How the humble dahi became a multi-crore brand game with product variants

The Rs 1,000-crorecurd or yoghurt market is witnessing a lot of changes; the market has evolved from plain packaged curd to drinkable, organic, bio, flavoured and frozen yoghurt. And some of the biggest brands are jostling for market share

Sarmistha Neogy | Mumbai | June 10, 2014

Who would have thought that the good old humble 'dahi' or curd will one day spawn pan-India brands? Over the years, there has been a gradual shift in the consumption pattern for dahi; the market has evolved from plain packaged curd to drinkable, organic, bio, flavoured and frozen yoghurt. And modern women do not have the time or inclination to make curd. And with that, some of the biggest food FMCG companies, including multinationals, have turned dahi into a multi-crore branded market.

Reetesh Shukla, Associate Director, Food Services at Technopak, said, “The consumer is willing to experiment new, innovative product offerings available in the market as a result of wider international exposure has influenced the yoghurt market.”

According to a Technopak report, the Indian yogurt market is valued at around Rs 1,000 crore, or $182 million, comprising organised, packaged yoghurt and its varieties, packaged drinks and also the frozen yoghurt service market. This is expected to grow at a CAGR of 20-25% with the expectation that it will double itself in the next three years.

Subhashish Basu

Subhashish Basu, Business Head for Dairy Products, Mother Dairy, said, “Dahi is not a new product; it has been consumed for ages. Every region of India has a different concept of dahi, with high acceptability in the north and east. These are the areas where people, owing to their sweet tooth, prefer to have dahi with sugar. So, a product like 'Mishti doi' or 'Srikhand' does justice to their palate. I feel that when we use the word dahi, people automatically connect it to yoghurt, which creates a niche market.”

The Technopak data also stated that the packaged yoghurt brands comprise two broad segments. There are the national level players like Amul, Mother Dairy, Nestlé and Britannia, which constitute about 80% of the total packaged yogurt market thanks to their distribution networks and product penetration. The remaining 20% is made up by strong regional players like Karnataka Cooperative Milk Producers Federation, Parag Milk & Milk Products, Himalaya International, Tirumala Milk Products, The Nilgiri Dairy Farm, and VRS Foods. New international entrants in the markets such as Danone, Fonterra, etc., are also making their presence felt. The space is expected to become more competitive with other major business houses such as Reliance, ITC and CavinKare planning to enter the dairy space.

Mishti Doi – the mother of curds

Gone are the days, when Bengalis residing outside Kolkata, had to kill their craving for 'Mishti doi' or sweet curd due to the unavailability of the product. Brands like Mother Dairy, Britannia, Nestle and Danone studied the market well and found that is a major opportunity in sweetened curd. As a result, packaged 'Mishti doi' was introduced in the market.

Mother Dairy launched packaged 'Mishti doi' in the Delhi market a few years back, but they withdrew it after several complaints from consumers whose expectations were not met. The company relaunched the product in 2011 after several months of R&D.

Basu said, “We understood that an authentic mishti doi should have three things: right texture, taste and consistency. We also realised that the product name 'Mishti doi' in itself raises the expectation, as people automatically relate it to a product made in Bengal. The packaging was made in bright red, adorned with imprints of Goddess Durga and also 'rangoli' to give a feel of Bengal. The colour red symbolised celebration, a product to be savoured during festivals. The challenges which we faced initially were that owing to the short shelf life of curd, we had to create a separate cold supply chain and to decide on a go-to market strategy. So, after getting all the things right in Delhi, we replicated the successful model to other cities like Mumbai, Bangalore, Hyderabad, Pune and, finally, in Kolkata.”

Branded mishit doi in the home of mishti doi, Kolkata? Basu explained, “Why not? We just had to be sure of what we are offering to the customers there. Before the final launch in Kolkata, we did test marketing for six months on all flights from Delhi to Kolkata, serving Mother Dairy 'Misti doi' to the flyers. The response was tremendous and we entered the Kolkata market finally. The packaging there was different from the Delhi market, with cartoons of a Bengali husband and wife on it. This was because we wanted to make a shift from people consuming it only during celebrations to something on a more regular basis.”

Initially, when Mother Dairy thought of launching mishti doi in Kolkata, there were many who told Basu that it was a wrong decision and he should think over it. However, he went by his gut feel and was met with good response, which prompted him to launch the 'Aam doi' or the mango curd in the Kolkata market first.

The French company, Danone, which has a fairly good presence in the Indian dairy market, has also launched Mishti doi, whose taste has been widely appreciated by consumers. Both Mother Dairy and Danone have maintained very competitive pricing.

Hurdles to Overcome

The Technopak report tells us that yogurt consumption in India lags far behind the average consumption in most developed markets. When compared to such high consumption markets as France (which sees an annual consumption of 25 kg), Germany (24 kg) and Holland (23 kg), the per capita consumption in India is a meagre 2.3 kg per year. Again, the per capita consumption of the packaged, store-purchased variety is 300 grams, and this too is heavily skewed towards urban India (~1 kg), and is near-zero in rural India.

Basu explained, “Yes, the yoghurt market is a very competitive business with each of them doing their bit to stay ahead in the race. You can stay in this business if you give your customers the best quality product, innovate ahead of the curve and provide fresh product owing to the short shelf life of dairy products. One also needs to be patient as it takes time to reap results.”

In fact, when Nestle first entered the dahi market, it was unorganised and people were used to buying loose dahi then. It was not easy to change the traditional habits of people and it didn't happen in a day. The brand overcame this obstacle by developing a product, which would set high quality standards and then worked with consumers to increase the familiarity with packaged dahi and educate them in a clear and focused manner on the benefits.

Drinkable, Flavoured & Frozen Yoghurts

The flavoured and the frozen yoghurts are being marketed as a healthy alternative to ice creams or frozen desserts. The initial response from the consumers had been lukewarm, but now owing to the rise in the number of health conscious people, the consumption of frozen and flavoured yoghurts have increased.

Mother Dairy also boasts of a huge portfolio of drinking and flavoured yoghurts which range from sweet, mango, strawberry to salted lassi. The fruit-flavoured yoghurt is of blueberry, raspberry, mango, plum, orange and green apple essence.

Arvind Bhandari

Arvind Bhandari, General Manager (Dairy), Nestle India, said, “We continue to develop relevant products that provide nutrition, health and wellness. We pioneered the benefits of Probiotic in dahi for greater value addition. Our benchmark is Nestle Actiplus with probiotic in this category. Just recently we have launched two ready to drink products in chilled dairy category that are tasty, healthy and refreshing. Neslte Masala Buttermilk has the goodness of Ayurveda and contains a special mix of mint, cumin, ginger and rock salt. Nestle Sweet Lassi has less than 100 Kcal per pack and is a delight for health conscious consumers. All our products are developed with the help of Nestle R&D.”

In 2012, Amul entered the frozen yoghurt space with its brand 'Amul Flaavyo', which comes in mango, pineapple, strawberry, vanilla and misti doi flavours. The brand made its entry at a time when a string of frozen yoghurt chains had already marked their presence in the country, riding on the healthier and guilt-free dessert space.

Nitin Karkare

Nitin Karkare, Chief Operating Officer, FCB Ulka Advertising, Mumbai, said, “In India, frozen yoghurt is still a relatively new concept and a major section of the audience is yet to be introduced to the product. However, we believe that the product, due to its health benefits and excellent taste, has a great future.”

However, the rise of premium frozen yoghurt outlets in the country began with Cocoberry in 2009. When it entered the market, the concept of frozen yoghurt was not known to consumers and, owing to its premium price, it was not able to reach out to the masses. This prompted them to slash the price by around 40% and now the starting price is as low as Rs 30 for a single offering. Therefore, today all these outlets have adopted a strategy to either slash price points or reduce the portions of their offerings.

Advertising

For the marketing of packaged yoghurts in India, mainly use of television, print and outdoor has been used till date. These brands are also trying to gradually reach out to the audiences through the social media channels, even though as Basu said, “we still have a long way to go”.

FCB Ulka, the agency which conceptualised the TVC for Amul Flaavyo, worked on the brief for which they had to “create a new segment for the product”. The challenge for the creative team was to present consumers with a reason to switch from regular desserts to Flaavyo without it sounding like a diet food/corrective health food. The task was therefore to make Flaavyo stand out as a new category and impart a fresh, innovative look, while still holding the trust and credibility of the mother brand.

Karkare said, “The Amul Flaavyo campaign created a distinctive proposition of 'Be good to yourself' which in a stylised way implied the dual benefits of health and taste. Also, the visual tonality of the campaign was very different from the other communication that one saw for this segment. It is not transactional but packaged and presented in a very interesting manner through the story in the film.”

Basu spoke of the marketing strategies which Mother Dairy adopts and said, “Our latest television advertisement talks to the youth directly and comes with the new tagline 'Taste that lifts you'. Ogilvy & Mather, which created the new campaign, signals the brand's new philosophy 'Happy food, happy people'. Two years back, we were not that active on social media as we are today. It took us some time for us to realise that if we have to tap the Gen Y and make them like our product, we need to talk to them and be present where ever they are. Other than the above mentioned promotional methods, our campaigns are also supported actively by BTL activities.”

Ajay Gahlaut, ECD, Ogilvy & Mather, Gurgaon, commented, “Our task was clear cut: give a new face to the brand. And what better way to do that than by giving it a face of sheer happiness. Because that's the feeling you experience when you have a taste of their delightful range of products. It truly is an uplifting experience, every time. In the 60-second TVC, our aim was to connect with the audience, and make them want to have the ice cream, fruit yoghurt, lassi, mishti doi or milk, which the young adults live on.”

What Brand Experts Say

Harish Bijoor, CEO, Harish Bijoor Consults, said, “As generations get busy, most homemade health foods need an on-the-go avatar to make them more relevant. Keeping this in mind, curd is today an aggressively marketed item. Therefore, you have curd, buttermilk, lassi and other probiotic formulations that are marketed.”

“Value additions that talk the language of purity and nutrition will be market-crackers across towns. Most milk has a pesticide residue. If there is one curd that can stand up and market itself above it all, that is a USP in itself,” added Bijoor.

Anand Halve, Co-founder, Chlorophyll, said, “We all have this tendency to adopt exotic styles or etiquettes. When I heard about shoe salons which shampoo your shoes for Rs 500, I was really amazed! I mean how much time does it take to clean your shoes on your own that you actually need a shoe salon for it? But you will be really surprised that there are actually many who can afford to avail of this premium service. The point I want to state here is that even dahi takes no time to set, but people want to avoid the inconvenience of doing it. This has given marketers a scope to experiment and innovate in this space.”

Does this new, flavoured and frozen yoghurts category target only a specific audience such as the 'health conscious' and alienate the others? Halve replied, “The entire concept of people being health conscious is a complete fad; you will have a Diet Coke on one hand, but will also gorge on an entire pizza! So how does it harm you if you have a spoon of plain curd?”

The TVCs:

Info@BestMediaInfo.com

Info@BestMediaInfo.com