Lukas Paravicini, Fonterra’s chief operating officer global consumer and foodservice, said the partnership, under the name Fonterra Future Dairy Partners, will enable Fonterra to establish a presence in India.
“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 82bn liters – seven times the forecasted growth for China,” Paravicini said.
“The partnership will be driven by growth through profitability. The initial stages of the partnership will focus on product development, and marketing with the right capital investment made during this period. The first consumer products will be launched by the middle of 2019, using both locally sourced milk and dairy products from New Zealand.”
Changes to Indian dairy
Paravicini added the JV comes at a time of transformation within the Indian dairy industry.
“This has resulted in a big shift away from more traditional locally-based dairy businesses with limited product and brand differentiation, to a new era where more value-added and innovative dairy products are in high demand across the country,” he said.
Fonterra MD Sri Lanka & Indian Subcontinent, Sunil Sethi, said India was also seeing the emergence of new FMCG organisations like Future Consumer, which has experience working with international partners, and a nationwide supply chain and retail network.
Kishore Biyani, group CEO, Future Group, said, “Consumption of milk and other dairy products in India are increasing and will continue to receive strong demand. With Fonterra, Future Consumer will enhance its food and FMCG portfolio and will offer a variety of dairy products which are high in demand and consumed daily.”
Future Consumer Ltd is part of the Future Group, which plans to launch 1,100 stores this year. The stores will be within close proximity of target consumers, and feature a complete digital experience both in-store and through a virtual market place.
The new retail experience will add to Future Group’s existing footprint. Future Group is present in 26 of 31 Indian states with more than 2,000 trade outlets and 5,000 public distribution outlets and a nationwide cold-chain and ambient distribution network.
Future Consumer Limited has also set up the 110-acre India Food Park at Tumkur, Karnataka, in partnership with the Ministry of Food Processing Industries, Government of India.