India is the largest producer of milk and dairy products in the world, with the dairy market expected to see a compound annual growth rate (CAGR) of 7% between 2016 and 2021.
“India Dairy Products Market By Type (Drinking Milk, Ghee, Butter, Ice Cream, Milk Powder, Cheese, Yogurts, Probiotic Drinks and Others), Competition Forecast and Opportunities, 2011 – 2021” was published in February to look at the industry in the nation.
The 101-page report investigates market sizes, shares, trends and dynamics, Indian companies, and the various dairy sectors.
Also, there is analysis of imports and exports, and government policies and regulations.
Karan Chechi, Research Director with TechSci Research, told DairyReporter there are many growth opportunities in the Indian dairy industry.
“According to TechSci Research, a steady growth has been forecast in the drinking milk segment,” Chechi said.
“Value Added Dairy Products (VADP) such as cheese, butter, ice creams, yogurts, etc. are huge growth areas with a number of international players eyeing to tap the VADP segment in the Indian dairy industry.”
The report states that the Indian dairy products market is witnessing a shift towards healthier products such as probiotic drinks and yogurts.
In spite of this, Chechi said that western companies and cooperatives have so far played a minimal role in the Indian industry, and are limited at present to products such as yogurt, ice cream and flavored milk.
One recent reports in India highlighted issues with quality control, when fake milk was found on the market. Chechi said that quality and standards do pose a risk to the industry.
“Product quality poses a challenge for the dairy industry. According to Food Safety and Standards Authority of India (FSSAI), about 70% of milk samples collected across the country did not meet the required standards, and water was the most common adulterant in milk,” Chechi said.
In spite of these potential issues, more Indian dairy products are expected to be heading north to Russia shortly, as it comes to terms with an embargo on European dairy products. However, Chechi said that only two companies are currently exporting there.
“The Federal Service for Veterinary and Phytosanitary Surveillance of Russia (Rosselkhoznadzor) allowed the import of Indian dairy products to Russia in 2015 and only two companies are allowed to export dairy products to Russia: Parag Milk Foods and Shreiber Dynamix Dairies.
“These companies will continue to export good quality products until the next inspection of a number of India dairy products manufacturers. Hence, we can hope that this can be a beginning of more exports in the region,” he added.
While India is the top producer of milk in the world, herd output is not as high as in other countries.
There are many developments and innovations improving milk yields, and Chechi said this could present a problem, given other dairy economies have suffered drops in price due to high production.
“Yes, this could be a threat for the dairy industry in India, as in case of overproduction of milk, the prices are expected to get affected. For example, in China, due to overproduction of milk, it was poured into sewers in 2014-15,” he said.
There are also regional variations in the industry that are being addressed, Chechi said. In 2015, North India dominated the country’s dairy products market, on account of increasing per capita expenditure, rising youth population, introduction of value added dairy products, and changing consumption patterns.
He noted that according to the TechSci report, various government initiatives and introduction of new policies such as subsidized feed and fodder and a 30% subsidy on purchase of animals are just some of the incentives encouraging farmers to produce milk in the East India region.
There are many small farms and individuals making small quantities of milk, and Chechi said that organizing these small producers is something that will help the industry.
“There are initiatives implemented by large cooperatives such as Amul (Gujarat Cooperative), Mother Dairy (NDDB), etc., which are encouraging dairy farmers to be a part of their milk producer pool,” he told DR.
“Gujarat Co-operative Milk Marketing Federation (GCMMF) will be facilitating Jammu and Kashmir Milk Producers Cooperative Limited (JKMPCL) in upgrading its infrastructure to process additional milk at its plants, besides helping it to emulate the cooperative model for its working to improve livelihood of dairy farmers.”
Top six Indian dairy companies:
Amul (Gujarat Cooperative Milk Marketing Federation Ltd.) 16.5% value market share in 2015
Mother Dairy (National Dairy Development Board)
Karnataka Cooperative Milk Producers Federation Ltd.
Tamil Nadu Cooperative Milk Producers Federation Ltd.
Mahanand Dairy (Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit)
Andhra Pradesh Dairy Development Cooperative Federation Ltd.