Six years after exiting dairy market, Danone doubles down on India push

Chandigarh: Indian consumers will soon see more Danone products on the shelves, CEO Antoine de Saint-Affrique told Mint in an interview on Friday , as the French food company considers India a priority market and will continue to invest in it. He declined to reveal details of the new products, saying: “The competitors in India are very strong and I will not announce in advance what we are going to do.”

On Friday, De Saint-Affrique was located in Chandigarh, 30 km from the company’s factory in Lalru. He also announced plans to invest €20 million over the next four years to expand the nutrition facility in Larru. Danone sells early life nutrition products and nutritional supplements in India under the brand name Protinex.

“We are committed to the market for the long term. We have products that are extremely relevant to India. About 25 million babies are born in India every year and we are one of the world leaders in nutritional products for early life. More and more senior citizens are facing health challenges problem, and we are one of the world leaders in medical nutrition,” he said.

in India since the 1990s

Danone has a long history in India, although its business is limited to adult nutrition and early life nutrition. The world’s largest yogurt maker entered India in the 1990s through a joint venture with Wadia Group to build the biscuit portfolio for Britannia Industries Ltd. The process lasted 13 years and included an intellectual property dispute over the Britannia Tiger biscuit brand. The dispute ended when Danone exited the global biscuit business.

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The company acquired the Wockhardt Group’s nutrition portfolio in 2012 for €250 million to launch its nutrition business in India. The company also ran a beverage-focused joint venture with Rahul Narang Group in the 2000s. The joint venture ended in 2015 after Danone exited the Indian beverage market, shutting down brands such as Qua and B’lue. The company also sells fresh dairy products such as milk and flavored yogurt, but exited the Indian dairy business in 2018.

Danone sells products across multiple categories globally – from essential dairy and plant-based products to yogurt (Activia), bottled water (Evian) and specialized nutritional products. The company operates in more than 120 markets and generated sales of 27.6 billion euros in 2023.

Missed the opportunity?

Asked about possible missed opportunities in India’s dairy market, where a growing middle class has benefited major companies such as Nestlé and Amul, de Saint-Affric said “bygones are bygones.” “What I’m interested in is the future. The growth in India is far from stopping. Look at the growth of the population, the growth of the middle class, and you will see the relevance of our products in these markets. So I don’t think India’s growth has stopped. It will end,” he added.

The company has only “scratched the surface” in early life nutrition, he said. It sells brands such as Dexolac in India and competes with Nestlé India and Abbot in the category. Penetration of such products in India remains low, he said.

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Protinex is the “sleeping beauty” — meaning it’s performing well but not as well as it should be — de Saint-Affrique said, adding, “There’s a lot we can do in the categories we have “Thus, developing existing categories is a “top priority,” he said.

De Saint-Affric was appointed to head the food company in 2021 after activist shareholders called for the ouster of the former CEO. In 2022, de Saint-Affric launched the “Revival Danone” plan, which calls for strengthening the competitiveness of core categories and regions, expanding its influence in new market segments and regions, and cultivating future categories.

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“The company today is very different from the company three years ago. Three years ago was a really turbulent time with COVID-19. The company faced a very public governance crisis… We were challenged on our performance. Three Years later, we have achieved stable results,” he said.

Suneera Tandon visited Chandigarh at the invitation of Danone.