DHA and ARA rule change crucial for Danone’s Indian expansion drive

Danone India's Rodrigo Lima

The decision by the Food Safety and Standards Authority of India (FSSAI) to approve DHA and ARA-enriched infant food was a crucial factor leading to Danone’s ambitious growth plans for the country.

Last week we reported that the company planned to double revenue in India by 2020 and had started its expansion plan by launching infant formula Aptamil on the market.

Now Danone India managing director Rodrigo Lima has told us that regulatory changers ushered in by FSSAI had made the move possible.

“With the new Indian regulations that allow the addition of DHA and ARA in Infant food, we can now launch our global formulations in India,” he said. “Most of our products in the global portfolio contain DHA ARA – special nutrients that aid brain and eye development in children.”

DHA (Docosahexaenoic Acid) and ARA (Arachidonic Acid) are omega-3 and omega -6 fatty acids normally found in mother’s milk. Algae and fungus oils are vegetarian sources of DHA and ARA.

Last year the Indian regulator said DHA and ARA can be added to infant nutrition products, because they are required for the development of the eyes and nervous system of infants in the first two years of life.

Under the new rule for infant formula and follow-up formula-complementary food, FSSAI has permitted algal and fungal oil as sources of DHA ARA from Crypthecodinium cohnii, Mortierella alpina, Schizochytrium sp. and Ulkenia sp. at the level of maximum 0.5 per cent.

DHA of total fatty acids and ratio of ARA:DHA must be 1:1 minimum.

If a product claim related to the addition of DHA is made, then the DHA content shall not be less than 0.2 per cent of total fatty acids.

Danone said that the Aptamil launch  is just the first in a range of nutrition products that will be unveiled this year.

 “We have plans to launch some products our dairy and nutrition portfolio, including some global brands as well. For example, we will launch Neocate for children suffering from cow's milk allergy. There will also be a range of metabolic products for inborn error of metabolism by mid-2017. In addition to this, we plan to launch new variants from our existing portfolio and line extensions,” Lima revealed.

Local manufacturing

Danone said the all the products will be made in its Lalru, Punjab except Neocate, and diets for in-born errors in metabolism (IEM), which will be imported from the company’s global manufacturing facility.

“The company exports Protinex and/or Farex to neighbouring countries like Nepal, Sri Lanka and Bangladesh and we are evaluating the opportunity to launch other products in these markets,” Lima added.

Danone in India is growing at a healthy 20% YoY, and to achieve its 2020 growth targets, the company will launch 10 new products in 2017 to support its ambition to double its revenue target.  Danone said it also plans to grow its distribution and expand retail presence by exploring new formats such as e-commerce.

“As per Nielsen retail audit MAT SEPT 2016, the urban market size for Infant formula is INR 1290 crores (US$189 million), India presents a huge opportunity for Danone to launch its global formulations that are backed by decades of research,” Lima said.

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