Chetan Vora, 36, owner of Home Fresh Mart departmental store in Mumbai, is busy placing new orders for dairy products for the festive season, when he usually sells more. His mix has changed to include more value-added dairy products like fruit-flavoured curd, yoghurt fortified with vitamins and flavoured milk. ?I have sold 40% more of these products compared to last year,? says Vora, although the value-added curd products cost double the price of loose curd.

Sector analysts say there is shift in preferences as consumers demand more value-added products for a healthy diet. ?Health conscious consumers are now opting for value-added products,? says Chanchal Biyani, at domestic brokerage GEPL Capital. ?Both Indian and multinational firms now want to have a first mover advantage in this space.? There are metro-centric products and modern trade will be a growth driver for these brands, she added.

The value-added dairy products segment, part of the R35,000-crore branded dairy products market, is growing at 20% every year and is pegged at R1,500 crore, said another analyst at a domestic brokerage.

Danone India, the Indian subsidiary of the 17-billion-euro Groupe Danone in September launched Danone Cremix, a stirred and flavoured yoghurt, in Mumbai, Pune, Bangalore and Hyderabad. ?The launch will strengthen our product portfolio targeted at health conscious consumers in one of the fastest growing markets in the world,? says Jochen Ebert, managing director and general manager, Danone India and Bangladesh said.

Danone will soon kick off a marketing communication campaign which includes sampling, outdoor activation, teaser and radio campaigns in Mumbai, Pune and Bangalore. Cremix will be available across 1,000 outlets in the first phase. Underlining the importance of emerging markets, Danone CEO Franck Riboud said in the company?s Annual Report 2010, ?Until recently, we assumed that the richest countries would be the main source of innovation.? He added: ?The strength of emerging-economy businesses is that they have …come up with simple, economical and very inventive solutions.?

Danone?s rival Nestle India recently launched a new range of value-added dairy products in select cities across the country including Nestle Actiplus Dahi, a low fat pro-biotic dahi with protein and calcium.

?Actiplus is a result of Nestl??s international dairy expertise, know-how in science-based nutrition and intensive R&D,? says Kumaran Nowuram, general manager (dairy) at Nestl? India. The parent Nestle SA, which sells Nespray fortified milk, Nesvita and Nestle Milo, will build its 30th research and development center in Manesar, near Gurgaon for 50 m Swiss francs.

?Our performance in 2010 was driven by continued investment in our growth pillars in line with our strategic roadmap,? said Paul Bulcke, Nestle?s chief executive after announcing its yearly results in February 2011. ?These include increasing distribution of PPPs and the continued roll-out of premium products in both emerging and developed countries and our focus on adding nutritional value to our products.?

Domestic milk product makers have also joined the race, breaking away from the traditional sales of milk and curd. Gujarat Co-operative Milk Marketing Federation or GCMMF which sells products under the ?Amul? brand is planning to launch a new range of yoghurts. ?We will be introducing fruit-flavoured yoghurts very soon,? said RS Sodhi, GMMF?s managing director. ?We are not worried about multinational competition.? ?Our strength lies in local production of dairy products, with production facilities across major metros in India,? he added.

GCMMF, with R8,200 crore in annual sales revenue leads the pack in the branded dairy products followed by Britannia Industries, Nestle India and Mother Dairy.