Future Group Partners With New Zealand’s Fonterra For Dairy Business
Future Consumer Ltd. has signed a joint venture with Fonterra Co-operative Group to produce a range of consumer and dairy products for the Indian market.
“The 50:50 partnership, named Fonterra Future Dairy Partners, will enable Fonterra to establish a presence in India,” Lukas Paravicini, chief operating officer of global consumer and food service unit of the New Zealand-based company, said in a statement.
The companies are looking to operate both through brick-and-mortar stores as well as via online retail. Initially, the JV aims to open around 1,000 stores across India, while offering virtual services.
The statement said the stores will be in close proximity of target consumers and feature a complete digital experience of both in-store and a virtual market place.
Factors like India being milk sufficient with large target consumers is likely to work in the company’s favour, Future Group founder Kishore Biyani said in a conference today. Currently, the dairy segment contributes to about 10-12 percent to Future Consumer’s revenues, said Biyani, adding that they're looking to expand this range.
The venture will launch its first set of consumer products in the middle of next year using both locally sourced milk and dairy products from New Zealand, Paravicini said in the statement. “We'll also use this time to settle in the partnership infrastructure, learn the market and prioritise geographies.”
The announcement comes at a time when the dairy business is transforming in India, with market leaders investing heavily through mergers and acquisitions. Early this week, Hindustan Unilever Ltd. had signed an agreement to acquire Vijaykant Dairy and Food Products Ltd.’s ‘Adityaa Milk’ ice cream and desserts brand.