Cattle owners in Punjab have something to look forward to in the days to come with Reliance Retail homing in on the state to establish India’s biggest dairy project.
A Reliance spokesperson when contacted said the dairy project is in the planning stage and the company does not comment on projects that are in the planning stage.
The retailer is said to be in discussion with thousands of farmers in this predominantly agrarian state for the exclusive supply of milk that will feed Reliance Fresh, its branded outlets that sell fruit, vegetables and dairy products. With 5,000 of these stores expected to be operational by 2010, the company is working ahead of time putting its supply chain in place.
Sources who did not wish to be identified said the company is wooing individual farmers as well as farmers’ bodies with a slew of incentives. For instance, the company will take care of the nutrition, health and medication needs of the cattle in return for exclusive supply of milk. In addition, the farmers get an extra cash premium on the selling price of the milk at the retail outlet.
Reliance is in the process of acquiring land for the processing centre. Sources said the company is also working at putting in place a comprehensive cold chain and warehouses to ensure hassle-free transportation and storage of milk.
Sources familiar with Reliance Retail’s plans say the company’s milk processing centre will be as big as that of the Gujarat Cooperative Milk Marketing Federation (GCMMF), the largest player in the domestic dairy industry today.
With Indian retailers are now in the race for the consumer’s wallet, they are trying every trick in the book. Reliance Retail will make a pitch for a slice of the lucrative domestic dairy market where it is lining up ambitious plans for private labelling.
Reliance will offer a range of dairy products including milk, ghee, butter, curd, paneer and cheese. The company plans to give customers the choice of getting these processes done at the store while they finish shopping, to ensure freshness of the product.
Milk is the largest agricultural produce in India’s economy with an annual production of 98 million tonnes. Only 20% of the milk produced and sold is in the organized sector dominated by GCMMF’s Amul brand and other cooperatives. Multinational firms Nestlé and Britannia, the latter only in a marginal way, are other players in the market.
Eager to get a foothold in this business, Reliance Retail will also woo customers with the convenience of loose and packaged milk and milk products, delivered at the doorstep. No other large format retailer is in this space yet.