To open a chain of 500 exclusive branded retail in Maharashtra through franchise route
Integrated milk and dairy products company Prabhat Dairy has forayed into the Rs 3,000 crore dairy beverages category dominated by the likes of Amul, Mother Dairy and a few other regional players. The has company introduced four new value-added dairy beverage offerings to mark the entry. It also plans to open 500 exclusive branded chain of retail outlets called 'Prabhat Goodness Zone' in Maharashtra over the next two to three years.
Vivek Nirmal, joint managing director and chief executive officer, Prabhat Dairy Ltd, said the dairy beverage market growing by 20-23% annually is poised to more than triple by the year 2020. “Growing at 54% annually, milk beverages are already popular owing to high demand in the health drink segment. We are well-positioned to tap this market with our milkshakes, lassi and chaas offerings. The beverages will initially be made available across the state of Maharashtra in phase one, post which we will sell pan India,” he said adding that Prabhat Dairy wants to be a strong player in the home state before going national with these products.
Prabhat Dairy, which already sells from 40,000 retail outlets in Maharashtra, is taking the exclusive brand outlet route to further strengthen its milk beverage business. Pursuing the franchising strategy, there are plans to open 500 branded retail outlets across Maharashtra in the coming 24 to 36 months. “The outlets will be owned by franchisees who will enjoy an average 20% margin on the products being sold from the outlets. While we will spend around Rs 70,000 per outlet towards doing it up the franchise partner will have to invest between Rs 3 - 4 lakh. We are expecting daily sales of anything between Rs 8,000 and Rs 10,000 per outlet. And based on our pilot runs in Shrirampur (Ahmednagar), the outlets will be able to breakeven in three to four months from getting operational,” said Nirmal adding that Rs 30 crore has been earmarked towards scaling up distribution and marketing spends.
The consumer business currently contributes Rs 400 crore to the overall company revenues of Rs 1,557 crore for fiscal 2017-18. The management is expecting consumer business revenues to more than double at Rs 1,000 crore over the next two years. “We are targeting revenues of at least Rs 100 crore from the dairy beverages segment alone over the next three to four years,” said Nirmal.
Elaborating on the competitive intensity in the market, he said, there are a few large dairy cooperatives and private/ strong regional players. “Most of the players are in short shelf life products segment and ours is a long shelf life (180 days) offering. These kinds of products require very high quality of milk and that's one of our big USPs. Our pricing is very competitive at Rs 15, Rs 20 and Rs 30 for masala chaas, lassi and milkshakes. We will focus on distribution and marketing of these products in high consumption/ footfall areas, so a lot of below the line activities have been planned,” he said.
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