Focus on innovation, consumer trust driving our business: Puneet Kusumbia, Heritage Foods

Looking at Heritage Foods Limited, FY25 revenue showed the dairy company reporting its highest-ever annual and quarterly revenues. For the fiscal year ending March 31, 2025, the company’s revenue rose 9% per cent year-on-year (YoY) to Rs 4,134 Crore and profit after tax soared 77 per cent to Rs 188 crores.

 The results were driven by increased market share in key product segments like curd and paneer, expanded distribution networks, and robust growth in the value-added products (VAP) category. Even in Q1FY26, it recorded its highest-ever at approximately ?1136.8 crore, a 10% increase year-over-year.

Commenting on the company’s Q1FY26 results, Puneet Kusumbia, Vice President -Marketing, Heritage Foods, “The growth was driven by our core category during the first quarter. Milk saw strong performance while paneer and ghee also did exceptionally well. Products outside the typical seasonal categories performed strongly too. The key drivers behind this growth were our sustained strategy to drive category growth, differentiation and efforts to boost consumer demand. Two key aspects of the strategy has been innovation and communications.”

He further said, “We have consistently invested in NPDs —new product introductions—and Q1FY26 featured strong launches, particularly on the milk portfolio. With some carry overs from Q4FY25, NPDs contributed strongly to the growth as well. Currently, revenue from our value-added portfolio is around 40% with the remaining 60% coming from our core category. The VAP portfolio has grown leaps and bounds over the last three to three-and-a-half years with the contribution up by almost 60% in this time.”

 Innovations, New Launches & Premiumization

In May this year, Heritage Foods launched its 360-degree Masterbrand campaign, 'The Power of Learning over Winning,' with the tagline, ‘Pure Doodh Ki Shakti.’ The campaign emphasised the purity of Heritage milk, as a source of nutrition and as a silent partner in a child's growth, resilience, and learning. The campaign spotlighted moments where mothers encourage their children to embrace progress over perfection, curiosity over competition, and lessons over short-term victories.

The film eased the societal and peer pressures mothers often face to ensure their child’s performance, while positioning the brand as a trusted partner to mothers. Kusumbia says, “The campaign delivered a positive, reassuring message alongside a strong product proposition, and the TVC was well received. These initiatives helped us navigate market challenges, including price increases, and the Q1 growth was largely led by milk.”

In July, Heritage Foods launched LIVO high-protein yogurt in to provide healthier option for health-conscious consumers, backed by a consumer trend that showed consumers are adopting healthier habits. The initial launch included flavors like Mango, Strawberry, Blueberry, and a Classic variant with zero added sugar and available in snackable 90-gram packs at a price-point of Rs 30. He says, “We entered the yogurt market with Heritage LIVO Yogurt, a product positioned differently from existing market offerings. With its high-protein content, LIVO Yogurt was promoted as a guilt-free snacking treat, aligning health benefits with indulgence. People are increasingly looking at an active and balanced life-style, look to stay active throughout the day, calorie intake and overall health.”

Heritage Foods identified two key opportunities based on consumer behavior - the 4pm snack break. Heritage Foods positioned Heritage LIVO Yogurt as a product that provides sustained energy for people throughout the day, with the catch phrase – Heritage Livo “Energy ka Lamba Dose” coined to capture that idea. The second insight was around sugar cravings after meals with LIVO Yogurt designed as a guilt-free snacking option, stating that the initial response has been encouraging. He adds, “Overall, these efforts reflect our commitment to continuously investing in our brands and building products that deliver convenience, health, and exceptional quality. Our focus on innovation and consumer trust has been central to driving our business forward.”

Continuing on the innovation spree, Heritage Foods also introduced milkshakes, probiotic buttermilk, launched new flavors and even ghee-based sweets, “all these innovations have helped this portfolio grow leaps and bounds.”

One success story for Heritage Foods is paneer – an ingredient that isn’t commonly consumed at home in the South. The goal was to make it easier for mothers to adopt and make paneer at home. A campaign focused on panner was done and followed it up with multiple activations across e-commerce, Modern Trade and on-ground connect.

The result, Kusumbia says, “The paneer portfolio has grown 2.5 times in the last 18–20 months. This growth in the value-added segment has come from a powerful combination of distribution, marketing initiatives, and innovation. These three elements together have driven the brand’s success.”

When it comes to premiumization, Heritage Foods’ core milk product in its core markets, such as Hyderabad, is positioned at a premium compared to what the cooperative dairies offer.

He states, “We’re already commanding a 10–15% premium depending on the market and category. That’s given us the confidence to extend this premium positioning into other categories. Premiumization as a trend comes down to two things: any product we offer has to deliver value that exceeds the price we’re asking, and that perceived value has to go beyond the equity that we have built with the consumer.” He continues, “Our focus is on delivering value-added products with unique propositions and innovative offerings that make consumers want to buy into that promise and willingly pay a premium. That’s the real driver of our premiumization journey.”

One example of premiumization is the launch of Heritage Foods Sampurna, designed for consumers who want to reconnect with their roots, tapping into the nostalgia consumers have for simpler times. The company launched products - including both cow's milk and A2 buffalo milk - under this platform, and has seen success in markets like Delhi, Mumbai, Hyderabad, Odisha, and Bangalore. He says, “We’re looking to scale Sampurna further. Consumers want to reconnect to simpler times and experiences, going back to their villages - even in today’s fast-paced life. That’s what Sampurna is about: bringing pure goodness from the village into the modern consumer’s home.

Ramping Up Distribution

 When it comes to media spends, Heritage Foods’ strategically operates where it looks at the portfolio from an investment point of view. If growth is planned in a particular category, then factors driving the growth is we analyzed. He says, “If marketing investment is one of the key drivers, then we prioritize that investment for the specific categories. From a media perspective, our split between TV and traditional media versus digital is roughly 50-50. We operate in a way where mass categories are led through TV, while smaller categories—maybe not “niche,” but those requiring a different kind of effort—are driven more through on-ground activations and digital campaigns. It’s always a mix of both but fundamentally, our marketing spend is pretty evenly split— around 50-50—between traditional and digital media.”

 Following the quick commerce trend, Heritage Foods has leveraged quick commerce and grown its quick commerce portfolio strongly. Today, modern trade and quick commerce portfolios for the company are almost equal in size. He says, “Any new channel requires investment, and we ensure our media investments, especially in digital, are linked to quick commerce. We drive a lot of traffic from social media and digital campaigns into this channel. We are tapping quick commerce as a media channel, gradually, steadily going from strength to strength.”

On the retail side, over the last three to four years, Heritage Foods retail reach has increased by roughly 50–60%. Its exclusive outlets, Heritage Happiness Points, also known as Heritage Distribution Centres (HDCs), started in FY2023-24 have now grown to 415 outlets, supporting business growth. Kusumbia says, “The channel has been remapped, and we now work with highly productive partners as a result of these efforts. Growth never comes from doing just one thing, it’s always multiple levers working together. The combination of innovation, distribution, procurement, and marketing, all of it together—is what’s driving this growth and bringing results to life.”

Today, modern trade and quick commerce combined account for over 15% of the revenue with the rest 80-85% coming from general trade with its core categories—like milk and curd— still moving through the traditional milk channels, such as agents and parlors.

Andhra Pradesh, Telangana are the core markets for the brand followed by Tamil Nadu, Karnataka. The brand has a presence in Mumbai and Pune and is looking to spread into the rest of Maharashtra. Similarly, it is leveraging its presence in Delhi to move into Haryana. Its strategy while expanding in new markets is to localize to connect with the local population with the focus on value-added products.

With Dairy being a key component for preparations in Indian festivals, the brand is making a big push across most categories, backed by a strong media presence. He says, “Heritage Foods has signed on as co-sponsor for Bigg Boss Telugu, partnering with JioCinema with a significant investment. It’s a perfect media recipe for the festive season, providing a sustained presence and opportunities to engage audiences in impactful ways through the show’s activities. We also have several interesting initiatives that push our core proposition with a festive twist.”