Future group ties up with US food major Dole for packaged food distribution

Kishore Biyani-led group has said that the present partnership is for distribution of Dole's packaged food in India; local manufacturing will follow

The Kishore-Biyani-led Future Group on Wednesday said it had entered into a distribution agreement with American food major Dole, the world’s largest producer of fruits and vegetables. The partnership will see the retail major distribute the packaged food products of Dole by December-January at its outlets in Mumbai, Delhi, and Bengaluru in the first phase, Pier Luigi Sigismondi, president, Dole Packaged Food Worldwide, said in a conversation.

The partnership, he said, would be subsequently expanded to include local sourcing and manufacturing, as Dole prepares to scale up its presence in the country. Distribution will also be taken to over 30 cities in the country, covering over 750 stores of the Future Group. “We used to trade in fresh produce in the past in India. But with the growth of the packaged food market and the growing health consciousness of people here, there is potential for companies such as ours to tap into this trend,” Sigismondi said.

According to market research agency Euromonitor, the branded packaged food market expanded 17.6 per cent in calendar year 2018 to cross the Rs 5-trillion for the first time, as almost all categories posted a healthy double-digit growth. It estimates that this rate of growth will continue this year too, with the market likely to touch nearly Rs 6 trillion at the end of 2019.

Products by Dole include healthy meals, snacks and beverages (with no added sugar or flavours), which will be priced competitively to suit the budget of the Indian consumer. “A bowl of fruit, for instance, will be available for Rs 35, which is equivalent to the price of a pack of yoghurt,” said Anuraag Agarwal, head, business development, Future Group. “We’d been talking to Dole for a while and they felt this was the best time for them to step in with their packaged food range,” he said.

The tie-up with Dole also comes at a time when Future Group is expanding some of its other partnerships. On Monday, Fonterra Future Dairy, a joint venture (JV) between New Zealand-based Fonterra and Future Consumer, part of the Future group, said it was taking its dairy brand Dreamery into general trade. 

In June, the JV had launched Dreamery in Future Group outlets in the west; with a plan to roll out products in phases. The first phase has already seen Fonterra Future Dairy launch tetrapak milk, dahi, milkshakes, yoghurts and cheese slices. Kishore Biyani, founder and CEO, Future Group, had said the plan for the JV was to participate in the value-added dairy market as opposed to packet milk, where potential for growth was lower.

The Future Group is expected to sell Rs 900 crore of dairy items through its retail outlets in FY20. The JV with Fonterra is targeting a business of Rs 6,000 crore in the next five years. Besides, Dreamery, Future Group’s private label Tasty Treat, which is into snacks, and its wet wipe Kara, acquired from the Aditya Birla Group, have been taken into general trade so far.