This fortnight ended with a news related to ramping up capacities for value added products as a solution to farmers not getting right price of their produce.. Economically Ramp up means creating capacities before the demand is developed to that level.
This news caught my attention and I better thought to share my observation on this topic. Apparently it looks a good strategy for dairy industry to plan and meet changing demand in value added products due to change in socio economic conditions. Health and nutrition holds a higher level in aspirational priorities of emerging middle class for their family as compared to their priorities for child education or career.
Now who will be doing it for value added innovative products segment. In Ramp up strategy the standard metrices of management do not prove to be fruitful. Let me give example from Indian dairy industry.
Let us look at 2-3 categories in which innovative dairy products being launched out of standard categories.
Say Greek Yogurt is one of the product which has entered into Yogurt segment. Now considering (guestimate) Yogurt to be a Rs 10000 Crore market. Now we may have Amul, Mother Dairy etc to be legitimate leader in market share for this category .Now the moment we look at this new value added segment then considering it to be a 2 % market of the total market meaning Rs 200 Crores and growing at say 70-80 % because of small base, we find none of the leader is leading the growth share rather it is a new start up i.e Epigamia.
A few of other examples may be as follows :
Frozen Yogurt by Cocoberry
Fresh farm milk by Pride of Cows,
Natural Ice creams by Naturals
Protein based Beverages for body building by Jago
Live kitchen cum shake and serve milk shake segment by Keventers
Patanjali in Cow ghee ,
Dairy Best in Low cholesterol Ghee ,
Milky mist and Ananda for Panir in thermoformed format ,
Metro Dairy Jullundhur in Curd in big jar
Quaker OAts with their first Breakfast flavored milk shake endorsed by sachin Tendulkar
and many more.....
In most of these examples new start ups played well on growth share and snatched away this opportunity from the big players having large market share. However large players also have some interesting launches like Memory milk, Probiotic ice creams and Rasmalai from Amul; Nutrifit probiotic from Mother dairy and Raita from Nestle.
Value added innovative health and nutrition segment in Indian dairy sector is just a tip of the ice berg today and opens up opportunity for one and all. In coming days we shall be watching on how the dairy market horizon changes with more and more of start ups coming out with creative business models and interesting products in this segment.
One thing is for sure i.e without captive or outsourced R&D and New Product Development it would be very difficult for existing dairy champions to enjoy the same market position which they enjoy today.
Change is the only constant.
Happy e learning
with best regards
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)