French Dairy Products Brand - Danone to Exit from India

Danone, French multinational food-products firm, is shutting down its dairy business in India. However, processed food sector in India is getting considered as a sunrise sector for the economy. SMEs (Small and Medium Enterprises) are major component of this industry.

Donone, however, is also closing down operations at its Rai plant in Haryana that it had set up in 2011 to produce dairy products. The move is aimed at improving its growth in the country, where its dairy business had limited success.

“We have great ambitions for our business in India and remain committed to invest and grow here through our well-established brands. In order to maximise growth opportunities, we are continuously analysing our portfolio and sharpening our focus to accelerate investments on the best performing categories and products. For this reason, we will discontinue some of the SKU’s (shelf keeping units) sold in India,"  the company said through an emailed statement.

While, its dairy portfolio comprised packaged milk, yogurts, value-added milk-based drinks and dahi, the dairy division remained at less than 10 per cent of its business here. While, its revenue numbers for India are not available, globally, the firm earns nearly half of its sales Rs 1,716 billion from dairy.Bulk of its revenue in India comes from nutrition business that focuses on infants and adults.

According to Euromonitor International, the firm held 5.5 per cent share of the Rs 41 billion local baby food market in 2016.Recently, Danone had announced that it aims to double its sales from nutrition business in India by 2020 and is taking measures to cut costs by 20 per cent.