Bel bets on healthy snacking and India's growing middle class as it bolsters Britannia tie-up

21-Oct-2024 - Last updated on 18-Oct-2024 at 12:34 GMT

Image: Getty/Veni vidi...shoot

The rise of healthy snacking is a strategic cornerstone for The Laughing Cow maker in India as the company continues to invest in cheese manufacturing in the region.

It’s been nearly two years since the Bel Group purchased a stake in Britainnia Industries’ dairy arm to form a joint venture, the Britannia Bel Foods, in India. Bel CEO Cécile Béliot called the Indian cheese segment ‘nascent’ but ‘very promising’, adding that the French multi-national wanted to become ‘a leader’ in the market having tested the waters ‘in start-up mode’ for four years prior. The tie-up would enable The Laughing Cow cheese products to be made locally while also leveraging Britainnia’s distribution system and network of dairy suppliers.

Fast-forward to October 2024, the JV has completed its first strategic investment by opening a €24m cheese production plant in Maharashtra. Integrated within Britannia’s existing dairy production hub – which already manufactures the full range of The Laughing Cow cheese products in formats including slices, blocks, spreads and cubes – the new facility will churn out around 6,000 tons of natural cheese such as cheddar and mozzarella and around 10,000 tons of processed cheese per year. The new facility is equipped with a pasteurizer, bactofuge and auto-standardization units.

But in a ‘nascent’ cheese market, what has demand been like for The Laughing Cow products to warrant expansion in manufacturing capacity?

“In October 2018, Bel entered India by launching The Laughing Cow brand with a differentiated range: the only cheese enriched with 5 essential nutrients (protein, calcium, vitamins A, D and B12), and covering all existing segments (slices, spreadable, blocks), and opening a new segment with the first spreadable portion (round box),” a Bel spokesperson told DairyReporter. “Since November 2022, we have been teaming up with Britannia to offer a common brand – Britannia The Laughing Cow – to the Indian market.”

In 2018, the brand was sold in just two cities – but by leveraging Britannia’s distribution network, The Laughing Cow is now supplied across 37,000 stores all over India, including all major cities: Mumbai, Bangalore, Delhi, Pune, Chennai, and others. Plans are afoot to expand distribution further to regions such as Jaipur, Nagpur, Jodhpur and Agra, we learned.

“The Britannia The Laughing Cow round box in particular has seen 171% volume growth this year [based on retail sales data, April 2023 - August 2023 vs 2024],” the Bel spokesperson added.

From a cooking ingredient to a snacking staple

Offering different formats is key to expanding the Indian cheese market and establishing new consumption occasions, according to Bel.

“While cheese in India is currently popular for cooking, we believe the future of cheese lies in its role as a healthier snack option,” the Bel’s spokesperson told us. “The triangular portions of Britannia The Laughing Cow are designed for accessibility, convenience, and safety. Enriched with five essential nutrients - protein, calcium, and vitamins A, D, and B12 - and specifically tailored to Indian preferences, [the product’s nutritional value] aligns with WHO recommendations.”

britannia the laughing cow — The co-branded product range features spreadable cheese, slices, 'squeezy' cheese for on-the-go-consumption, pizza and diced cheese for cooking, and the round-box cream cheese triangles The Laughing Cow brand is best known for. Image: Britannia Bel Foods

Socioeconomic changes are also at play here. According to government data, more than 250 million Indian citizens have transitioned out of poverty and into the nation’s more affluent middle class in the past 10 years.

India's middle class is now expected to grow to 38% of the country’s entire population by 2031 (from 31% in 2023) and has long been the fastest-growing segment in absolute and percentage terms, having increased by more than 6% per year from 1995 to 2021 according to PRICE ICE 36000 survey data.

For Bel, all this offers promise for innovation and amplifies the need for further investment in cheese. “As we continue to leverage our R&D to cater to the growing middle class, we see the shift towards cheese as a wholesome, on-the-go snack becoming a key trend in India’s dairy market,” the Bel spokesperson said.

How is raw milk sourced?

As for dairy farmers in the region, Britannia is supplied by around 3,000 local producers, which are said to adhere to the firm's best-practice program of management, breeding and feeding: including door-to-door animal 'health camps', farmer training and breed training programs, quality fodder seeds distribution, and a direct payment service to the farmer.

Britannia has also scaled the milk procurement program to 70 Village-Level Bulk Milk Coolers installed within a 100km radius from the factory, spanning 10 tehsils in the Pune and near districts, we were told. Britannia's Milk Collection Centers use 31 quality parameters at site and 20 additional parameters at unloading to test raw milk before it is accepted at the factory.

"Maharashtra’s leadership in milk production aligns with our vision to create a hub for premium, locally sourced dairy products," Bel's spokesperson said. "By harnessing Britannia’s integrated milk procurement program, we are setting new benchmarks in quality and sustainability while empowering dairy farmers at the core of our supply chain."