Britannia Industries, a major manufacturer of bakery goods, predicts that sales of cheese products will increase by a factor of five over the next five years, reaching approximately Rs 1,250 crore.
On Thursday, Vice-Chairman and Managing Director Varun Berry revealed that the company’s cheese division generates roughly Rs 250 crore in revenue. This comes after the company established a joint venture with the French cheese maker Bel earlier this week.
He told PTI that the government is hopeful the recent drop in palm oil prices, stability in sugar prices, and recent increases in wheat prices will lead to more stable commodity pricing in the future.
According to Britannia Industries Executive Vice-Chairman and Managing Director Varun Berry, the business expects domestic consumers to drive development in the cheese market, prompting a planned investment of Rs 160 crore over the next three years.
“Plant and equipment amount to Rs 150 crore that we have already invested. We want to spend about Rs 160 crore over the next three years, “In the words of Berry.
Berry claims that the cheese market is tiny, valued at a combined Rs 5,000 crore ($870 million) across both consumer and B2B sales, and is dominated by quick service restaurants.
“However, its growth rate is extremely high (22.3% CAGR). He continued, “This (consumer) market in the next five years should be closer to Rs 15,000 crore in the next seven years. It’s destined to be a blockbuster.”
Berry emphasized that even if the business received a fraction of that amount, it would still be considered a “fantastic achievement.”
He predicted that in the next five years, the company would expand by at least a factor of five.
Berry estimated that Britannia’s current cheese business was worth around Rs 250 crore when asked about its size.
It was revealed earlier this week that Britannia and Bel would form a 51:49 JV by selling a stake in BDPL, which is entirely controlled by Britannia (Britannia Dairy Private Limited).
Accordingly, the company is now known as Britannia Bel Foods. The JV intends to expand into adjacent categories after beginning production of cheese products at their Ranjangaon, Maharashtra facility.
Britannia Bel Foods is narrowing its scope to the local market for milk products with added value. In addition, JV owns the marketing rights to nearby markets like Nepal, Bhutan, and Myanmar.
Currently, some of the products are imported, but Britannia Bel Foods plans to start domestic manufacturing in stages, making them more inexpensive and accessible to customers.
Cecile Biot, CEO of BEL Group, has claimed that Britannia is a formidable competitor in India because of its iconic brand and extensive distribution network. This partnership is poised to dominate the rapidly expanding Indian cheese market thanks to the contributions of both parties.
With hopes of becoming a food conglomerate, Britannia is “studying a wide range of nearby, alternative formats. There’s going to be a lot of action unfolding, “Berry remarked.
The Tirunelveli (Tamil Nadu), Bihar, and Uttar Pradesh locations are the site of three new plants the business is building. He also mentioned that the company is investing in developing its facilities in Orissa and Ranjangaon, Maharashtra.
Berry has stated that there is currently no reduction in commodity prices.
“Palm oil is the only commodity showing signs of relaxation right now. The price of wheat has been steadily increasing recently. Sugar prices have been relatively steady. Generally speaking, we have experienced little change, if any, other than a flattening or mild inflation. Things should begin to stabilize as we move forward, “He added.
The Bel Group is an industry powerhouse, particularly in the cheese and healthy snacking sectors. In 2021, the Group’s sales amounted to 3.38 billion Euros.