By Praveen Paramasivam
(Reuters) – Indian dairy firm Heritage Foods will increase the prices of its products this financial year to offset rising costs such as fuel and raw material expenses, its CEO told Reuters.
Consumer goods majors, including Nestle India and Cinthol soapmaker Godrej Consumer Products, are hiking prices to battle a double whammy of a slowdown in consumer spending and higher costs.
“The price increase will be across the board, not specifically on milk,” Heritage CEO Srideep Kesavan said last week. “It will also be on paneer and other dairy products … in line with covering our costs increase.”
A one-litre pouch of Heritage toned milk is priced at 53 rupees (62 U.S. cents). The company intends to increase the price by 1 to 2 rupees, or 2%-4%, in the financial year that started on April 1.
In comparison, the prices of milk and milk products in India rose 2.6%-2.9% in the January-March quarter, still below the broader inflation rate, according to government data.
Heritage, which mainly caters to the Southern states, raised milk prices earlier this year, its first increase in nearly two years.
It also plans to expand its footprint this year to 350,000 stores from 250,000 currently, including deeper growth in existing markets such as Chennai.
PROTEIN DEFICIENCY IN INDIA
Dairy brands, from Amul to Milky Mist, have lately been highlighting the amount of protein on packages of everything from cottage cheese to curd as affluent Indians strive to meet daily protein requirements.
Surveys indicate a majority of Indians have a protein-deficiency due to a largely vegetarian diet.
But Heritage, according to Kesavan, will focus more on maintaining the taste of its products rather than reformulating its products to add more protein.
“Taste is more important than loud claims,” he said.
($1 = 85.9450 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai; Editing by Sonia Cheema)
