Future Consumer, which reported revenues of Rs 3,005 crore in 2017-18, plans to expand its confectionery and dairy range to drive growth, Kishore Biyani, group chief executive officer, Future Group, told FE. The company has signed a 50:50 joint venture with New Zealand’s Fonterra and may contemplate opening a manufacturing unit once volumes scale up, Biyani told Jharna Mazumdar.
What are your plans for Future Consumer?
We will add products in categories like snacking, sauces, dips, confectionery, air fresheners and toilet cleaning, among others. We are present in most of these categories and would add brands and sub-brands.
What are your plans related to the joint venture with Fonterra and what is the turnover you are looking at from this joint venture?
We have a strong retail network in the country while Fonterra has the expertise in dairying. India is the world’s largest and fastest growing dairy market and demand in the next seven years is set to increase by 82 billion litres — seven times the forecast for China. With Fonterra, Future Consumer will enhance its food and FMCG portfolio and will offer a variety of dairy products. The first consumer product will be launched by mid-2019, using both locally-sourced milk and dairy products from New Zealand.
What percent of your sales come from dairy products? What will be your investment in the joint venture?
Around 15% to 20% of modern retail sales come from dairy and value-added products. We will have products across the dairy segment comprising milk, ghee and yogurt. Driving this growth is the country’s young population where 70% of people are below 45 years old. They are digitally smart, live in urban areas, lead an active lifestyle, have more disposable incomes and want to consume products that are high in nutrition. We can’t comment on investments but it will be as per requirement.
Are you looking at a manufacturing unit in the country?
It is too early to comment and we will decide once we scale up volumes. Fonterra is a global dairy nutrition company owned by 10,000 farmers and their families. It is also the world leading dairy exporter, and has farming and processing operations across four continents. We are evaluating sourcing from multiple options within the country and also from outside.
Will Fonterra be sold only at Future Consumer stores or via other modern trade channels too?
Future Group is present in 26 of 31 Indian states with over 2,000 modern trade outlets and 5,000 public distribution outlets and a nationwide cold-chain and ambient distribution network, and the diary products will be available in all our points of sale. Future Consumer plans to launch 1,100 stores this year. The products will be available across retail stores in the country and will not be restricted to Future Consumer.
The company reported a loss of Rs 6.06 crore in Q1FY19 compared with a loss of Rs 10.15 crore in Q1FY18. In FY18 the company reported revenue of Rs 3,005.60 crore on loss of Rs 30.64 crore.
When do you expect to make a profit ?
We are eyeing a turnover of Rs 4,000 crore this year.