No doubt, Danone will go after big numbers. The sheer size of the infant and adult heath food and nutrition category will be the big motivator.
Three things will be key in opening up these markets: consumer education, innovative products and easy reach. The adult nutrition and supplements category will grow hand in hand with the market for health and fitness products. To keep the momentum going, the company plans to launch a mix of global and local brands at regular intervals. The strategy is in line with Danone’s global positioning and commitment to “bring health through food to as many people as possible”.
The company will encourage local innovation to develop products that address the unique needs of Indian people. For example, consumer insight played a big role in helping team Danone to launch Protinex Bytes — a product that met a latent consumer need for an on-the-go protein solution that could not be met effectively with the powder format. In short, the idea was to launch “purposeful” products developed specifically for the Indian market.
The preventive health care and metabolic segment is another big focus area. Last year, the company launched Neocate, a specialised food for children who are allergic to cow’s milk. For its lead brand Protinex, Danone introduced a range of flavours including chocolate, vanilla and elaichi. Bakshi says over the next few years, the company’s focus would be innovation in infant and adult nutrition. “Protinex variants such as Mama, Diabetes and Junior have been gaining momentum in the health drink category and the company wants to invest further in developing more nutritionally relevant formulations across age groups and need states.”
The question is, does Donone have the distribution and marketing might to move ahead in a market that has well-entrenched brands? Indeed, it is not easy to push a highly specialised category if one doesn’t have a presence in a mainstream market.
According to N Chandramouli, chief executive officer, Trust Research Advisory, from a purely brand point of view, it would be easy for a firm to run and manage a single category against managing multiple categories. Also, the health and nutrition market is less complex than the dairy market. For one, in the dairy and food business, consumption habits vary vastly. In yoghurt, for instance, how and when the product is consumed differs significantly across regions. Last but not the least, milk and milk-based products are persishable. “In comparison, health and nutrition is easy to crack. The nutritional needs in same age groups or product categories are more or less the same. So, in terms of introducing and establishing a brand, it’s far easier to launch and run one in the health and nutrition category,” says Chandramouli.
At present, Danone has a network of 1,500 distributors and is available across major pharmacy and grocery chains. It has a sales team of 600 — the largest in the industry. Interestingly, following its exit from the dairy segment, Danone accommodated a number of its key people in sales and distribution into its health and nutrition business. The company also continues to leverage part of its distributor and retailer network that catered to the dairy business.