Cavin’s, the new packaged milk brand from fast moving consumer goods (FMCG) company CavinKare will hit the market in three months. Milk and milk products under the new brand will be first launched in Tamil Nadu and by the second half of this financial year, it will be available in Kerala and Karnataka. The brand will venture into other regions once it acquires dairy plants in those areas.

Entering a new vertical, CavinKare has acquired two diary plants—one in Kancheepuram and another at Bhavani in Tamil Nadu, said T D Mohan, director, CavinKare. The two plants have a total capacity to supply five to six lakh litres of milk per day. “Around 15,000 litres of milk is being test-marketed in Chennai, Kancheepuram, Cuddalore and Puducherry, and the response has been positive,” he said. On the marketing arrangements, Mohan said, “We are currently engaged in creating the supply chain and distribution network before the brand is formally launched in the market. Being an FMCG company, we hope to leverage our distribution network for the new brand too”.

CavinKare will try to procure as much milk as possible directly from dairy farmers. “In two years, at least 70 per cent of the procurement will be made directly from the farmers. Avoiding middlemen will ensure quality, better service and better price for the farmer”, said Mohan. In two years, the company expects Rs 250 crore from the new venture by investing around Rs 120 crore. For acquiring the two new plants, it had invested around Rs 50 crore. It will spend Rs 10 crore this year on above-the-line as well as below-the-line promotion. Next year, it will scale up the production capacity and also look at acquisitions, including in other regions of the country. The company will have collection centres to procure milk from farmers as well as retail outlets of its own to sell the products. Apart from milk, Cavin’s brand will have curd, butter, ghee, cheese and value-added products such as flavoured milk. According to Mohan, south India consumes 160 lakh litres of milk per day, of which 60 per cent is provided by private players. Around 15 per cent conversion was happening from loose to branded milk every year and most of it was benefiting private players, he added.