Danone floats new business unit to develop products for masses

Danone floats new business unit to develop products for masses

New Delhi: French dairy firm Danone on Wednesday launched a new business unit in India dedicated for developing products for the masses, as it looks to expand its presence in smaller towns and cities.

The new unit, Danone base of pyramid (BOP) India will focus on development and marketing of products that will primarily target smaller towns, where disposable incomes are low.

“We have launched a new business unit dedicated to BOP consumers. There have been a lot of initiatives within the group to create a separate business unit that will develop and market products that are meant for the masses," Danone BOP India director Eric Soubeiran told the news agency.

Announcing the launch of two dairy products under the brand ‘Fundooz’ priced at 10 and 5, the company said India is the first country where Danone has launched such a dedicated unit for the BOP by the group. “BOP population in India is around 600 million people and India is the largest producer of milk in the world. So we see that a potential," he said.

Danone, which is currently present only in the metros like Mumbai, Hyderabad, Pune and Bangalore, said penetration of dairy products in India is low due to cold chain and logistic issues.

“The population needs new solution in terms of nutrition and new positioning. It is not easy to target the new population. That is why we have decided to focus specific resources towards finding new solutions, and new ways of manufacturing and new distribution channels," he said.

The company said it will focus in six cities - Delhi, Gurgaon, Faridabad, Panipat, Sonepat and Ambala - before gradually moving to other parts of the country.

At present, the company plans to make its products available in around 1,200 kirana stores and 150 modern retail outlets across the six cities. “By next year, we are expanding into other parts of the country depending on the success of the two products that we have launched. We will double the number of cities as well as double the penetration," he said.

As part of its marketing strategy, the company is placing coolers and carts in the six cities apart from planning to reach out to around 40,000 households through direct marketing by October this year.

At present, the company has a plant at Sonepat, which is dedicated for making the ‘Fundooz’ range of products. Danone also has another plant in Pune, which caters to western and southern region.