your skin is very light, it would burn more quickly. Such skin tones rarely get a tan, they instead get burnt. It is best that people with very light skin get a product that is SPF 20- 30. The light skin type burns under the moderate range. One can experience gradual tanning in which one ends up with a light brownish shade. SPF 8-12 would be best for such skin types. Burning is something that dark skins need not worry about. For people darker skins, it is recommended that they use sunscreen products with lower SPF.”

Explaining the term broadly, Charvi Gupta, VP, Technical Services and Products, Lotus Herbals, notes, “The sun protection factor means the amount of protection that a sunscreen provides. SPF numbers tell a person how much longer he/she can stay in the sun without burning while wearing sunscreen as opposed to not wearing any sun protection. For instance, if our skin usually burns in 10 minutes without any type of sun protection, then an SPF of 15 means you can stay in the sun 15 times longer (approximately twoand- a-half hours) until the skin begins to burn. In order to get the full protection time from the sunscreen, one must reapply it throughout the day as it can wear because of perspiration and rubbing.”

Shining the light

With the growing communication media its effective use in educating consumers in recent years, a lot of awareness been generated among consumers. “Consumers are now more aware of harmful effects of UV Gupta agrees. “Higher awareness has translated to offtakes for sun protection products, but growth is in initial phases. At the retail end, we generate awareness in the form of our ‘safe sun’ leaflets, which help to propagate information on the need for sun protection. We also share this knowledge through magazine advertorials and direct interaction with consumers through our beauty advisors placed at various stores.”

While action in the branded skincare category has warmed up over the last three years across all sub-ranges, there is specifically great movement in SPF-enriched products and variants. The players offering sunscreen products India include Dabur India, India, Lotus Herbals, Zydus Wellness, Nivea, Hindustan Unilever Proctor & Gamble’s Olay and Jolen.

The recent launches include Dabur India’s Dabur Uveda, an Ayurvedic skincare brand rolled out in 2009. The Dabur Uveda range was launched with products including moisturising face wash, clarifying face wash, complete fairness cream with SPF 20 and two-in-one moisturiser containing SPF 8, priced from Rs 50-118.

In 2007, Proctor & Gamble launched Olay Total Effects with VitaNiacin. The company says it a breakthrough anti-aging moisturiser containing the patented Vitaniacin formulation – an exclusive anti-aging combination of niacinamide (Vitamin B3), Vitamin E and Pro-Vitamin B5 (panthenol), in addition to sunscreen protection, making it ideal for Indian skin types. Olay otal Effects comes in convenient, easy-to-squeeze pump jars in two variants – Normal with UV (SPF 15) and Normal Non-UV, and Gentle with UV (SPF 15) and Gentle Non-UV – carrying either a light, fresh scent, or none at all. Zydus Wellness, a company focussed on health foods and wellness products under its EverYuth brand, this year launched EverYuth Menz, a skincare range for men. Under its men’s range, EverYuth offers EverYuth Sun Block Lotion with SPF 30. Under its Sun Care range, the brand offers sunscreens with SPF 15 And SPF 30.

Sunscreens and moisturisers contaning SPF under the Neutrogena brand include Neutrogena Oil-Free Moisture SPF 15, Neutrogena Age Shield Sunblock SPF 30, Neutrogena Ultra Sheer Dry-Touch Sunblock SPF 50, Neutrogena Ultra Sheer Body Mist SPF 30 and Neutrogena Lip Moisturizer with SPF 15. Lotus Herbals, one ofthe leading companies in the skin and haircare egment, under its ‘sun care’ range, offers three subranges – Absolute, Men and Safe Sun. The Lotus Safe Sun Absolute range offers four products ranging from SPF 20-30. The Safe Sun for Men with SPF 30 is the only product from Lotus for sunstressed males. The Safe Sun range includes 10 sunscreens ranging from SPF 20-50. Lotus recently launched Floral Stay, an all new ong-lasting lip colour, with SPF 10.

Jolen Inc, a US-based company and one of the leading producers of skincare beauty products, launched its products in India in 2004 through a partnership with Kundan Group. Right now Jolen’s only sunscreen product includes Jolen Sun Screen Lotion with SPF 15. Despite various media campaigns to create awareness at a mass market level, a large number of Indian consumers still suffer from the myth that SPF-enriched/sunscreen products are meant only for summer use. Also, as summer approaches, most brands tweak their advertising campaigns and packaging strategies to focus on SPF as the central plank.

“In our country we have more months of summer than of winter; some manufacturers and marketers do sync their strategies with this seasonality. But yes, there is still a myth of SPF being a summer-only feature. Gradually, however, the concept is changing as knowledge spreads,” Gupta says. “About 60 ercent of our revenue of Safe Sun products comes from summer sales,” she adds. Upon being asked about the percentage contribution of sunscreen product ranges to total sales, Gupta forms it’s less than 25 percent.

Most analysts believe the Indian marketplace is characterised by a unique ambiguity – that of the blurred line between fairness creams and SPF-enriched products. Sharing her views on the same, Gupta says, “SPF products and fairness products are very clearly two different concepts. While both these concepts have generated their own demand in recent times, sharing knowledge and creating awareness can help marketing SPF products in a more effective manner.”

In recent years, many brands have implemented changes in packaging and marketing strategies of sunscreens. According to Gupta, packaging innovation will be a key driver in the kincare aisle’s expansion, particularly with respect to ‘refreshing’ the offer and helping upgrade brand image and acceptance.

Growing market of fashion accessories

As there are only a few players in fashion accessories market, the segment offers huge potential for deeper penetration into the Indian markets.

The fashion accessories market in India is largely dominated by unbranded players, therefore we see a huge market potential for branded players in this segment. Tarun Joshi, director, Crew BOS Products Limited, which has recently entered into fashion accessories retailing through its Crew Republica Retail stores, shares, “Fashion accessories is a very high growth area as there are hardly any branded players present in this segment. And as the fashion awareness in India grows astronomically, the growth in accessories is a natural progression.”

As per Joshi, a few years old report estimates the fashion accessories market at around Rs 10,000 crores. The growth rate is estimated at around 20-30 percent per annum. “However, the actual market size would be much larger. In fact recent studies have projected that fashion accessories is destined to be a very high growth area in India,” added Joshi.

Dilip Kapur, director, Hidesign India, the manufacturer and retailer of fashion accessories, largely leather handbags and wallets, said, "The handbag market stands at an approx 1000 crore and is growing at about 20 percent. We have seen a growth of about 23-28 percent in the last two years.”

Trends in fashion accessories

Fashion has been a significant segment in the evolution of Indian retail industry, not due to its size but the way it has influenced the Indian lifestyle. And with the rising disposable income and consumer’s 'Look Good, Feel Good' attitude, fashion accessories are gaining popularity among consumers. Kapur says, “Customers are evaluating their spending, more money get allocated to accessories as they are used more often and complete the look.”

Currently, fusion in its many variations is the biggest trend around and it will get bigger in future. As more people start to appreciate the value fashion brings to them, they are bound to mix and match the new with the comfortable. Also, television and social media make the latest in fashion available in an instant. “Crew Republica mainly targets youth population. There is a tremendous scope for a cult brand of accessories for the Indian youth (70 percent of our population is under 35 years) at an affordable price -- a gap that crew Republica is addressing,” said Joshi.

Apart from BTL and ATL marketing, brands are now moving towards social media marketing. Elaborating on the same, Kapur said, ““As the customer gets younger and more media savvy, we have also moved with them. Online and social networking spaces will require an extra push in the coming time.”

However, the breakeven time in fashion accessories business can vary from brand to brand and the product offering. There are no fixed rules as it all depends on target customer, brand positioning, pricing and the planned marketing strategy. “We keep six months to a year for our new shops to break even,” shares Joshi.

Brands venturing into accessories retail

Today we see lots of apparel brands also venturing into fashion accessories market. According to Kapur, “Apparel brands are trying to ensure they retain customers by expanding their product range. Unless the product offering is sufficiently unique, the competition will only get tougher.” Adding to the point, Joshi comments, “Since fashion accessory has a huge market potential with very few brands into it, it is this gap that apparel brands are trying to encase.

However, this scenario will change when more accessory brands enter the Indian market.” As organized retail expands to tier II and III cities, more people will become acclimatized to shopping in newer formats. “Though the challenges for us come from cheaper, poor quality imitations from the unorganized segment,” says Joshi.

Tommy Hilfiger, the leading lifestyle brand, also launched its two exclusive accessories store in Pune and Chandigarh on November 2010. Tommy Hilfiger was launched in India in 2004 by the Murjani Group. When asked, what made the company launch exclusive stores for accessories, Mohan Murjani, chairman, Murjani Group, said, “As our range of accessories continue to widen, we do not have sufficient space to fully display these products at our present Tommy Hilfiger exclusive brand outlets. Secondly, the demand for Tommy Hilfiger accessories is growing rapidly. Further, the company plans to open 500 accessory stores in the next three to five years”.

When asked about the idea behind launching, Crew Republica Retail, Joshi reverted, “The parent company, Crew BOS Products Limited, is India’s foremost exporter of leather goods from India which supplies products to some of the leading accessories brands worldwide, especially in US and Europe. Renowned for its excellence in design, the company decided to forward integrate by launching its own brand of accessories, Crew Republica and retail was the logical channel to drive such a venture.”

Going through the market potential, LuckyClover, a leading USA based fashion jewellery manufacturer and retailer has recently entered India with its Murano glass fashion jewellery and collections. Speaking about its retail venture, Natalie Hesse, founder and CEO, LuckyClover, Inc., said, “Our novel jewellery concepts are easily applicable to the middle and upper middle consumer classes in India, comprising of brand conscious customers with sophisticated tastes and low price sensitivity.”

Apart from Crew Republica, Hidesign and LuckyClover, Tommy Hilfiger some other fashion accessories brands include Esprit, Max, Burberry, Spencer’s Retail Ltd, Reliance Trends, Archies, Pavers England, Spykar Lifestyle Pvt Ltd, Nike, Christian Dior, etc.

Future growth potential

As the tier II and tier III cities are showing high growth potential, more and more brands are moving towards these cities. “We have over 50 exclusive stores across India and about a 100 multi brand outlets which include shop-in-shops. We have been moving towards tier II and III cities in the past few years.

Cities such as Mangalore, Mysore, Jaipur, Guwahati and Aurangabad look promising,” said Kapur. Companies are also keen on expanding through franchise route. Joshi said, “Currently we will be aggressively expanding our exclusive outlets and enter large format stores. In two to three years, we will seek to enter distribution channel, franchisee-based expansion and the international markets.” With the vision to establish a strong foothold across India, LuckyClover also plans to enter and expand their presence aggressively through a master franchise route.

According to industry experts, there is space for a lot more brands to enter in fashion accessories segment as the market is young and growing rapidly. Concluding at the end, Joshi summaries, “We see Indian fashion accessories industry as one of the fastest growing segments in the fashion industry.”

Flavoured Fermentation

The packaged yoghurt category has yet to take advantage of a pre-made market.

The packaged yoghurt category in India is yet to taste the power of pathbreaking innovation, but with consumers willing to give flavoured and probiotic yoghurt varieties a try, there is enough scope for growth in the category. Companies now have to shift focus to flavour invention and category expansion.

As most Indians who have been raised on home-made yoghurt/curd or plain dahi would know, the scientific formation behind the creation is the same, and so are the benefits. Yoghurt is a dairy product produced by bacterial fermentation of milk. The texture of the yoghurt and its tang in taste comes from the lactic acid acting on milk protein, which is produced by this

fermentation. Thanks to its nutrient-rich and digestion-aiding properties, yoghurt is today promoted throughout the world as a healthy, low-fat food supplement, which can be customised in several convenient ways to accommodate any taste bud.

“Yoghurt is a good substitute for those who do not like – or cannot digest – milk and can get the vitamins and calcium, which will be missed by not consuming milk. It is also a healthy alternative for people suffering from lactose intolerance produced by lactate deficiency because yogurt bacteria have necessary enzymes to cleave lactose into lactic acid, so lactose reaches the intestines almost completely digested, which facilitates absorption,” explains Priti R. Mohile, MD, Mediamedic Communications Pvt Ltd.

The New Curd

With the yoghurt concept not being new to Indian consumers, manufacturers had it easy with a ready-made market for packaged yoghurt products in the Indian market. With most leading dairy companies already providing plain yoghurt and even traditional yoghurt drinks such as lassi at the initial stages, some brands ventured a bit further and began providing ready-to-eat raitas. “In India, yoghurt is traditionally prepared at home, hence the consumer psyche does not consider it (packaged yoghurt) prudent or attractive enough to purchase.

It is only when the new generation begins to resort to more and more of ready-to-eat items that this trend will pick up,” shares Mohile. Although the industry has seen and made some effort in educating and promoting yoghurt based on its health benefits alone, most households still make it at home and only purchase packaged, branded yoghurt as a last minute resort. And even as more and more international players venture into this category and expand it with new varieties and flavours, many believe that the pace of innovation is less than optimum.

Mohile believes that brands will have to undertake major efforts toward educating and boosting the awareness levels of younger target groups. “Only then will this category see innovations and growth in the years to come,” she says. “Benefits of yoghurt include reduction of cholesterol, protection against certain cancers, and even boosting the immune system. The research is still not complete on these benefits; however, these factors will likely be important in the continued market growth of packaged yoghurt,” notes Man Mohan Malik, CMD, Himalya international.

Yoghurt Aplenty

Once populated by just a few regional labels, the yoghurt category today has over half-a-dozen national brands that offer a variety of variants. Here’s a look at some of the leading brands in the market: Nestlé India Ltd, a leading nutrition, health and wellness company, has a diverse yoghurt portfolio. It includes Fresh ‘n’ Natural Dahi (plain yoghurt), which is available in 200

gm and 400 gm packs, priced at Rs 15 and 20, respectively; Nestlé Fresh ‘n’ Natural Slim Dahi (low fat) comes in 200 gm and 400 gm packs priced at Rs 15 and 30, respectively.

The company’s Nesvita Dahi, a probiotic yoghurt, comes in 200 gm and 400 gm packs priced at Rs 15 and 28, respectively. Nestlé’s raita variant – Nestlé Jeera Raita – comes in 185 gm pack

(for Rs 15) and 380 gm pack (for Rs 25). And the popular flavoured yoghurt category offered by Nestlé has Nestlé Milkmaid Fruit Yoghurt, which comes in two flavours – mango and strawberry – priced at Rs 19 for a 100 gm pack.

Another leading player in the yoghurt category is Gowardhan Dairy, founded by Parag Milk and Milk Products Pvt Ltd in 1992. The yoghurt varieties offered by Gowardhan Dairy include Gowardhan Fresh ‘n’Thick Dahi, available in 80 gm pack(Rs 7), 200 gm pack (Rs 15) and 400 gm pack (Rs 27). Another variant, Gowardhan Trim Dahi, is available in 200 gm and 400 gm packs for Rs 16 and Rs 28, respectively. Venturing into the flavoured yoghurt category, Gowardhan launched the ‘Go’ brand of yoghurt last year. Available in different flavours – strawberry, mango, banana, lychee, mixed berry and pineapple – the Go brand is packed in a readyto- eat cup, and is priced at Rs 18 for a 125 gm pack.

Himalya International, a leading agri-export-oriented company, also has a yoghurt portfolio, which includes probiotic plain yoghurt (available in 200 gm and 400 gm packs, priced at Rs 15 and 30, respectively) and fruit flavoured yoghurt under the brand name Himalya Fresh Real Fruit Yoghurt. Available in four different flavours – mixed fruit, strawberry-banana, strawberry and pineapple – the flavoured yoghurt is available in a 150-gm pack for Rs 25. Amul, the leading dairy product brand from Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), offers Amul Masti Dahi made from pasteurised toned milk in 200 gm and 400 gm packs. Amul ProLife Dahi is available in 200 gm and 400 gm packs. The company’s Yogi Yoghurt, a fruit flavoured yoghurt, comes in two flavours – mango and strawberry.

Mother Dairy, one of the leading brands in dairy products, offers plain and probiotic yoghurts. Mother Dairy Dahi is a low-fat, rich-incalcium plain yoghurt. It is available in 100 gm, 200 gm and 400 gm packs. In the probiotic range, Mother Dairy o f f e r s b - A c t i v Pr o b i o t i c Dahi, available in Delhi in 90 gm, 200 gm and 400 gm tubs, and b-Activ Plus Fibre Rich Curd, available in Mumbaiin 200 gm and 400 gm packs. The company also offers Mishti Doi, the quintessential Bengal yoghurt, in a 90 gm cup. Britannia Industries Ltd’s offerings include Britannia Daily Fresh Dahi and Britannia Fresh Low Fat Dahi. Both varieties are available in 200 and 400 gm packs.

One of the most recent entrants in the category, Danone, whose products are imported and distributed in India by Narang Group, has also come up with a range of fortified plain and flavoured yoghurt. Its fortified plain yoghurt has a shelf life of 15 days and is available in 150 gm and 400 gm packs, priced at Rs 14 and Rs 27, respectively. The company’s flavoured yoghurt, available in strawberry, mango and vanilla variants, is available in a 100 gm pack for Rs 10. There is, therefore, no dearth of flavours and varieties in yoghurt that companies have in their portfolios.

But how do manufacturers home in on variant innovation? “It is essentially done through market research to understand the taste and preference of he consumer,” says Rahul Akkara, vice-president (marketing), Gowardhan Dairy. While in Mohile’s opinion, “It’s indeed the popularity of these flavours. Rare and exotic is preferred by the ndian palate. Moreover, citrus flavours don’t go well with milk products.” Akkara says that the consumption rate of packaged flavoured yoghurt is growing tremendously in the Indian market.“In terms of value, the flavoured yoghurt category in India is w o r t h Rs 15-20 crore and is growing at almost 20 percent annually.” He also reveals that five percent of Gowardhan’s total dairy product revenues come from the flavoured yoghurt category.

Innovation is Key

Though companies have a lot to offer in terms of flavours and SKUs, to get the category to experience high-level growth, yoghurt manufacturers will have maintain constant innovation. Yoghurt manufacturers must focus on development of new flavours and longer-lasting products. The introduction of new flavours will be driven by consumer desires and new developments by research and development teams,” says Malik. To attract the cost-conscious Indian consumer, manufacturers, especially those of flavoured yoghurts, should invest in improving the shelf life of products.

Constantly educating consumers on the technologies being used, such as Tetra Pak cartons, to sustain vitality and flavours, will be another crucial aspect in the growth of the category. Stating that the development in this category is in progress, Malik says, “Suppliers of bacterial culture (the bacterial growth on or in an artificial medium) are conducting research hints at the development of uniquely flavoured yoghurts. By varying the types of organisms in the cultures, yoghurt is produced much faster and lasts longer.”

The health-conscious Indian consumer is willing to come out of the mindset of consuming homemade dahi and is ready to give the flavoured and probiotic yoghurt varieties a shot. But to make Indian consumers dedicated buyers of packaged yoghurts, companies will have to do a lot more.

Store it well

Store it well

The cold chain facilities are still fragmented and hence 3PL providers will continue to play a major role in India.

The fast growing, but relatively small and niche, gourmet retail market in India faces multiple challenges that impact retailers' overall operation across the country. Absence of an effective supply chain network and heavy costs of hiring specialist logistics and supply chain management (SCM) companies or a third-party logistics (3PL) firms are a few of these challenges.

For a gourmet retailer, including the leading names such as Godrej Nature's Basket, Le Marche, Gourmet Food Bazaar, Ruci & Idoni, Q Mart and Modern Bazaar, maintaining the supply chain integrity and preserving the shelf life of chilled products such as cheese, chocolates, butter, spreads and frozen products such as ice creams is critical and challenging. Setting up a cold storage facility for storage and transportation of these kinds of products, though, is a capital-intensive business, and this is one reason why most gourmet retailers are not interested in investing in them.

The investment made in setting up an in-store cold storage facility depends on the size of the store. The cold storage equipment levels are determined by the size and space allotted for chilled and frozen categories. Some popular in-store cold storage equipment include multi-deck chillers, vertical freezers, serve over chillers, etc.

Informing about the cost of these equipment, Sreejith Mohan, deputy general manager and category head, Godrej Nature's Basket, said, “Typically, the price range for branded open multi-deck chillers (4 ft in length and 15 inch in depth) starts at Rs 1.3 lakh and goes up to Rs 1.5 lakh, whereas a two-door vertical freezer (4ft width and 15 inch depth) can cost up to Rs 1.75 lakh. Serve over chillers (4-6 feet in length, 2 ft in depth) can cost approximately Rs 1.5 lakh.”

“Nature’s Basket stores usually have 3-4 serve over chillers, 2-3 open multi-deck chillers and 3-5 vertical freezers,” he added.

When asked about the key points that gourmet retailers should keep in mind while setting up a cold storage facility, Mohan said, “Retailers need to be clear about who their target audiences are and what are their expectations. Since setting up a cold storage facility is capital intensive, retailers also need to study the cost effectiveness (sales potential versus spends) of the facility. Also, they need to develop in-house expertise to handle and maintain this equipment.”

Mohan also says the temperature (in chillers and freezers) need to be pristinely maintained and monitored and there should be suitable back-up (equipment/space) to take care of equipment breakdown. The fruits and vegetables should not be exposed to too much air conditioning in store; as they tend to dry up the products. The fitment of A/C vents should be designed accordingly and they need to be maintained regularly. Even cleaning of all equipment needs to be done using only prescribed materials and at a predetermined frequency.

Use of refrigerated vehicles and delivery systems by gourmet retailers are still at a nascent stage; so most retailers depend upon SCM or 3PL service providers for their cold storage and transportation needs. Some of the leading supply chain and logistic firms include TCI-SCS, Gati Ltd, Safexpress Pvt Ltd, Snowman Frozen Foods Ltd, Adani Agri Logistic Ltd.

“At Godrej Nature's Basket, in-store storage is done through dedicated chillers and freezers. However, to ensure that storage, transportation and supply of chilled and frozen products is undertaken in a manner that ensures product integrity, we carefully select our suppliers. Many of our suppliers tie up with specialists 3PLs such as Snowman. They use refrigerated trucks, vans, containers for transporting perishable products. Surface storage options are often limited to refrigerated warehouses,” said Mohan.

“Due to growing competition, a few leading retailers are setting up their own cold storage facilities, but the cold chain facilities are still fragmented and hence 3PL providers will continue to play a major role in India,” concluded Mohan.