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Danone to expand experimental Indian business unit

By RJ Whitehead , 01-Oct-2012

The experimental business unit that is dedicated to rolling out new Danone products for the masses in India has been deemed a success and will be expanded to other cities across the country.

The Danone BOP (bottom of the pyramid) unit focuses on developing and marketing products that will mainly be targeted towards smaller towns with lower disposable incomes than the metros. 

India was the first country out of Danone’s international operations to have opened up a unit dedicated towards the bottom of the pyramid.

Broadening horizons

Eric Soubeiran, Danone’s BOP director, said at an industry event in Mumbai: “The experiment has been great and we hope to scale it up nationally by 2013. Right now it is only in the north, but it will come to big cities where we are currently operating by early next year.

For us it is a development process to find the right balance between nutrition, price and shelf life so that we can reach the highest number of people. This has been our first step and we are pretty happy with the development so far. Fundooz is well known now; the brand has been very well accepted.”

The French company currently has a presence in Delhi, Bangalore, Hyderabad, Mumbai and Pune, although Danone’s penetration in these cities has so far been low because of issues in logistics and the cold chain.

The per-capita consumption of dairy products is very low here—it is 0.76kg, while in Europe it is 26kg. India is the largest producer of milk in the world, so there is a demand and need for milk-based products here,” said Soubeiran.

Market research

The Fundooz brand, which was launched last October, is one example of the BOP unit’s releases. A range of milk-based products for kids, fortified with nutrients such as vitamin A, Iron, zinc and iodine, it was formulated following a long period of research into the local market’s requirements.

Fundooz is the result of close to three years’ work to understand the food habits and nutritional deficiencies in India, particularly among young children, and we feel we can make a positive contribution here,” said Soubeiran at the launch.

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