NZ Milk planning to cull its world-wide brand portfolio

Sanjay Khosla

Sanjay Khosla, recently-appointed managing director of New Zealand Milk, has told an Indian newspaper he is planning to "prune" some of the company's 100 brands, valued at nearly $1 billion.

"The immediate priority is to prune the number of brands within New Zealand Milk's portfolio," Mr Khosla, who has declined media interviews in New Zealand, said.

He told the New Delhi-based Business Standard that the brand cull would be something similar to Unilever's "power brand" strategy.

The Anglo-Dutch multinational - for which Mr Khosla was formerly an executive - spent years sharpening its portfolio from 1500 brands to just the 400 most profitable labels.

New Zealand Milk has 100 active brands, valued at $966 million. The total value of the top 10 brands is $770 million and five of the top 10 brands are multinational and make up 60 per cent of the total value of the brand portfolio.

Mr Khosla said the brand cull would be followed by allocating resources in terms of building brands and research.

The company would also focus on the food service business and the integrated supply chain (the cow-to-customer value chain), he said.

Once New Zealand Milk met these targets, Mr Khosla said he planned to exploit markets that involved large investments and revenues.

Mr Khosla joined the $2.5 billion consumer dairy business last August and has been visiting countries where the company has a presence.

On his arrival in India and Sri Lanka last week, he told the Business Standard: "The agenda is to review the business here. The Indian operations are relatively small within the overall scheme of things."

Indian foods firm Britannia Industries - controlled by India's Wadia family and Groupe Danone - has a joint venture with Fonterra which ran into problems even before it was started in 2002. The Indian Government rejected a proposal for Britannia New Zealand Food to import produce from New Zealand after India's Department of Food Processing and Department of Animal Husbandry opposed a relaxation of constraints on dairy imports.

Mr Khosla declined to comment on the future plans of Britannia New Zealand Foods but said after reviewing relationships in certain countries, decisions would be made on whether to introduce Fonterra brands through the relevant joint venture or "go it alone".

- NZPA