Scorching summer makes Mother Dairy bullish on VADP led by ice-creams

Ice-creams category grows by 40-50 per cent over 2019 levels; to ramp up distribution and portfolio of sub-brand Nutrifit

Amidst soaring temperatures and revival of out-of-home sales, Mother Dairy expects to rake in revenues of ₹2,000 crore in FY23 for its value-added dairy business comprising of products such as ice-creams and dairy-based beverages. The company also plans to strengthen its presence in the probiotic dairy segment, dominated largely by international players, in a bid to woo millennials and Gen Z consumers.

Sanjay Sharma, Business Head-Dairy Products, Mother Dairy told  BusinessLine, “After two consecutive washed-out summer seasons due to pandemic-induced restrictions, we are witnessing exponential growth for our value-added products due to soaring temperatures and normalcy in consumer mobility. The ice-creams category alone is growing by 40-50 per cent over 2019 levels. Our production facilities are at full capacity to keep up with this strong demand.“

The company’s value-added dairy business also consists of dairy-based beverages such as buttermilk and lassi, ghee besides curd portfolio. Sharma said that the company is targeting ₹2,000 crore revenue from the value-added segment this fiscal with anticipation of an overall growth of 28-30 per cent over pre-pandemic levels.

“In the ice-creams segment, we are seeing everything fly off the shelves across all categories and price points as consumers want to indulge. Both impulse categories and in-home categories are seeing growth. In fact, we are in the process of introducing 8-10 new products across price-points,” he added

The company said, it has taken a nominal price hike of 3-4 per cent on select SKUs due to inflationary pressures such as increase in milk prices in the segment. ”We have kept the key price points of ₹5, 10, 20 untouched as these are critical for us to expand our consumer base in line with a shift from the unorganised to organised sector,” Sharma explained.

With heightened consciousness around health and wellness, the dairy major is also betting big on the probiotic dairy segment. It plans to ramp up distribution and portfolio of its sub-brand Nutrifit consisting of probiotic drinks, dahi and flavoured yogurts.

“We are looking at ramping up capacities for probiotic dairy segment over the next 6-8 months, and strengthening the Nutrifit’s distribution in the Delhi-NCR region in the initial phase followed by the Northern India region. We believe this will help us strengthen our connect as a company with millennial and younger consumers,” Sharma added.

As per industry estimates, the size of the probiotic dairy segment is pegged at about ₹300 crore, and its expected to grow at a CAGR of 17 per cent. “We currently have a market share of about 18-20 per cent in this segment and we want to further expand this share,” Sharma added.