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March 11, 2022

Fonterra, Future Consumer scrap India dairy venture

The New Zealand dairy group and the Indian FMCG supplier launched their tie-up more than three years ago.

By Dean Best

Fonterra and Indian FMCG supplier Future Consumer have decided to end their dairy business in the Asian country.

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In a stock-exchange filing, the publicly-listed Future Consumer said the companies had “agreed to wind down” Fonterra Future Dairy, the venture they launched in 2018.

Both companies owned 50% of the business, which employed 22 staff.

Fonterra Future Dairy sold milk, butter and cheese under the Dreamery brand. It also distributed the New Zealand group’s Anchor Food Professionals foodservice products in the country.

Research published in November by GlobalData, Just Food’s parent company, showed Dreamery did not feature among the 25 largest brands in India’s dairy and soy food market when measuring market share.

In the statement, Future Consumer said both those moves had “received positive feedback from consumers and customers”.

However, the statement continued: “The last few years have been challenging for the venture with Covid-19 causing significant disruption to the Indian market”.

The establishment of the venture was Fonterra’s latest attempt to crack the Indian dairy market. In the early Noughties, Fonterra set up a venture with Indian food major Britannia Industries. In 2009, Fonterra quit the venture after deciding too much investment was needed behind the business. In 2013, the world’s largest dairy exporter established a sales office in India, setting up a base in New Delhi.

Future Group’s statement added: “India, with its large and growing dairy-consuming population, remains a viable market for Fonterra and it will continue to have a presence and explore opportunities as they open up.”

Part of the wider Future Group conglomerate, Future Consumer sells food, personal care and home care brands in India. Its food portfolio includes Tasty Treat biscuits, Golden Harvest pulses and Nilgiris bakery and dairy products.

Just Food has approached Fonterra for further comment on the nature of its plans for the Indian market.

GlobalData’s analysis said the value of India’s dairy and soy food sector is expected to grow from INR1.27trn (US$166bn) in 2020 to INR2.43trn by 2025, expanding at a compound annual growth rate of 13.9%.

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What are the key consumer trends driving FMCG in 2022?

The consumer landscape has permanently changed since the COVID-19 pandemic began, prompting trends to emerge or accelerate, causing subsequent macro-economic shifts. In order to stay relevant, Consumer Packaged Goods companies must stay abreast of these developments. It is here that GlobalData can offer valuable assistance. Download GlobalData’s Trendsights: Trends to Watch in 2022 report to:
  • Gain insight into the 12 most important trends across the FMCG value chain
  • See the consumer survey data that underpins these insights
  • Learn what early-movers are already doing in terms of NPD and product marketing
Take a look at this report to give yourself the best standing in this developing market.
by GlobalData
Enter your details here to receive your free Report.

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