This plant will produce the full spread of The Laughing Cow cheese products locally. Shares of Britannia Industries Ltd ended at ₹6,119.90, down by ₹88.30, or 1.42%, on the BSE.
Two years after Britannia Industries signed a joint venture with Bel Group, the joint venture (JV) has inaugurated its cheese factory in India in Ranjangaon, Maharashtra. This factory, which has seen an investment of ₹220 crore from the JV, will produce Britannia The Laughing Cow products.
The new Greenfield factory is integrated within Britannia’s existing dairy production facility. It has a current capacity of being able to produce 6,000 tons of natural cheese varieties like cheddar and mozzarella a year, and 10,000 tons of processed cheese products a year, like cheese slices, cubes, blocks, etc.
The plant produces nearly 4 lakh liters of cow’s milk daily from over 3,000 farmers in Pune and surrounding areas.
He adds that the cheddar cheese being produced in the factory will also allow the company to innovate and create products as per the needs of the Indian consumer.
Britannia and Bel Foods entered into a joint venture in December 2022, where Bel acquired a 49% stake in Britannia’s wholly owned subsidiary, Britannia Dairy Private Limited, which was then renamed as Britannia Bel Foods Private Ltd.
The idea, Berry says, is to capture the immense opportunity that India’s cheese market presents as part of the company’s decision to have a large dairy play.
“Cheese is a ₹3,500 crore category, growing at 20%, with a 21% penetration. The size of the pie and penetration of cheese in households will go through the roof,” he added.
As of June 30, 2024, cheese was a ₹250 crore business for Britannia, and with this partnership, it plans to grow it three times in five years.
“₹750 crore is a par target in five years; hopefully, we can be better than par and get closer to ₹1,000 crore in five years,” Berry told CNBC-TV18.
For Bel Group, which has been selling Laughing Cow products in Mumbai and Bengaluru even before the JV, this partnership has helped it expand the product reach to nearly every city in the country with over 37,000 touch points.
“We also started bringing innovation in the market, like the soft cheese in triangular portions. We have seen a triple-digit growth of 171% for this product so far. It’s just the beginning, a new brand, but this gives us a lot of confidence in the true potential of the brand,” Cecile Beliot, CEO of Bel Group, said.
Britannia The Laughing Cow products have been tailored to the needs of Indian consumers, where the cheese is fortified with protein, calcium, vitamins A, D, and B12.
This Greenfield factory, Berry adds, also brings more efficiency to the business and, as a result, could also potentially make its products more accessible in terms of price and make it more competitive.
“We’ve been selling at a 25-30% premium to Amul. Now we are in a position to see how we can reduce that premium and hopefully bring it to zero. If we are to do that with a good product, we can create solid momentum,” Berry said.
And while the JV has begun with cheese, Berry did not rule out the possibility of expanding the product portfolio.
“Bel does fruit purees, which we could look to bring to India at some stage,” he said.
But the focus for now will be cheese.
“Cheese is a nascent category; we’ve got to make sure we grow the business faster than the category and garner one-fourth of the market share in five years,” Berry added.
Shares of Britannia Industries Ltd ended at ₹6,119.90, down by ₹88.30, or 1.42%, on the BSE.
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