After exiting India’s dairy market, French food giant Danone is making a major comeback in India. This time, however, the company won’t focus on dairy and beverages, but will focus on its specialized nutrition business.
India’s booming population, a growing middle class, and an increasing awareness of health and wellness are reasons why Danone has decided to reenter the Indian market.
Danone will expand its nutrition facility in Lalru (Punjab).
Learnings from Past
Danone’s initial joint venture with Britannia Industries ended in a legal dispute, and its later foray into the dairy and beverage markets failed to gain significant traction.
The senior leadership feels lack of proper pricing, product relevance, and an agile supply chain limited their growth earlier. Danone has now learned that success in India requires localization.
Danone’s strategy now is to combine its global nutritional science with local needs, a model that it has already implemented with brands like Protinex and Farex, which are well-known in India.
Focus on Nutrition
Danone will now focus on the following nutrition products.
Early-Life Nutrition: Products for babies and children.
Adult Nutrition: Danone feels its Protinex brand has lot more potential, and plans to grow this brand by expanding its product formats, such as introducing ready-to-drink options to increase consumption and convenience.
Medical Nutrition: This area is yet underdeveloped in India but is promising. Danone plans to offer post-curative care for patients with serious illnesses, such as cancer; this segment is already very successful in Europe and China.
To scale effectively, Danone is open to forming partnerships with B2B distribution companies and other non-competing FMCG players.
This approach will enable the company to expand its reach beyond traditional pharmacy channels and into a wider retail network.
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