Reliance Retail has ventured into the high-volume, low-margin (3-5%) segment of retailing liquid milk through its own brand ‘Dairy Pure’, reports ET.
The product is initially launched in Hyderabad and would be rolled out nationally in coming months. The pricing is kept competitive to take on other players such as Mother Dairy, Vijaya and other regional players.
But Reliance is expected to face tough competition from Amul, which is the national leader in Rs.15000 crore branded packaged milk market. Significantly for Reliance, Amul does not have a presence in southern markets though recently it tied up with Aavin in Tamil Nadu.
Reliance Industries want to have a significant presence in India’s Rs.40000 crore branded dairy sector by setting up its milk procurement facilities in milk-rich states of Punjab, UP, Haryana and Bihar. Earlier, there were reports of Reliance eyeing dairy business of Nestle.
Reliance Retail is expected to do well in the dairy sector as there is good demand for dairy products in India and procurement is not an issue since India is world’s largest milk producer.
The problem lies in the fact that the sector is highly scattered and unorganised, leading to rampant adulteration. So the real challenges shall be to handle logistics efficiently and procuring quality material.
What next for Reliance Retail – own private brands of butter, cheese, chocolate and other dairy products, for sure.
Find this article at: http://www.labnol.org/india/corporate/reliance-retail-introduces-private-label-for-milk/872/
