Press release
India Dairy Products Market Expansion Driven by Rising Dairy Consumption
India Dairy Products Market Projected to Reach USD 1216.57 Mn by 2027 Amidst Rising Demand and Export OpportunitiesThe India dairy products market, valued at $1,216.57 million in 2027, is expected to grow at a compound annual growth rate (CAGR) of 7.13% during the forecast period. This growth is driven by increasing milk production, rising per capita consumption, and expanding export opportunities.
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India Dairy Products Market Growth Drivers and Opportunities
India has maintained its position as the world's largest milk producer since 1998, with milk production increasing from 17 million tonnes in 1950-51 to 176.4 million tonnes in 2017-18, and further to 187.7 million tonnes in 2018-19. This surge is attributed to the significant role of dairying as a supplementary source of income for millions of rural households, particularly among small and marginal farmers and landless laborers. The per capita availability of milk has risen from 130 grams per day in 1950-51 to 374 grams per day in 2018-19, surpassing the global average of 294 grams per day in 2019.
Despite being the largest milk producer globally, India's share in the international dairy trade remains modest. However, there is a growing opportunity to enhance exports of dairy products such as Skimmed Milk Powder (SMP), butter, ghee, cheese, and buttermilk. Key export destinations include Turkey, the United Arab Emirates, Egypt, Bangladesh, Bhutan, the United States, Saudi Arabia, and Malaysia. The government's focus on increasing processing capacity and improving cold chain infrastructure is expected to bolster export potential and meet international quality standards.
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India Dairy Products Market Segmentation Analysis
The Indian dairy products market is segmented based on product type and distribution channel.
Product Type: The market encompasses a variety of dairy products, including liquid milk, ghee (clarified butter), yogurt, butter, cream, cheese (including paneer), dairy whiteners, ice cream, and milk-based baby food. Liquid milk constitutes approximately 65% of total dairy production, reflecting its staple status in the Indian diet. Value-added products such as ghee and yogurt each account for about 8% of the market, while butter, cream, cheese, and dairy whiteners collectively represent around 10%. The ice cream segment holds a 4% share, and milk-based baby food comprises 5% of the market. The cheese market, in particular, is poised for growth as manufacturers explore opportunities beyond traditional markets, targeting regions like Japan, Russia, and expanding within India.
Distribution Channel: Dairy products in India are distributed through various channels, including organized retail formats such as supermarkets and hypermarkets, convenience stores, and traditional outlets. The organized retail sector is expanding, providing consumers with greater access to a diverse range of dairy products. Additionally, the rise of e-commerce platforms offers a convenient avenue for consumers to purchase dairy products, further diversifying distribution channels.
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India Dairy Products Market Regional Insights
Milk production in India is concentrated in several key states. Uttar Pradesh leads with the highest production, followed by Rajasthan, Madhya Pradesh, Andhra Pradesh, and Gujarat. These states benefit from favorable climatic conditions, robust dairy farming practices, and supportive government policies. The cooperative movement, exemplified by organizations like Amul in Gujarat, has played a pivotal role in enhancing milk production and ensuring fair remuneration for dairy farmers.
India Dairy Products Market Competitive Landscape
The Indian dairy products market is characterized by the presence of several key players, including:
Amul (Gujarat Cooperative Milk Marketing Federation - GCMMF): As the largest dairy cooperative in India and the ninth-largest globally, Amul has a significant market presence. The organization plans to introduce 40-60 value-added products over the next two years, aiming to ascend into the top three dairy players worldwide.
Mother Dairy: A subsidiary of the National Dairy Development Board (NDDB), Mother Dairy is a prominent player in the Indian dairy sector, offering a wide range of products and maintaining a strong distribution network across the country.
Heritage Foods: This company has demonstrated robust financial performance, with a two-fold increase in second-quarter profit to ₹486.3 million for the quarter ending September 30, 2024. This marks the seventh consecutive quarter of earnings growth, driven by heightened rural demand. Revenue from operations saw a 4% rise to ₹10.2 billion, while total expenses remained stable.
Danone: The multinational dairy giant is expanding its presence in India to compete with rivals Unilever and Nestlé. Despite previous challenges, Danone has announced a €20 million investment to expand its Punjab plant, aiming to capitalize on India's large population and growing dairy market. The company is reassessing its strategy to tap into the country's potential, acknowledging the importance of scaling up operations to maintain global relevance.
Nestlé India: A subsidiary of the global conglomerate Nestlé S.A., Nestlé India offers a diverse portfolio of dairy products, including milk, yogurt, and infant nutrition products. The company continues to invest in product innovation and expanding its distribution network to cater to the evolving needs of Indian consumers.
The Indian dairy market is also witnessing a surge in artisanal cheese production, with homegrown brands gaining popularity among consumers. This trend reflects a shift towards premiumization and diversification within the dairy sector, catering to evolving consumer preferences.
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Conclusion
The Indian dairy products market is poised for substantial growth, driven by increasing production, rising per capita consumption, and expanding export opportunities. Companies are investing in product diversification, infrastructure development, and strategic expansions to capitalize on this burgeoning market. As consumer preferences evolve and demand for value-added dairy products rises, the industry is set to witness dynamic transformations, offering lucrative prospects for stakeholders across the value chain.
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