The Indian Dairy Industry

The Indian Dairy Industry

Opportunities and Challenges, 2017

RELEASE DATE
15-Jun-2017
REGION
South Asia, Middle East & North Africa
Research Code: 9AB8-00-1D-00-00
SKU: FA00504-GL-MR_20277

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Description

Of the Indian Dairy Industry, 80% remains unorganized even today, indicating the potential that can be tapped by Dairy Companies. Valued at INR 5,000 billion in 2016, 60% of the market comprises liquid and powdered milk, while value added products such as butter, ghee and curd comprise the remainder. Highly premiumized products such as branded yogurt, probiotic dahi, specialty cheeses etc., account for only 5% of the revenue; they nevertheless, hold the maximum margin potential for dairy industry companies and tend to be the focal point for private MNCs like Nestle and Danone.

This industry docket provides a bird’s eye view of the dairy industry in 2016 and re-segments the market to gain strategic insights with respect to growth opportunities in the market. The docket further includes market projections, key trends, drivers and restraints. The docket also delves into the major challenges faced by current competitors and what typical steps are taken to overcome them

Key questions this Docket looks at:

•     How big is the dairy market in India?
•     What is the current level of organization in the market?
•     Who are the major organized players in this market?
•     What does the industry ecosystem look like?
•     What are the roles of various stakeholders?
•     What are the key challenges plaguing the dairy industry currently and what are the major players doing to overcome these?
•     Where do the growth opportunities for suppliers lie?

Table of Contents

Scope & Limitations

An INR 5,000 Bn Market of which 80% is still Unorganized; however, Opportunities abound in both organized and unorganized segments

Re-segmenting the market provides a strategic view of growth opportunities

Wellness and premium products are a key focus area for private dairies… despite being only 5% of the market

Two pronged strategy logical: Rural penetration in basic products; Category expansion in premium products for indulgent customers

Basic Product Opportunities: Ice cream and Paneer most lucrative individual products due to ease of entry and market growth

Basic Product Opportunities: Rural Penetration will require new strategies / business models for success… boom has just started

Wellness and Premium Opportunities:

Wellness and Premium Opportunities are better suited to new entrants, especially as short-term focus

Wellness and Premium Opportunities: Top 5 reasons to Invest indicate its potential

Value-added Products market growing 1.5 times faster than the milk market

Consumer preference for convenient, healthy yet indulgent products to see increased adoption of value-added premium products

Growth will be driven by Value-added products… however, milk to continue to dominate as the largest category in the sector

Inthe organized sector, state cooperatives dominate packaged milk, while private dairies focus on UHT and powdered milk

Major dairy competitors have consistently grown well above the industry growth rate; should continue so in the near and medium terms

Margin pressures are driving competitors to improve volumes… Recombined milk and rural penetration are top two focus areas

Organized market: Coops* dominate mass market ghee, butter, curd, ice-creams variants; private dairies firmly fixed on premium variants of these

Growing adoption of niche, premium products among urban consumers to drive value-added products category

Opportunity focus in both rural and urban markets driven by increasing margin pressures for processors

Key Challenges in Dairy: Complexity and related indirect costs of milk procurement are a major pain point for most competitors

Challenges faced by Dairy in:

Key Challenges in Dairy:

Key Challenges in Dairy:

Key Challenges in Dairy:

Key Challenges in Dairy:

Maximize opportunities from existing products and markets; systematically explore new products, markets, including inorganic Opportunities

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Related Research
Of the Indian Dairy Industry, 80% remains unorganized even today, indicating the potential that can be tapped by Dairy Companies. Valued at INR 5,000 billion in 2016, 60% of the market comprises liquid and powdered milk, while value added products such as butter, ghee and curd comprise the remainder. Highly premiumized products such as branded yogurt, probiotic dahi, specialty cheeses etc., account for only 5% of the revenue; they nevertheless, hold the maximum margin potential for dairy industry companies and tend to be the focal point for private MNCs like Nestle and Danone. This industry docket provides a bird’s eye view of the dairy industry in 2016 and re-segments the market to gain strategic insights with respect to growth opportunities in the market. The docket further includes market projections, key trends, drivers and restraints. The docket also delves into the major challenges faced by current competitors and what typical steps are taken to overcome them Key questions this Docket looks at: • How big is the dairy market in India? • What is the current level of organization in the market? • Who are the major organized players in this market? • What does the industry ecosystem look like? • What are the roles of various stakeholders? • What are the key challenges plaguing the dairy industry currently and what are the major players doing to overcome these? • Where do the growth opportunities for suppliers lie?
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Lightbox Content Investment Opportunities in India|More growth opportunities|https://store.frost.com/investment-opportunities-in-india.html
Author Govind Ramakrishnan
Industries Agriculture and Nutrition
WIP Number 9AB8-00-1D-00-00
Is Prebook No