Mother Dairy enters bread segment, aims Rs 25K crore turnover by 2025

Mother Dairy, a leading milk supplier in Delhi-NCR, on Thursday forayed into bread segment as part of its strategy to diversify business, and announced its target to more than double its revenue to Rs 25,000 crore in the next five years.

Mother Dairy has launched three types of breads -- sandwich, brown, and fruit & milk -- in a price range of Rs 15-40 per packet.

The breads will be initially available at its 1,800 milk booths and 'Safal' outlets in the National Capital Region (NCR).

The company is targeting a revenue of Rs 100 crore from bread segment over the next three years.

"We are diversifying into confectionery and bakery segment with the launch of our breads," Mother Dairy Fruit & Vegetable Pvt Ltd Managing Director Sangram Chaudhary told reporters in a video conference.

He said the size of the bread market in India is estimated to be Rs 5,300 crore currently and is growing at an average rate of 10 percent for the last five years. The highest consumption is of white bread.

Chaudhary said the company has introduced around 20 new products in the market, including five types of sweets.

Asked about the company's current turnover and future outlook, he said Mother Dairy's current annual revenue is around Rs 10,000-11,000 crore.

"We are targeting to reach Rs 25,000 crore turnover by 2025," he said, adding that growth could be slow this year because of Covid-19.

He said consumption pattern has changed a lot because of pandemic, with people preferring home delivery of products.

Elaborating on bread business, Chaudhary said, "The bread market in India is localised due to logistical and supply chain issues. With Mother Dairy, this has never been a challenge because of our existing network. Hence, having bread in our kitty was a natural fit."

The company is also exploring a larger bakery play, he said.

Sanjay Sharma, business head of dairy products, said breads are being currently manufactured by a third party and will be sold through 1,800 company outlets in the first phase.

However, retail distribution network as well as product portfolio would be expanded based on customers' response, Sharma said.

"We are looking at Rs 100 crore business in bread category over the next three years," he said.

A 500 gm packet of sandwich bread is priced at Rs 30, while the cost of 700 gm packet is Rs 40. Brown bread packet of 400 gm is priced at Rs 30, while the rate for fruit & milk bread is Rs 15 for 150 gm packet.

Multi-grain bread, whole wheat bread and kulchas would be introduced later.

Asked about quality concerns over fruits and vegetables sold through Safal outlets, except some stores in Lutyens and South Delhi, Choudhary said the procurement system has been restructured and the entire purchase is being done from farmers directly.

He said the quality of fruits and vegetables has improved now.

Mother Dairy sells over 30 lakh litres of milk per day in Delhi-NCR. Milk and other milk products are sold under Mother Dairy brand.

It sells fresh fruits and vegetables through around 400 Safal outlets. Frozen vegetables, pulses and honey are sold under the 'Safal' brand.

The company manufactures and markets edible oils under 'Dhara' brand. It has also entered into organic food business.

Mother Dairy was commissioned in 1974 as a wholly-owned subsidiary of the National Dairy Development Board (NDDB).

It was established under 'Operation Flood' initiative, world's biggest dairy development program launched to make India a milk-sufficient nation.