Bakery foods company Britannia Industries expects its cheese products business to grow around five-fold in the next five years to touch around Rs 1,250 crore.
The company which earlier this week announced a joint venture with the French cheese maker Bel, currently has around Rs 250 crore turnover from its cheese business, said its Vice-Chairman and Managing Director Varun Berry on Thursday.
It is hoping commodity prices will come under control going forward with the softening of palm oil prices while that of sugar are stable although wheat prices are on the rise, he told.
The company is foreseeing consumption growth in cheese segment coming from the domestic consumer and has plans to invest Rs 160 crore in the next three years, said Britannia Industries Executive Vice-Chairman and Managing Director Varun Berry.
"We have already invested Rs 150 crore in plant and machinery. We are looking at investing around Rs 160 crore in the next three years," Berry said.
According to Berry, presently the cheese market is very small, estimated to be around Rs 2,500 crore from the consumer side and another Rs 2,500 crore from the B2B sales, largely dominated by QSR chains.
"But it is growing rapidly with a CAGR of 22 to 23 per cent. It is definitely a blockbuster in making," he said adding "this (consumer) market in next five years should be closer to Rs 15,000 crore in the next seven years." Even if the company gets a substantial share of that, it would be a "great achievement" for the company, Berry added.
"We are looking at growing at least five times in the next five years," he said.
When asked about the present size of Britannia's business in the cheese segment, Berry said, "It is about Rs 250 crore."
Britannia and Bel had earlier this week announced to enter a 51:49 JV by selling a stake into its wholly owned subsidiary BDPL (Britannia Dairy Private Limited).
Following this, the entity has been renamed Britannia Bel Foods. The JV will produce cheese products at Ranjangaon, Maharashtra facility and has plans to move to adjacent categories as well.
Britannia Bel Foods will focus only on value-added products in the milk segment in the domestic market. Besides, JV has also marketing rights for some neighbouring markets such as Nepal, Bhutan and Myanmar.
Presently some of the offerings are being imported but in phases Britannia Bel Foods would start domestic manufacturing, making them affordable and accessible to the consumers, Berry added.
BEL Group CEO Cécile Béliot said: "They (Britannia) have an emblematic brand in India and a powerful distribution system. By combining their expertise with our know-how and knowledge of cheese products, this joint venture is well positioned. and become a leader in the fast-growing Indian cheese market".
Britannia which has the ambition to be a food company is "looking at many new adjacent formats. You will see lots of excitement coming on," said Berry.
The company is in the process of putting three new plants - Tirunelveli (Tamil Nadu), Bihar, and Uttar Pradesh. It is also expanding the existing plant at Orissa and Ranjangaon, Maharashtra, he added.
Regarding the commodity prices, Berry said it is not softening right now.
"The only commodity which is softening right now is palm oil. Wheat prices are on the rise. Sugar has been stable. On a balance, we are almost flattish to slight inflation. Hopefully, as we go forward, things should come under control," he added.
The Bel Group is a world leader in branded cheese and a major player in the healthy snack market. The Group generated sales of 3.38 billion euros in 2021.
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