Heritage Foods to raise dairy prices amid rising costs in India

INDIA – Heritage Foods, a leading Indian dairy company, has revealed plans to increase prices across its product range by 2% to 4% this financial year to offset escalating costs. 

The price hike, effective from April 1, aims to counter rising fuel and raw material expenses, which have strained the company’s operations. 

This move aligns with broader trends in India’s consumer goods sector, where firms like Nestle India and Godrej Consumer Products are also raising prices to cope with higher costs and sluggish consumer spending.

The company, primarily operating in southern India, will apply the price increase to products beyond milk, including paneer and other dairy items. 

A one-liter pouch of Heritage toned milk, currently priced at US$0.62, is expected to increase by US$0.01 to US$0.02. 

Heritage’s CEO, Srideep Kesavan, emphasized the necessity of the adjustment, stating, “The price increase will be across the board, not specifically on milk. It will also be on paneer and other dairy products, in line with covering our cost increases.” 

This follows a period of relative price stability, as Heritage had not raised milk prices for nearly two years before a recent adjustment earlier this year.

India’s dairy industry faces mounting challenges, with milk and milk product prices rising 2.6% to 2.9% in the January-March quarter, below the broader inflation rate, according to government data. 

The sector is grappling with higher fodder costs and a shortage of dairy cows, which have kept milk prices elevated. 

Despite these pressures, Heritage reported strong financial performance, with a 60% profit surge in the third quarter of 2024, driven by robust demand for dairy products, as reported by Reuters.

Kesavan highlighted the company’s focus on maintaining product quality over chasing trends, particularly in response to competitors emphasizing protein content to address India’s widespread protein deficiency, largely due to vegetarian diets. 

“Taste is more important than loud claims,” Kesavan said, underscoring Heritage’s commitment to flavor over reformulating products. 

The company also plans to expand its reach, targeting 350,000 stores this year, up from 250,000, with deeper penetration in markets like Chennai.

As India’s dairy sector navigates rising costs and growing demand for healthier options, Heritage’s price hike reflects broader economic pressures. 

The company’s strategy to balance affordability with quality will be closely watched as it expands its footprint in a competitive market.

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