QSRs have helped Indians become familiar with cheese: Britannia's Varun Berry

Britannia, in a joint venture with French cheese maker, Bel Group, inaugurated a cheese manufacturing plant in Maharashtra on October 9, to ride the wave surrounding an ingredient that is slowly gaining popularity among Indians

By Anubhuti Matta Forbes India Staff

Published: Oct 10, 2024 04:50:37 PM IST

Updated: Oct 10, 2024 05:06:24 PM IST

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The Britannia Bel Foods cheese factory, inaugurated on October 9, boasts a total production capacity of approximately 6,000 tons per year for natural cheese varieties like cheddar and mozzarella, and around 10,000 tons per year for processed cheese.

When Varun Berry, now the executive vice-chairman and managing director of Britannia Industries Limited (BIL) joined the company in 2013, he was keen on introducing a popular snacking option among Indians—cheese and crackers.

“However, even people from the highest income category from our sampling size had referred to cheese as butter,” he recalls.

Unfamiliar with the dairy product due to its high cost, limited palatability, and usage options, for most Indians, it has taken a long time for cheese to become a part of their diet. However, thanks to popular quick service restaurants (QSR) such as Domino’s and Pizza Hut, it is now becoming a consumption habit, Berry says.

“Therefore, we are ready to ride that wave and do our bit by making it a part of every Indian’s plate,” he adds.

For the 120-year-old company, initially known only for baked goods, turned into a multinational food products company, dairy had always been a contract-backed segment.

“However, with India being the largest dairy producer in the world, we decided to participate in it in some way,” adds Berry. “It looked like a big investment, but we knew dairy was going to be a large play for us,” he says.

BIL and renowned French cheese maker, Bel Group, entered into a joint venture in 2022 with the latter acquiring a 49 percent stake in Britannia's wholly owned subsidiary, Britannia Dairy Private Limited (BDPL).

L-R: Varun Berry, executive vice-chairman and managing director of Britannia Industries, Cécile Béliot, CEO of Bel Group and Abhishek Sinha, CEO, Britannia Bel Foods Private Limited

Two years later, on October 9, the company announced the inauguration of its cheese factory in Ranjangaon in Pune, Maharashtra, dedicated to the local production of Britannia The Laughing Cow products.

With an investment of nearly Rs220 crore from the joint venture including the Britannia Dairy facilities being leveraged, the new greenfield factory will produce a comprehensive range of Britannia dairy products including now Britannia The Laughing Cow Cheese with a full range of products—slices, blocks, spreads, diced and cubes.

Also read: One of the big moats of our business has been our ability to drive cost efficiencies: Varun Berry

Cécile Béliot, CEO, Bel Group said that to meet local preferences and nutritional needs, the products have been infused with essential protein, calcium, vitamin A, D, and B12.

The penetration of cheese into the Indian market, which is essentially a paneer (cottage cheese) and butter country, stands at a low 21 percent, according to BIL. Only five percent of Indian homes consume cheese, per a 2020 report by the European Journal of Molecular and Clinical Medicine. Together, Mumbai and Delhi account for half of the cheese market, the report adds.

Cheese is a Rs3,500 crore category, poised to grow by 25 percent shortly, Berry says he is aware of the opportunities that lie ahead, but also of the competition.

“Amul is the leader in the category. Only seven percent of their revenue comes from cheese-related products, so it may not be as important to them as it is to us, therefore we will work on this with all our passion,” Berry informs. “We want to grow faster than the overall market growth and would like to capture at least one-fourth of the market,” he adds.

As far as distribution and retail presence are concerned, Berry says that they want to take it slow.

"We want to focus on making it available in relevant markets. We are working with a consulting firm to chalk out our distribution system, how to expand, and how far to distribute cheese in India," he says.

However, BIL and Bel are focused on making the product accessible to most Indians.

“We are aware of the perceptions against cheese—high cost, or to be used on special occasions—but we are ready to combat that by introducing sachets priced at Rs15 or two-slice packs along with other initiatives to turn cheese into a product for Indians that can be consumed every day,” Berry informs.