Greek yogurt gets ‘cultured’ in the curd rice capital

The Indian dairy industry is at the tip of another major revolution, moving towards an amplified contribution from several milk products. According to a report by Aurum Equity, the organised dairy market size in India is 1.07 lakh cr ($16 bn), of which 36% is VADP. In its pursuit to become a developed dairy industry, India is pushing to change from just plain liquid milk to a VADP market and from unorganised and local to more of a structured and branded market. The VADP market is expected to grow at a 25% CAGR for the next few years.

NSSSO data suggests that over 2005-2012 both rural and urban households increased their expenditure on VADP at 16% CAGR. We see this number growing due to a shift in healthier eating and a movement towards higher protein and higher calcium which we receive from dairy products.

We have 5,000+ distribution points across India and approximately 830 distribution points in Chennai. We currently sell about 2.5 mn cups per month across the nation. TN has huge potential for us. The people have an affinity for dairy and for quality products. Retail formats in Chennai are especially conducive to serving the product in the best possible form and temperature and make it visible to the shopper. On average, sales from TN are contributing to 12% of our total sales. We are planning to set up a manufacturing unit in the South. We expect to begin operations in the first half of FY’2018 but the exact location has not been finalised yet. 

Though we are most widely distributed in and target urban metros, we see demand from many Tier 2 and Tier 3 towns in India. In TN, we are available in Chennai and Coimbatore but we’ve received interest from cities such as Madurai, Tiruchy, Puducherry and Vellore and we look forward to expanding to these areas soon. We aim to increase our distribution network to 30,000 touch-points within the next two years.

We’re experiencing a rapid growth and are projected to grow at the same rate in the following year. Epigamia established the Greek yogurt category in India two years ago. However, we don’t peg ourselves to the yogurt category only but rather see Epigamia as competing in the massive snack market, estimated at upwards of Rs 25,000 crore annually across India. In which case, we are just at the tip of the iceberg. 

We most recently raised our Series B funding of Rs 90 cr led by Verlinvest, a Belgium-based consumer focused private equity group created by the founding families of Anheuser-Busch InBev, and DSG Consumer Partners, an early stage venture capital firm run by consumer industry veteran Deepak Shahdadpuri. We plan to put these funds towards distribution expansion, setting up a new plant (in South India), an innovation lab, new technology and our marketing spends 

The snack pack was conceptualised keeping in mind a legacy of oily and fried snacks in the face of shifting consumer patterns towards seeking healthier lifestyles. It’s the first of its kind in India. So far, we’ve had a great response. The chunky granola mix-in has been an especially big hit with consumers. We will continue to play in the value added dairy space for at least the next couple years. With respect to our ice cream brand Hokey Pokey, we found ice cream to be very seasonal in India. We also saw a shift in consumer patterns towards healthier eating. So, we are primarily dedicating our resources and efforts to building Epigamia’s brand and product portfolio.