The Nilgiri Dairy Farm Pvt Ltd, the company which runs the Nilgiri's convenience store chain in south India, is tying up with local vendors across the country to supply dairy and bakery products to the food retail formats of its new parent Future Group.
“We are forging manufacturing partnerships closer to market to deliver low shelf-life products such as milk/ curd/ yoghurts and have recently launched Nilgiri's milk, curds, paneer in Delhi. We are looking at similar partnerships in eastern India,” said Murali Krishnan, CEO, The Nilgiri Dairy Farm.
The first of such tie-ups is with Gopal Dixit promoted GK Dairy and Milk Products (Pvt) Ltd in Ballabhgarh which sells its products under the Gopaljee brand name. However, the dairy items sourced by Nilgiri will be sold under the Nilgiri's brand and will be distributed mainly across Uttar Pradesh, Punjab and Haryana markets starting next month.
In September, Nilgiri Dairy became a 100 per cent subsidiary of Future Group, with Future Consumer Enterprise Ltd (FCEL), the food and FMCG arm of Kishore Biyani-led Future Group buying the remaining 2.03 per cent in the south India based company. In November 2014, FCEL had bought 97.97 per cent stake in Nilgiri Dairy and its subsidiary companies, from private equity firm Actis Capital.
GK Dairy was launched in 1986 and deals in milk, flavoured milk, ghee and skimmed milk powder.
An e-mail sent to GK Dairy for more details on the tie-up did not elicit any response till the time of filing this report.
Later this month, Nilgiri Dairy will initiate talks with several contract manufacturers, mainly dairy farms in Kolkata, for similar tie-ups, he said.
Nilgiri's bakery and dairy products with longer shelf-life are already available at Big Bazaar, Foodhall, KB Fair Price and KB Conveniently Yours stores across the country, and a tie-up with local manufacturers will help it boost its range of products sold in these stores.
Nilgiri Dairy was founded in 1905 by the Mudaliar family. In 2005, private equity firm Actis picked up a majority stake in the company in one of the rare buyouts in India, back then. It is estimated to have put around Rs 300 crore or more in the firm.
Nilgiri's has 160 franchise-based outlets and supplies its products to 4,800 outlets spread across Kerala, Karnataka, Andhra Pradesh and Tamil Nadu. The acquisition gave FCEL an opportunity to increase its footprint of convenience stores in south India. FCEL's business prior to the deal was concentrated in north and west India.
FCEL (formerly known as Future Ventures) is a part of Future Group that operates modern retail networks in 102 cities and 60 rural locations though its various retail brands.