New Zealand’s Fonterra to set up Indian joint venture

The multinational dairy co-operative, owned by around 10,500 New Zealand farmers, will partner with Future Group, a retailer, to produce a range of consumer and foodservice dairy products to meet the growing demand in India

August 8, 2018

Fonterra, the world’s largest dairy exporter, collects and processes around 22 billion liters of milk every year, catering to over 140 countries and more than 1 billion consumers

Demand for dairy in India over the next seven years is reportedly set to rise by 82 billion litres – seven times the forecasted growth for China – driven by a young consumer base

The partnership expects the first set of consumer dairy products to be launched by mid-2019, using both locally sourced milk as well as dairy products from New Zealand

Future Group operates in 26 Indian states with over 2,000 trade outlets and 5,000 distribution outlets as well as a nationwide cold-chain and ambient distribution network

Fonterra Group, a multinational dairy co-operative owned by around 10,500 New Zealand farmers, on August 8, announced a joint venture to enter the Indian market. Fonterra will partner with Indian retail company, Future Consumer, to produce a range of consumer and foodservice dairy products to meet the growing demand in India. Lukas Paravicini, Fonterra’s chief operating officer of Global Consumer and Foodservice, said that the partnership will operate under the banner of Fonterra Future Dairy Partners. The partnership will help Fonterra make the most of the opportunities in the world’s largest and fastest growing dairy industry that is undergoing a transformation. Demand for dairy in India over the next seven years is reportedly set to rise by 82 billion litres – seven times the forecasted growth for China.

The partnership will initially focus on product development and marketing, with the first set of consumer products expected to be launched by mid-2019, using both locally sourced milk as well as dairy products from New Zealand. The Indian dairy market has witnessed a steady uptake of more value-added and innovative dairy products. Future Consumer, a farm-to-plate food company by Future Group, operates a nationwide supply chain and retail network. “Consumption of milk and other dairy products in India are increasing and will continue to receive strong demand. With Fonterra, Future Consumer will enhance its food and fast-moving consumer goods (FMCG) portfolio and will offer a variety of dairy products which are high in demand and consumed daily,” said Kishore Biyani, chief executive officer of Future Group.

The companies expect demand growth to be driven by India’s 1.3 billion-strong population where 70 per cent of people are below 45 years of age, are placed in urban areas, health conscious and with rising disposable income. Future Consumer plans to launch 1,100 stores this year. The stores will be within close proximity of target consumers, and feature a complete digital experience both in-store and through a virtual market place. The new retail experience will add to Future Group’s existing footprint in 26 Indian states with over 2,000 modern trade outlets and 5,000 public distribution outlets as well as a nationwide cold-chain and ambient distribution network. Meanwhile, Fonterra, the world’s largest dairy exporter, collects and processes around 22 billion liters of milk every year, catering to over 140 countries.

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