Abstract

In 2009, Reliance Dairy Foods Ltd (Reliance Dairy), a subsidiary of Reliance Retail, entered the country’s branded milk product market. It introduced a range of dairy products including milk, curd, butter, and flavored milk. Reliance Dairy had 75,000 to 80,000 liters of milk sale per day, out of which 10 percent was sold through the Reliance Dairy stores and 90% through its distributors. The price of Reliance Dairy was only Rs 28/- per liter which according to some analysts seemed to be value for money. The company claimed that strict hygiene was maintained in production and that its milk was of the best quality. Also, the product was considered to be free from chemicals and preservatives and adhered to the best packaging technology. The milk variants were also modified as per the geographical requirement of customers. The company tried to capture the market by following a strong supply chain and branding strategy. However, sustaining itself in the dairy business was difficult as the market was highly competitive and flooded with several brands such as Amul, Mother Dairy, and Nestlé. In April 2017, Reliance Diary was acquired by Hyderabad-based dairy company Heritage Foods Limited (Heritage). Heritage planned to achieve breakeven in Reliance’s dairy business by closing down milk procurement on loss making routes and shifting the processing and packaging of milk from third party facilities to Heritage’s own facilities.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the dairy industry in India.
• Study the importance of supply chain management in dairy products
• Understand the need for managing a balance between demand & supply for a perishable product like milk.

Keywords

Supply chain management, Reliance dairy, Branding, Competitor analysis, Dairy industry , Mergers