Future Group to now deliver milk, eggs, bread at your doorstep

Kishore Biyani's Future Group is on to something big. It wants to address your every day problem of going to market to buy small but extremely important food items like milk, eggs, and breads. Though some new entrants are already doing well in the milk delivery space, Future Group intends to use all its force of over 1,000 retail outlets under brands like Easyday, Nilgiri and Heritage to keep its hold over the retail market.

According to a report published in The Economic Times, Future Group could announce its plan to enter the hyper-local milk-delivery market in the next two weeks in all metro cities of the country. The plan is to initially see how its 'milk-bread-egg' model works, and subsequently push in more profitable daily food items like vegetables, fruits, and grocery at your doorstep. The report quotes Biyani saying if the plan works, each of these Future Group brand retail stores could generate about Rs 20 lakh per store additional revenue per month.

So how does the model work?

Consumers will use a mobile app to order these grocery items, and Easyday, Nilgiri, and Heritage stores, located in 2-3km radius of your location will deliver them at your doorstep at the earliest. Apart from local milkmen who cover a huge portion of this segment, startups like Milk Basket and Supr Daily have already proved the business model is workable as Indian households cannot do without milk. On an average, Indian households spend around Rs 1,000- Rs 1,200 on milk, bread and butter items every month.

India's star delivery service companies Swiggy and BigBasket have also planned to enter the segment, which would not only increase their frequency of orders and more revenue but would also make their online business model more robust. Chinese giant Alibaba-backed BigBasket is in talks with Pune-based RainCan, Gurugram-based Milk Basket, and Bengaluru-based Daily Ninja. Swiggy is trying to expand its portfolio by including grocery items within its ambit.

RedSeer Consulting, a management consulting company, says the online milk delivery has an addressable market of $1.2 billion (Rs 8,000 crore) of which 8 per cent is online. Of the total $95 billion Indian dairy market, $15 billion is in six top metro cities like Delhi and Mumbai, says company. "The online milk delivery players are relying on the frequency of milk purchase to get consumers habituated with their services," says the company.

The Future Group plans a mega expansion of its small stores, and in future the number could touch 10,000 small stores. The idea is to gain big revenue from these small stores from Rs 5,000 crore at present to Rs 60,000 in the coming years. And, the milk delivery platform could play a big role in achieving that goal.

Future Group Chairman may be ahead in the race to capture the 'milk segment', but e-commerce giants Flipkart and Amazon are also not behind. They have already launched online platforms to deliver grocery items, and might also consider jumping into the hyperlocal milk delivery market.