Danone, Yakult freeze probiotic drinks plan

NEW DELHI: French dairy major Groupe Danone and Yakult Honsha of Japan have come together as equal partners for selling probiotic drinks in India.

The new company, Yakult Danone India, has been set up as a 50:50 joint venture and its first product — probiotic milk —  is being manufactured at the Sonepat facility in Haryana.

The JV has seen an initial investment of Rs 136 crore but another Rs 100 crore would be pumped in by the partners over the next three years in enhancing product range and manufacturing capacity beyond the one million bottles per day at present.

It is interesting to note that Yakult Danone India (YDI) has been set up even when Danone has a running feud with the Wadias of Bombay Dyeing for setting up independent businesses outside the agreement the two partners signed much earlier.

Which is why Yakult Danone has played safe and already procured a No-Objection certificate from Britannia — the equal JV between Danone and Wadias — for beginning operations in India.

The NoC restricts the JV to dealing in only probiotic products in the Indian market; so if Yakult decides to bring its other businesses (pharmaceuticals and cosmetics) to India, Britannia’s nod may be needed again.

Kiyoshi Oike, the MD of YDI, says Danone has bought 20% stake in Yakult Honsha globally but the management decided that the Indian venture would see the partners holding equal stake.

“Though the market for probiotic drinks in India is nascent, health consciousness among Indian consumers is growing …we are looking at sales of one lakh bottles a day initially”.

YDI claims that Yakult, the probiotic milk launched on Wednesday, contains 6.5 billion “beneficial” bacteria in a 65 ml bottle, priced at Rs 10. Probiotics, a Greek word meaning “for life” are live microbes which, when administered in adequate amounts, offer health benefits such as improved digestion and better overall immunity.

Already, companies such as Mother Dairy, the National Dairy Development Board with its Amul brand and Nestle have introduced probiotic products (packaged dahi, ice-creams) in the country but no one has yet launched a probiotic drink here.

Oike says the company’s other milk-based probiotics would also be brought to India. Yakult is being distributed via retail outlets but YDI will use direct marketing route here for selling it.

b_sindhu@dnaindia.net