Britannia to expand cheese biz with French partner
Packaged food maker Britannia Industries Ltd expects its cheese business to grow fivefold to ₹1,250 crore over the next five years buoyed by an expected expansion in product portfolio following a joint venture with French cheese maker Bel.
Earlier this week, Britannia and Bel entered a partnership to offer a range of cheese products for the Indian market. As part of the terms of the alliance, Bel will acquire a 49% stake in Britannia’s wholly-owned subsidiary Britannia Dairy Pvt. Ltd and the joint venture entity will be renamed as Britannia Bel Foods Pvt. Ltd.
The firm will manufacture and sell co-branded products under the “Britannia” and “The Laughing Cow” trademarks, seeking to capitalize on the small, but growing cheese market in India.
The partnership will seek to develop the cheese market in India by offering a wide range of products. Bel sells cheese under The Laughing Cow, Kiri, Babybel and Boursin brands globally. “This JV is about cheese, and cheese is about 50% of our dairy portfolio. The trick is to grow this cheese portfolio five times
in five years. It’s about ₹250 crore right now,” said Varun Berry, executive vice-chairman and managing director, Britannia, in an interview.
The company has launched ₹10 cheese sachets of The Laughing Cow brand and will seek to expand its reach across the country in the coming months.
Berry said the companies could look at additional investments of ₹160 crore-₹170 crore in two years in plant and machinery.
“This is over and above what we have done already. If after that, there are some more formats that the consumers feel that we should bring to the country, we will look at it,” he said.
On Monday, Britannia said the cheese products will be produced at the JV’S Ranjangaon unit in Maharashtra. These products will hit the market by early-to-mid 2023.
More products from Bel’s global portfolio will also hit the market, company executives said.
“We are present pan-india with our own products. We’re going to jointly launch co-branded packs and go across the same set of outlets and beyond,” said Abhishek Sinha, chief executive, Britannia Bel
Foods.
The move marks Britannia’s greater play in the packaged cheese category, where per capita consumption in India is very low. Bel, a globally established branded cheese maker, generated sales of €3.38 billion in 2021.
To be sure, Britannia’s dairy business breached the ₹500 crore mark in sales in FY22 and nearly half of it was from cheese.
Its core portfolio also comprises cookies and biscuits. Its dairy portfolio also includes packaged curd and milk-based beverages. For the 12 months ended March 31, Britannia’s standalone operating revenue stood at ₹13,371.62 crore.
Britannia has been widening its presence in the packaged foods market, tying up with international partners to bring products into India. In 2017, it formed a joint-venture with Greece’s Chipita to sell packaged croissants in India.