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DAIRY PRODUCTS

Prabhat Dairy to launch kesar badam lassi, vanilla blueberry milkshake
Tuesday, 22 May, 2018, 08 : 00 AM [IST]
Harcha Bhaskar, Mumbai
Prabhat Dairy Ltd plans to launch lassi in two flavours, mango and kesar badam, and vanilla blueberry milkshake. The company, which is among the fastest-growing integrated milk and dairy product companies in India, has forayed into the dairy beverage segment, with the launch of chaas, lassi and milkshake in tetrapaks, besides unveiling the Prabhat Goodness Zone, a franchise-based chain of retail outlets. It has envisioned the opening of 500 outlets in the next three years.

The company, which made these strategic announcements for its business-to-consumer (B2C) segment on the sidelines of its financial results for the fourth quarter (Q4) of financial year (FY) 2017-18, stated that it also improved its profits and maintained an incremental revenue, which are in line with its Vision 2020.

Dairy beverages
The dairy beverage market is growing by 20-23 per cent annually and is poised to further grow threefold by 2020. Citing the high demand in the healthy beverage segment, milk-based beverages are already becoming popular among the consumers, witnessing an exponential growth of about 54 per cent.

The recently-launched beverages, namely milkshakes, lassi and chaas, will be available in tetrapaks, priced at Rs 25, Rs 20, and Rs 15, respectively. Prabhat Dairy plans to expand its beverage market in two phases. In Phase-I, it will cover the state of Maharashtra. This will be followed by pan-India expansion in Phase-II.

Prabhat Goodness Zones
The company has also ventured into the retail segment with the launch of Prabhat Goodness Zone in Maharashtra. The venture is an ambitious project aimed at increasing its market share in the B2C segment across the state as it aims to open 500 stores by FY 2022. The company has already piloted the Goodness Zones in Ahmednagar district, and is looking for fast expansion under its renewed identity across the state.

Commenting on the announcement, Vivek Nirmal, joint managing director and chief executive officer, Prabhat Dairy Ltd, said, “At Prabhat, we constantly strive to provide consumers’ the ultimate product experience.”

“Hence, we consistently keep on researching and churning out new products, which help us in growing our presence in the marketplace,” he added.

“Our retail chains would be catering as a counter sale and local distribution point for Prabhat’s milk and milk-based products. We are excited about the Goodness Zone, which would provide us direct access to newer markets, through which we can reach millions of customers in a short span,” Nirmal said.

The Goodness Zone will sell all milk-based products, such as packaged and toned milk, ghee, cheese, chaas, lassi, dahi, shrikhand, paneer, milkshakes, etc. under its umbrella brand, Prabhat.

The company has already received multiple enquiries from other parts of Maharashtra, and is soon planning to expand the outlet chain to other states.

The outlets would also provide direct home delivery. With a stronghold in Maharashtra, Prabhat Dairy is currently identifying areas which have sales of over 4,000 litre of milk, and is already entertaining multiple offers from retail distributors across the state.

The company boasts of the best milk procurement systems in the country. It has recently added 100 bulk milk coolers in Maharashtra, taking the number to 230.

Financial results
Prabhat Dairy also announced its annual financial results for FY 2017-18 recently. Commenting on the financial performance, Nirmal added, “Our revenues are growing consistently year-on-year.”

“Our sales, especially in the B2C segment, has gone up, as we are consistently investing in the B2C segment. We have outperformed in the latest quarter, and will continue to see a rise in the coming year, which is crucial for us in terms of further strengthening in existing markets,” he added.

The total revenues for FY 2017-18 totalled Rs 1,557 crore, an increase of 10.3 per cent compared to revenues of Rs 1,411 crore in FY 2016-17.

The profit before tax rose by 84.6 per cent in Q4 of FY2017-18 to touch Rs 21.9 crore, compared to Rs 11.8 crore in Q4 FY 2016-17.

This is mainly because of the increase in the sales of cheese, which has doubled over last year.

Milk, paneer and curd are other products which are driving major sales for the company. The increase in institutional sales and growth in the B2C segment due to the introduction of new products should further provide the base for the company’s overall performance in the coming years.

Gross profit grew to Rs 348 crore, an increase of 26.5 per cent compared last year of Rs 275 crore.

Gross margin remained up and increased to 22.4 per cent of the total revenues. The improvement in gross profitability is due to lowering of milk prices that has helped.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) for Q4 in FY 2017-18 stood at Rs 41.5 crore, an increase of 36.6 per cent compared to Rs 30.3 crore during the Q4 of FY 2016-17.
 
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