India is the largest milk producing country in the world with the production of 132.4 million tons in 2012-13. The production of milk in 2011-12 which was 127.8 MT accounted for 17.2per cent of global milk production. The milk revolution in India has increased the per capita availability of milk from 130 gram/day in 1950-51 to 290 gram/day in 2011-12. The milk production has displayed a growth rate of 4.51 per cent during the 11th Plan period(2007-12) and scored 4.97 per cent between 2010-11 and 2011-12. (Source:NDDB and Basic Animal Husbandry & Fisheries Statistics-2013, Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, Government of India). Once a net importer, India has now turned a net exporter of dairy products. The value of dairy exports in 2013-14 is USD 546.1 million. Saudi Arabia, Bangladesh, UAE, Egypt, Nepal, Singapore and Pakistan are among the top export destinations for dairy products from India. India’s import of dairy products During 2012-13 and 2013-14 accounts for US $ 30.65 and 35 million. Milk and cream concentrates, whey powders, and cheese are major products imported among dairy products. New Zealand, France and Australia are the major suppliers of dairy products to India. (source DGCIS Annual Exports data).
Structure of Indian Dairy Industry: There are two major channels for milk collection and distribution that exist in India. The organized channel, predominantly served by cooperatives and large private dairies accounts for 31 per cent of the dairy market in 2010 whereas the unorganized channel is served by traders who procure milk from rural areas and sell in urban areas. There are close to 30 dairy organizations that process more than 10 lakh litres of milk daily. Amul Group (including Gujarat Cooperative Milk Marketing Federation) had a turnover of INR 191 bn ($3.2 bn) in FY 2013 and holds nearly one-third share of the organized market.
|Gujrat Cooperative Milk Marketing Federation Ltd. (GCMMF)|
|Kwality Dairy India Limited||Kwality|
|Mother Dairy India Limited||Mother Dairy|
|Modern Dairies Limited||Modern Dairy|
|Parag Milk Foods||Parag|
|Dynamix dairy industries limited||Dynamix|
|Dabone International Pvt. Ltd||Le Paneer|
|Britannia Industries Limited||Britannia|
Market Scenario: The total dairy market in India was estimated to be INR 3,000 bn ($60 bn) in 2011 comprising nearly 40% of the total Food & Beverages market. Of this the organized dairy segment was 20% or INR 600 bn. implying a significant opportunity for growth for the next decade or more. The total dairy market is projected to grow by a CAGR of 10-11% to nearly INR 5,000 bn or ($82 bn) by 2016 (Source: AC Neilson and India Food Guide, Edelweiss, February 2012).
Key dairy products include processed/packaged milk, UHT milk, milk powder, and other dairy-based, value-added products like butter, cheese, curd, buttermilk, fruit yoghurts, etc. The processed dairy products market is likely to grow at a rate of 15%. Further, processed dairy products are expected to contribute 30% to the dairy industry by 2016 in value terms. The organized and branded milk market, dominated by a large number of cooperative players, is likely to grow to a magnitude of 73% by 2030 according to CII-McKinsey FAIDA report 3, April 2013.
Government Initiative: The Intensive Dairy Development Programme, strengthening infrastructure for quality and clean milk production, Assistance to Cooperatives, and Dairy Entrepreneurship Development Scheme are some of the Indian Government’s important schemes/programmes for meeting the growing demand for milk. MoFPI also provide assistance under NMFP for setting up/upgradation of milk processing unit and setting up of cold storage for dairy products.
Opportunities in Dairy Sector: India is a land of opportunity for investors looking for new and expanding markets. Dairy food processing holds immense potential for high returns. With the growth of the economy a shift is seen from the regular diet of cereals to a more varied and nutritious diet of fruit & vegetables, milk, fish, meat & poultry products. This change in food basket of the nation further highlights the need to build a robust production as well as supply chain network of milk products. The important growth drivers are:
- Huge population of Milch cattle
- Growing domestic demand for safe, nutritious, and health-promoting convenience milk products
- Governments Initiative
- Technical innovation in milk processing
- Growth in retail segment
- Potential to catapult India as major dairy exporting country