Q. What gives you confidence in the growth potential of the business? A: We are blessed to be in a very attractive industry. In a country with over 40% vegetarians, dairy products are the primary source of protein. At the same time, large part of traditional value-added dairy products are still catered to by the unorganized sector players. T his is rapidly changing with urbanisation and growing demand from consumers for high and consistent quality products. Another aspect that is driving the growth is the consolidation of customersales channels, especially the rapid growth of quickcommerce. I believe HFL is well-positioned to deliver sustainable organic growth in this evolving scenario for multiple reasons. In each of our platforms of milk, VAP, fat products, ice-creams/ frozen dessert, yogurt and animal feed, we are one of the leading players and we are steadily growing our market presence and share. We have one of the best supply chain capabilities delivering the highest quality products and we have strong farmer relationships that assure us of raw milk supply, in line with our growth ambitions. Further, our distribution network, omnichannel presence and strategic partnerships with key customer partners all combined give us a unique proposition for our customers and the potential to deliver attractive returns to our shareholders. Q. Where does HFL go from here? A: HFL is poised to grow from strength to strength. We execute our strategy through our growth framework, which is based on four pillars, serving consumers being at the core. We have been executing this framework over the past few years, successfully driving growth across the business. Our steadfast commitment to consumers, efficient operational management and optimized supply chain has enabled us to navigate volatile market conditions, maintaining and expanding our market share. Our sustained emphasis on cost optimization has kept fixed costs in check, while productivity enhancements have yielded tangible results, ensuring the long-term sustainability of our business. We have a compelling purpose, a clear strategy and a strong balance sheet providing the ability to invest for growth. We are committed to delivering sustainable value and long-term growth for all stakeholders. We expanded our contribution from value-added products with the launch of over a dozen of new products that better reflect the consumer aspirations of today, across all 6 product clusters such as drinkables, ice-creams, etc. We also increased our investment in consumer-facing marketing properties, which expanded our consumer base by inducing trials, increased repeat buys from existing consumers and increased brand loyalty. Q. What is your strategy for cultivating excellence at HFL? A: At Heritage Foods, we are committed to highest level of quality in everything we do. In fact, it is our commitment to quality, which has been the primary building block of our brand strength. The way we look at quality is through the lens of excellence in everything we do. It transcends our commitment to quality across our supply chain and even extends to the way we conduct every process within the company. Our commitment to product quality is quite well-known in the industry. It starts with bringing in the highest quality of raw milk from the villages where we procure. Our teams work closely with our farmer-producers in imbibing best farm and milking practices. Our strategy of limiting the distance travelled by raw milk, with a distributed network of chilling centres, is in line with our philosophy that high quality raw materials produce great products. We sustain this no-compromise approach to producing and delivering the highest quality products at every stage of the production and distribution process. We invest a lot of our efforts and resources in creating packaging that is of the highest quality in terms of aesthetics, ergonomics and economics. Q. What has been the biggest area of change you’ve seen over the last few years at HFL? A: As an ambitious organization that is aggressively chasing growth, we continuously change every aspect of our business for the better. While there are many aspects of HFL that are different today, if I had to pick two things that have changed the most, it would be our focus on serving the evolving needs of our consumers by building brand assets and our commitment to foster a high-performing team and investing to grow human capital. Serving our consumers and customers is at the centre of everything we do. Post Covid, we have step-changed our investment in our approach to consumer centricity. We have instituted brand health trackers and several other consumer research initiatives that give us unique perspectives on evolving consumer needs. Alongside this, we have built great strength in R&D department that allows us to create unique offerings that solve consumer problems and create products that are superior to others. We are investing in people to create a leadership bench and talent across all critical functions. This, coupled with the winning culture we are consciously trying to build at our company will help us accelerate ahead of the industry peers. 19 HERITAGE FOODS LTD | 32ND ANNUAL REPORT 2023-24 STRATEGIC REVIEW STATUTORY REPORT FINANCIAL STATEMENTS
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