The Indian Cheese Industry: Britannia New Zealand Foods Private Ltd. Industries Limited (BNZF)

Company profile

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BNZF is a joint venture company founded in 2002 by Britannia Industries Limited (BIL) and Fonterra Co-operative Group of New Zealand. The company focuses entirely on the dairy business, with cheese being its flagship product. The other products it sells are dairy whiteners, butter, ghee (Indian clarified butter) and a malt drink- Anlene. All products are marketed under the 'Britannia MilkMan' brand.

BIL (known as Britannia Biscuit company until 1979) has essentially been a 'biscuit company', that had humble beginnings in Calcutta in 1892. Its big break came during World War II when the Indian Government contracted it to supply biscuits to the armed forces and since then it became a market leader in the biscuit segment. In 1954, the company also began producing and selling bread and it was as late as 1997, that it entered the dairy industry. In 2002, Forbes Global rated BIL as one of the top 200 small companies of the world and as a strong and trusted brand in India. The Wadia Group of India along with Groupe Danone of France, are equal shareholders in ABIL, UK which is a major shareholder in Britannia Industries Limited.

Fonterra Cooperative Group is New Zealand's largest company and amongst the ten largest dairy companies in the world. The dairy expertise and global experience for the Joint Venture comes from Fonterra Cooperative while Britannia's contribution is its brand name, large distribution network and the understanding of the Indian market.

Like BIL, BNZF also comes under the umbrella of the Wadia Group of companies. Its turnover in 2005-2006 is US$ 24 million with about 50% coming from processed cheese, 30% from the dairy whitener and the remaining 20% from butter and ghee sales.

Cheese Perpsective
BNZF only sells in the processed cheese segment and has five variations of processed cheese in the market, besides a cheese dip product. Over half of the company's revenues come form the processed cheese segment.

BNZF cheese is priced at a premium in the market, one reason being that the cheese is sourced from cow's milk (unlike Amul, that sources its cheese from buffalo milk).

Cheese products: Cheese cubes, Cheese singles (regular and Slim variants), Britannia Milkman Malai Chaska- a soft, fresh and creamy ‘dairy spread,’ which has a mild, tangy taste, Britannia cheese spread in different flavors like Masala Herbs, Spicy Cilantro, Peppy Pepper etc., and Pizza cheese.

Other products

• Britannia Flavored Milk in tetrapaks are popular. Other products in the milk range include products like Sweet Lassi (buttermilk) and Cold Coffee in 200 ml tetrapaks. The Lasssi is priced at Rs. 10 while the Cold Coffee is priced at Rs. 12.
• The firm has also entered the fresh pastuerised milk market, dominated by Government-owned milk marketers
• The firm has started supplying dresh paneer (cottage cheese) in and around Delhi, the national capital.
• The firm is also all set to test market its Daily Fresh Dahi (curd) in Bangalore.

Strategy
Rather than focusing on competitive pricing, BNZF has adopted a three-pronged strategy of freshness (lower pipeline stock), availability (improve distribution network) and visibility (more shelf space at modern trade). At present, cheese products, contribute to around 50 % of the Rs 120 crore turnover of the dairy product company (which markets its products under the brand name Britannia Milkman) while its Diary whitener contributes to 30% and butter and ghee together account for 20 %.

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