Value added dairy products segment to maintain higher growth in India
As per industry experts, India is contributing about 17% of the total milk production globally. With the projected milk production of 254.5 million tonnes in 2021-22, India will become the largest milk producer in the world. As per Rabobank analysis, in 2016-17 Indian dairy market was largely divided into Liquid Milk (64%), Value Added Products (25%), Ghee (7%) and Milk Powder (4%). Value Added Products in dairy segment is further growing at 15% to 20% year on year that has varied products like cheese, UHT milk, curd, baby Foods, Ice-cream, Butter, Flavored Milk and Dairy Whitener.
Anuj Modi, Director, Lotus Dairy Products Ltd. says, "The market for value added products in the Indian dairy industry is expected to expand to 30 percent by 2020. The organised dairy sector in India needs to strengthen its procurement and processing infrastructure in order to scale up for the value added market."
He further added that, "On the other hand, consumers today are looking at health aspects very strictly and therefore the industry’s focus is shifting towards providing nutrition through value added products, which the unorganized market is incapable of serving."
Indian consumer is becoming more health conscious and demand for healthier products with natural, organic and an ayurvedic ingredient is increasing. Changing consumer lifestyle, increasing number of working women and increasing personal disposable incomes are leading to an increase in demand of value added dairy products.
Smaller packs of packaged dairy products are being aggressively marketed for the second and third tier markets to deepen a brand’s penetration and increase the volume in the country. The increasing numbers of players in the dairy sector are focusing their strategies towards the untapped semi-urban and rural regions, which offer significant opportunities for growth.
The US dairy industry is indirectly putting pressure on India to open market access. Recent decision of US administration to terminate the preferential trade status granted to India was warmly welcomed by US dairy Industry. If both the countries will join hands with good-faith negotiations in future, small organised dairy players may face stiff competition or may look forward JV possibilities.
