“Unfortunately, the prices are going to be higher than last year across the categories where we play… all prices across all these categories have significantly gone up compared to last year,” Kesavan said. He attributed the increase to a combination of forces hitting raw material costs at once.
Kesavan pointed to two supply-side pressures behind the increase. The first is the war in the West Asia, which he said has had a ripple effect on input costs. The second is the government’s decision to raise the ethanol blending requirement under the E20 program, which has added to the cost of raw materials such as maize and de-oiled rice bran (DORB) — both used in animal feed. A weak monsoon has compounded the problem, cutting into green fodder and water supply for dairy farming.
Heritage Foods shares were trading at ₹405.15 as of 3:13 pm on the NSE. The company, which has a current market capitalisation of ₹3,757.77 crore, has seen its shares decline more than 17% over the last year.
Milk itself has grown scarcer and costlier. “Milk production has actually slowed down this year, and this has resulted in the milk as a commodity becoming more expensive,” Kesavan said. Cow milk prices have risen close to 13 to 14% year-on-year, he said, while buffalo milk has grown harder to source. Protein costs have also surged. “The cost of protein… has gone up tremendously. It’s almost tripled in the last two years, 18 months or so,” Kesavan said.
Milk accounts for roughly 52% of Heritage Foods’ revenue and is sold year-round, Kesavan said. The remainder of the business comes from value-added products, split between summer items such as curd and drinkable dairy, and festive-season items such as sweets, paneer, ghee and butter. Kesavan said demand for these products remains strong this season despite the repeated price increases.
Heritage Foods sources milk from more than 3 lakh farmers across nine states. Kesavan said the company is working to increase herd size and productivity among these farmers and help them manage rising feed costs.
Kesavan also linked the price trend to broader shifts in the industry. He said stricter labelling and packaging rules have pushed more consumers toward branded, packaged dairy products and away from unbranded, loose sales — a shift he called good for the formal dairy sector.He also pointed to rising interest in high-protein, probiotic, low-fat and A2 milk products, which he said reflects a shift in consumer focus from food security to nutrition. Quick commerce platforms, he added, have made these products more accessible by expanding where and how consumers can buy them.
For the full interview, watch the accompanying video
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