Mother Dairy expects 5% growth in FY27; eyes expansion beyond Delhi-NCR

Mother Dairy, a wholly-owned subsidiary of National Dairy Development Board, expects 5% volume growth in the financial year as it doubles down on its expansion beyond Delhi-NCR.

“We want to change the perception of Mother Dairy as the NCR brand. We have entered non-NCR markets long back, Mumbai for example. We have a sizable presence. We are in Hyderabad market. We have launched in Rajasthan and Bihar,” Meenesh Shah, chairman, National Dairy Development Board and Mother Dairy, told Business Today.

Mother Dairy has seen its input costs go up due to the West Asia war and subsequent increase in fuel prices.

“Like it is for any industry, our input costs have increased. For example, packing materials cost has gone up by almost 30%. As of now, we are able to absorb the cost and meet our demand. Fortunately, the supplies are maintained. Logistics cost has also gone up with the increase in petrol and diesel prices,” Shah said.

To offset the rising costs, Mother Dairy hiked milk prices by Rs 2 per litre in May.

On being asked if the company is planning another round of hike following fuel price increases, Shah said, “We don’t plan to take another price hike.”

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On Tuesday, Mother Dairy unveiled the country’s first naturally degradable milk pouch in soil. The new pouch will be introduced in the cow milk variant across Delhi-NCR.

“The newly introduced packaging is designed to naturally degrade in soil within a few years rather than centuries and importantly, this transition is being undertaken without any impact on consumer milk prices,” Shah said.

While the new degradable pouch will add to the packaging cost, the company doesn’t plan to pass it on to the customer.
“As of now we have no intention to pass on the cost to the customer. The additional cost we are incurring will be absorbed as our contribution to the environment,” Shah added.

On changing customer preferences for healthy alternatives, Shah said the company is adapting to changing consumer habits.
“Consumer preferences always change and you will have to adapt your portfolio as per the changing consumer preferences. I think the best example is 'Promilk' that we launched. This milk comes with 30% more protein. It is a continuous process.

Wherever there are changes in consumer habits, we are also adapting to those changes,” said Shah.
On the impact of El Nino on milk output, Shah said El Nino will not impact the entire country. “India is a vast country. Even if certain parts of the country have low milk production, other parts will offset that,” he said.