Sahil Bambade

HERITAGE FOODSAd hoc report

Introduction:

The Heritage Foods Limited was founded by Mr. Nara Chandrababu Naidu in the year 1992,
which is one of the fastest growing Public Listed Companies in India, with two business
divisions - Dairy and Renewable Energy. The annual turnover of Heritage Foods stood at INR
26,429 million in the financial year 2021-22.

Currently, Heritage's milk and milk products have a market presence in Andhra Pradesh,
Telangana, Karnataka, Kerala, Tamil Nadu, Maharashtra, Odisha, NCR Delhi, Haryana,
Rajasthan, Uttarakhand & Uttar Pradesh.

In the year 1994, HFL went public and was oversubscribed 54 times.

Heritage Foods Limited is amongst the top dairy companies in India. It operates through two
verticals - dairy and renewable energy. The Company carries a wide range of products like, fresh
milk, curd, paneer, ghee, buttermilk, UHT milk, lassi, flavoured milk, ice-cream/ frozen dessert
and other dairy-based products. Currently its products are present in 11 states. The Company has
a robust R&D policy, advanced technology for manufacturing and processing, top tier quality
control, a highly qualified team to oversee its operations. It has 18 processing plants, 187 bulk
coolers, mini chilling and chilling centres to ensure availability of fresh and high-quality
products
Mission

 To be a nationally recognized brand for Healthy and Fresh products with a revenue of
INR 6000 Crores

 To anticipate, understand and respond to our Customers' needs by creating high-quality

products and making them available through innovative and convenient channels

 To embrace the right technology to delight our Customers

 Advocating the balancing of economic, social and environmental aspects to create a

better tomorrow

 Empowering the farmer community through our unique 'Relationship Farming' Model
  Be the Employer of Choice by nurturing entrepreneurship and promoting empowerment,
alongside transparency

Vision
Delighting every home with Fresh & Healthy products and empowering the Farmer

Awards & Accolades

CII National Energy Conservation Awards for FY 20-21
 1st Prize won by Gokul Plant, Charndragiri (M), Chittoor Dist-517101, Andhra Pradesh,
India
 2nd Prize won by Bayyavaram Plant, Bayyavaram(V), Visakhapatnam District-531031,
Andhra Pradesh, India
 Certificate of Merit to Bengaluru Plant, Yadavanhalli (V), Anekal Taluk, Bengaluru
South-562107, Karnataka, India

CII National Award in Food Safety for the Year 2021

1st Prize won by B. Kothakota Plant, Kothakota (M), Chittoor Dist-517370, Andhra Pradesh,
India
• The central Board of Indirect Taxes and Customs conveyed its appreciation to the Company for
prompt filing of returns and payments of Goods and Services Tax (GST) as on 31st March, 2021
in the following states:
PUNJAB, HARYANA, RAJASTHAN, MAHARASHTRA, KARNATAKA ,TELANGANA
Certificate of Appreciation from Ministry of Finance

Key Managerial Personnel

During the year under review, the
Company is having the following
persons as Key Managerial Personnel.
Name of the Official Desi
Mrs. N. Bhuvaneswari Vice
Mrs. N. Brahmani Exec
Mr. A Prabhakara Chie
Dr. M Sambasiva Rao Naidu Pre
Mr. Srideep Madhavan Nair Kesavan Chie
Mr. Umakanta Barik Com

Future Plans
Company Is Creating a strategy for capitalising on possibilities in the dairy industry’s changing
landscape.
Heritage Foods: The road ahead Creating a strategy for capitalising on possibilities in the dairy
industry’s changing landscape. Through our long-term relationship with the farmer community
and continuous knowledge building initiatives The have built an integrated model that
encompasses ‘farm to home’ model across our value chain for milk and milk products.
Empowering farmers:
 Long-term relationship to procure milk with right quality and prices
 Offer good quality cattle feed
 Provide financing solutions
  Assist and empower farmers to improve yield of milch animal
 Educate and create awareness to improve socio-economic status
Technological advancements
The are constantly leveraging our technology-enabled network to improve our operational
efficiency. Our aim is to optimize operations across the value chain and create value for the
stakeholders using state-of-the-art-technology. Technology @ work Some of the initiatives
include: These technologies help in maintaining stringent quality control parameters and drive
towards product innovation The company has also introduced Heritage TUCH app in Hyderabad
so that consumer get hassle-free delivery
Diverse portfolio
With the support of our good manufacturing practices and strong research and development, we
offer a range of products with best quality. We also provide a variety of nutritional and value-
added products to the millennial, such as flavored milk, milk shakes, butter, ghee, curd, paneer,
lassi, frozen desserts, and ice creams. Some of our products are geared toward millennials,
GenY, and GenZ.
Penetrating into new spaces
We leverage our strong distribution network for entering new geographies and strengthen our
brand building initiatives. We are also expanding village level milk collection infrastructure bulk
coolers and chilling centers
Research & development
To support our innovation pipeline, we continue to invest in cutting-edge research and
development. We have high quality testing equipment in our R&D laboratory. Our strong R&D
infrastructure help us in quality improvement of existing products and new product development.
Also,
The Company aims to increase the penetration in the existing markets rather than entering new
ones. Considering the changing demographic factors like changing lifestyle, increasing income
etc., a penetration strategy can help in expanding its consumer base.

Product Categories
Milk
 Fresh Milk
Fresh milk is the most consumed product in India. It is also the most trusted source for essential
nutrients for health. With the increasing population the consumption of milk is also on the rise.
Health consciousness, dietary needs and rising living standard have also been major contributors
to rising demand of fresh milk. The growth rate for liquid milk is expected to be 16.80 per cent
during FY 2021-26
 A2 Milk
A2 milk is 100 per cent buffalo milk with full cream, which is procured from the farms and
sterilised in the Company’s plants. The milk is high in A2 protein, it boosts immunity and is easy
to digest.
 UHT Milk
UHT milk, or ultra-high temperature milk, is made by processing milk at high temperatures to
remove pathogens. The UHT process preserves all the nutrients present in milk and makes it
suitable for storage at room temperature for long periods MDA 30th Annual Report 2021-22
Heritage Foods Limited 96 without any preservatives. Some of the other growth-inducing factors
include ease of use, long-shelf life, changing dietary habits, etc. The UHT milk market in India is
expected to grow at a CAGR of 15.3 per cent during the forecast period (FY 2021-2026).
 Skimmed Milk Powder
The Indian skimmed milk powder (SMP) market experienced strong growth during FY 2015-
2020. Milk powder manufacturing is a simple process carried out in a large scale. It involves the
gentle removal of water at the lowest possible cost under strict hygienic conditions while
retaining all the desirable natural properties of the milk colour, flavour, solubility, nutritional
value. The Indian skimmed milk powder (SMP) market is expected to grow at a CAGR of
around 13 per cent during FY 2021-2026. Value-added Products
 Curd
Curd represents an essential part of a balanced diet and can also be consumed by lactose
intolerant people. Owing to the high content of calcium, vitamin D, proteins and phosphorus
present in it, curd helps strengthen bones and improve digestion. As per the IMARC Group
report the market exhibited double-digit growth in curd during FY 2015-2020. e curd market in
India is expected to grow at a CAGR of 15.3 per cent during the forecast period (FY 2021-2026).
 Paneer
The paneer market in India exhibited strong growth during FY 2015-2020. Paneer is a non-
fermentative and non-melting type of cheese, obtained by acid and heat coagulation of milk. It is
one of the most extensively consumed dairy products in IndiaThe paneer market in India is
expected to grow at a CAGR of 15 per cent during FY 2021- 2026.
 Cheese
The cheese market in India exhibited strong growth during FY 2015-2020. India is currently the
world’s largest producer of milk owing to which the cheese market holds significant growth
potential in addition to this, manufacturers are introducing a number of flavoured cheese
products, including pepper, garlic, red chilli flakes and oregano pickle, which cater to the
different tastes and preferences of consumers in India. The cheese market in India is expected to
grow at a CAGR of 24.80 per cent during FY 2021-2026.
 Buttermilk
Buttermilk represents an integral part of a balanced diet and has been traditionally consumed as a
refreshment drink for centuries in India. It offers relief from heat and has gained immense
popularity in India due to the country’s extremely hot summers. The demand for buttermilk is
also increasing as it is good for digestion and boosts immunity. The buttermilk market in India is
expected to grow at a CAGR of 22.4 per cent during the forecast period (FY 2021-2026).
 Flavoured Milk
Flavoured milk represents one of the most popular dairy-based beverages in India. The market is
expected to grow at a CAGR of 24.3 per cent during FY 2021-2026.
 Milkshake
The consumers who are mostly responsible for the demand of this product are the young and the
salaried class. The Indian milkshake market has reported strong growth during FY 2015- 2020.
The market is expected to grow at a CAGR of 25.3 per cent during FY 2021-2026. It is currently
being driven by numerous factors such as a large young population, changing lifestyles,
convenience, value addition, health consciousness, etc. Immunity Milk - Immunity Milk contains
anti-inflammatory properties, which help one maintain a healthy life. It is now available in four
flavours: turmeric, ginger, tulsi and ashwagandha.
 Sweets
Doodh Peda & Milk Cake are made out of the highest quality milk & ghee which is soft,
rich in taste and melts in the mouth. With the right amount of sucrose addition, it is rich
in taste and granular with better chewiness.
 Lassi
The Indian lassi market exhibited strong growth during FY 2015- 2020. Lassi, also known as
desi buttermilk, is obtained by the churning of curd. It also helps in fighting other summer-
related problems such as prickly heat, gastro-intestinal problems and the build-up of bacteria.
These factors have highly added to market growth. The Indian lassi market is likely to grow at a
CAGR of 21 per cent during 2021-2026.
 Ice-creams/Frozen Dessert
Ice-cream today represents one of the fastest growing food segments in India. The healthy
growth of the market can be Company Overview Statutory Reports Financial Statements 97
attributed to numerous forces. The ice-cream market in India is expected to grow at a CAGR of
17.3 per cent during FY 2021- 2026.
 Fat Products
Ghee, which is widely used in Indian cooking, is the pure butter fat left over after the milk solids
and water are removed from butter. It is very fragrant with a rich taste and is the second largest
consumed dairy product in India, after liquid milk. The ghee market in India is expected to
exhibit strong growth during FY 2021-2026.
 Butter Heritage
butter is made from best quality fresh cream and contains no added ingredients other than salt.
Manufactured in state-of-the-art processing plants with utmost care to ensure goodness, the table
butter market in India is expected to grow at a CAGR of 19 percent during FY 2021-2026.
 Cream
The Indian cream market exhibited strong growth during FY 2015-2020. Cream is a dairy
product which is used to give a smooth texture and consistency to food products. Nowadays, it is
widely used in the preparation of various dishes, desserts and beverages such as ice-creams,
salads, sweet meals, tea, coffee, etc. The Indian cream market is likely to grow at a CAGR of
around 15 per cent during FY 2021-2026.

Renewable energy business vertical

We have understood our environmental responsibility and are committed to increase our green
impact. We have constantly invested in renewable energy projects for captive consumption. We
have commissioned and distributing energy through our captive solar & wind power plants at 11
different plants.

Animal nutrition product portfolio

Opportunities For the Companies
Increasing Health Awareness - As an after effect of Covid people are opting more for nutrient-
rich and immunity-boosting foods.
Rising Income levels – With income levels rising, the spending on dairy and value-added
products has been on the rise. Affordable innovation would help people buy more of the products
from the Company.
Rising young working population - An increasing young urban population is expected to grow
from 31 per cent in FY 2011 to 36 per cent in FY 2036. The food sector is thus likely to see a
growth in consumption.
Demand for premium products - As income levels rise and lifestyles change, consumers are
demanding products with innovation and benefits. This provides an opportunity for the food and
dairy companies to innovate and launch products that will attract the consumers to the Company.

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