FMCG major Nestle India is building on its dairy portfolio with the recent launch of its two new ready-to-drink cold coffees, Chilled Latte and Intense Cafe. Nearly a third of its revenue comes from the dairy products segment. Arvind Bhandari, GM and senior VP, dairy, Nestlé India, discusses the prospects of this business with FE’s Anushree Bhattacharyya. Excerpts:
Where does Nestle stand in the dairy business in terms of market share?
We are placed right in the middle. The proposition is to offer value-added milk-based products. It is true that competitors in the beverage business have launched one or two products but those have hardly worked. Also, competitors lack in both a strong brand and expertise in the field of dairy. A milk-based drink can only be created by players who have been in the dairy business and have the wherewithal including sourcing, cleaning and processing. We are using the popularity of our brands to create new products and drive consumption. For example, Nescafe is a popular coffee brand. So we launched Nescafe ready-to-drink cold coffee in two flavours — Chilled Latte and Intense Café.
What about market share?
Even as the size of the market is not huge when compared with carbonated drinks, in terms of consumption the category provides a huge opportunity. We launched the drinks in cans about a month back and have already gained little less than 10% market share in the milk-based drinks category.
In terms of distribution, in how many cities is the product available?
With all indirect distribution, the product is available in 150 towns. The tetra pack, at present, is available in more than 60 towns. In an effort to build the brand we have also installed chillers at various outlets, so customers can have a taste of the drink cold. Additionally, we plan to tie up with eateries and corporates among others.
Do you believe Rs 35 is a competitive price point, compared against a bottle of cola priced at Rs 20 for 250 ml?
In the beverage industry, we have had examples of manufacturers starting with 300 ml bottle going to 500 ml to 1 litre and then returning to 250 ml bottles. We believe this drink will be consumed in combination. So the pricing has been done accordingly at `35. At this price point, it is well placed to compete against both juices and cola drinks.