Probiotoc drink-maker Yakult Danone is now eyeing Tier II and III cities for expansion and looking to have its presence in 60 cities by the next fiscal year, a top company official has said.
According to a PTI report: Yakult Danone India, a 50:50 JV between Japan based Yakult Honsha and Groupe Danone of France, is currently present in 40 cities across 12 states in the country.
“We are trying to launch our products in Tier II or even Tier III cities in 2018. Now, we are present in 40 cities but we are going to expand it to more than 50-60 cities in 2018- 19,” Minoru Shimada, Managing Director, Yakult Danone told PTI.
Since its entry in 2008, the company had only one product, its flagship Yakult original, and a few days ago added Yakult Light to its portfolio.
In 2017, it sold 1.86 lakh bottles per day in India and in January this year augmented its manufacturing capacity at its lone facility in Haryana to 2.7 lakh bottles a day, he said.
On the possibility of setting up another manufacturing unit in India, Shimada was quoted by PTI as saying, “We can continue to expand our production capacity in Haryana but in future when customer demand will increase more and more, we will have a plan to establish another factory in India. Our production has to reach 7-9 lakh bottles per day then we can consider another facility in India.”
The company, which has been clocking a 20 percent CAGR over the last five years, also has a direct selling distribution channel – Yakult Ladies System – with 260 women at present and plans to scale it up.
“We will increase the number of Yakult Ladies in India so that we can meet the customer demand. Also, we are directly delivering Yakult to retailers, so we are going to purchase more and more refrigerated vehicles and we are appointing more sales staff so that we can distribute our products to more kirana stores and more outlets in different cities,” he was quoted by PTI as saying.
Yakult’s portfolio in Japan and some other countries include drinkable yogurt brand Joie, a hard-type yogurt brand Soful, nutritional drink brand Toughman, lactic drink brand Milouge, Yakult Gold that is targeted at senior citizens, a sugar-free tea with guava leaves brand Bansoreicha, among others, but Shimada said the company would be focusing on the probiotic category at present in India.
“We have other functional foods like guava tea, which can control blood sugar level but they are not probiotics products. As a global probiotics leader, we would like to focus on probiotics products first in most of the countries,” he told PTI.
French dairy major Danone recently exited the dairy business in India to focus on its nutrition business here and Shimada said it won’t have any impact on the joint venture company.
“Internationally, Danone are our probiotics competitors. In India we came together to manufacture a high quality product and to market it together. This joint venture between Yakult and Danone, I believe, has been successful till today,” he further told PTI.
“I am aware of that (Danone’s dairy exit) but I am focusing on probiotics milk drinks only and we will continue to manufacture and market this product in India. So definitely we will continue our business,” he was quoted by PTI as saying.