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• <nderstanding what is happening in the industry through some framework -eg :orter=s 5

!orces.

Overview of the Indian Dairy Market

/ndia is the largest producer of milk with around 899 'illion '# of milk production in 2089

#his milk is produced at around >5 million dairy farms with captive holding of two cows per

farm with an average yield of around 8000 liters per day %ut of this almost half of the milk is

consumed at the production level and balance comes to the market for direct sales and

 processing #he ratio of unorgani1ed to organi1ed sector in milk procurement and trading is

?0)@0

  /f we compute it on daily basis then around 84 crore liters of milk comes to the market

daily out of which around 88 crore is handled by unorgani1ed and > crore liters to theorgani1ed sector Cooperatives and government dairies process close to @5 of it and 55

is being handled by the private sector as per latest media reports

 #he milk coming to organi1ed sector is processed in close to 8@00 dairy processing plants

with an installed capacity of close to almost 895 crore liters per day #he average capacity

utili1ation is around ?0 in the organi1ed sector=s plant #he processing capacity in /ndia is

growing at a high rate of 20"25 in last 9"@ years #here have been both inorganic and

organic growths being considered by the investors from /ndia and abroad

 #he liberali1ation of the +airy /ndustry is likely to be exploited by multinationals /ncreasing

demand for fluid milk as well as value added products Bhile the milk production is growing

at slightly above @5 , the demand is showing slightly edge over it at around ? 7ow the

market is becoming conscious about the $uality of milk and ready to pay more for better

$uality and varieties of packed milk and milk products #he competition is becoming fierce

and gone are the days when the processors were minting high value on basic products like

 pasteuri1ed milk in poly"packs Bith !ood safety laws becoming more stringent and covering

cover cold chain also, the overheads of all the dairies on supply chain from farm to consumer

reach it is need to enhance the system advance

/ndians usually consume traditional dairy products as compared to the value added western

 products ut this pattern has been changing mostly in urban areas where people are trying

out a lot of new products A study states that the profit on buffalo milk is more than cow milk

 because it gets consumed more due to lower fat content

Challenges

Bith the rising demand, there is a pressure on production to utili1e the available resourcesefficiently ut lack of proper care in terms of health care facilities or good $uality feed for

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the main resource, ie the cattle is a major concern At the production level, there is lack of

$uality standards and workers with proper skills and training #he fluctuating supply and

seasonality of production along with the issues of adulteration and safety makes processing

difficult

#here is a lack of proper infrastructure for transportation of milk #here are too manyintermediaries involved which poses a concern for $uality of milk supplied Also, there are

not enough storage facilities which affects the logistics

'ajority of the market is still unorganised -40 of the milk left after self consumption by

farmers was distributed by unorganised milkmen in 2089.

Players in the industry

85 key players in /ndian market)

• &ujarat Co"operative 'ilk 'arketing !ederation (td -Amul.

• Darnataka Cooperation 'ilk !ederation (imited -DC'!(.

• 6ajasthan Cooperative +airy !ederation (imited -6C+!(.

• #amil 7adu Cooperative 'ilk :roducers !ederation (td -#C':!. AAE/7

• :unjab tate Cooperative 'ilk :roducers !ederation (imited -E6DA.

• %rissa tate Cooperation 'ilk :roducers !ederation (imited -%'!+.

• 'adhya :radesh tate Cooperative +airy !ederation (imited -':C+!.

• :arag

• Fatsun Agro :roduct (imited

•  7estle /ndia (imited, 'other +airy

• Eadilal /ndustries (td

• Dwality (td

• 'ilk !ood (imited

• Feritage !oods

!oreign +irect /nvestment -!+/. has been debarred in the /ndian +airy /ndustry due to

the risks involved %n comparing foreign markets like < or <D with /ndia we observe

that in /ndia producer gets more than >0 share of the customer=s money spent which is

much higher than around 9?"94 in those countries

/ncreasing the share of organi1ed sector would directly affect the farmers and any

involvement of foreign players in /ndian market will expose /ndian market to global

turbulence According to /ndian government, the current situation can be improved by

incorporating technology and innovation and hence !+/ is not needed

G http);;dairynewsin;good"investment"opportunity"in"indian"dairy"market"by"2020"reveals"

new"market"research"report"by"novonous;HEtm8eIlJ>/E 

http);;wwwprnewswirecom;news"releases;india"dairy"products"market"to"grow"at"cagr">"

techsci"research"report"5?44990>8html K

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Growth

/ndian dairy industry is going to experience high growth rates in the coming years According

to a #echci research report, dairy market in /ndia is expected to grow at a CA&6 of > #he

reason for this high growth rate can be attributed to the increase in consumption, income and

cattle in /ndia Also, due to the change in consumer habits, value added dairy products are becoming popular

'ilk which has the largest market share in all the product categories -@? in 2089. is

expected to grow at a CA&6 of 85, as per a report by 7ovonous #he second in terms of

market share is &hee and is expected to grow at a CA&6 of 8> %ther products like

*oghurt, :aneer -cottage cheese. and ice cream are expected to grow at a CA&6 of 82,

84 and 2? respectively

#he paramount factors driving the growth in the dairy sector include increasing population,

rising income levels, urbani1ation, fast changing food habits and rapid adoption of fast food

in /ndia Also, the fast growth of /ndian economy, rise of cooperatives and technicalinnovation in milk processing are some of the factors that will affect the growth of /ndian

dairy industry in the future

Environmental scanning

6egulatory :olicies

Earious regulations by the &overnment of /ndia on the dairy industry are)

 Prevention of Food Adulteration Act, 1954

G http);;wwwdsirgovin;reports;ittpItedo;agro;A!IAnimalsI'ilkI+airyI/ntropdf  K