An Analysis onDairy Industry

Introduction• India has the credit of being the largest producer as well as the biggest consumer of

milk in the world.

• Also has the world’s largest dairy herd (comprised of cows and buffalos).

• India’s milk production accounts for 17% of total global output.

• In 2010-11, livestock generated output worth INR 2,075 billion which comprised

4% of the GDP and 26% of the agricultural GDP.

• In the past 20 years, milk production in India has doubled and has reached the

140.6 million tones a year in 2014 thus becoming India’s No.1 farm commodity.

Introduction (Contd.)

• The current market size of the dairy industry is INR 2.6 trillion and is estimated to

grow up to INR 3.7 trillion by 2015.

• As per the latest statistics of National Dairy Development Board (NDDB), the dairy

cooperative network in the country includes 177 milk unions covering 346 districts

and over 1, 33,000 village-level societies with a total membership of nearly 14

million farmers.

Source: http://www.indianmirror.com/indian-industries/dairy.html

Milk Production in IndiaYear Production(million tones) Per capita availability(gms/day)

1991-92 55.7 178

2000-01 80.6 220

2004-05 92.5 233

2009-10 116.4 273

2010-11 121.8 281

2011-12 127.9 290

2012-13 132.4 NA

Source: http://www.nddb.com

Livestock Population in India by Species(in million)

Milk- product mix

Indian Dairy industry comprises of barely 12% of Organized sector and the lions share is hold by the

Unorganized sector with 88%

Source: http://www.dairyuniverseindia.com/Marketdate.html

Indian Dairy industry

(organized)

Private dairies

(national)

Private Dairies

(international)

Cooperative societies

Government

Fluid milk 46%

Ghee 27.5%

Butter 6.5%

Curd 7.0%

Khoa (Partially dehydrated condensed milk) 6.5%

Milk powders including IMF 3.5%

Paneer & Chhana (cottage cheese) 2.0%

Others including cream, ice cream 1.0%

Amul

ADF Food

Nestle

Brittania

Kraft foods

Le Bon

Dynamix dairy industry ltd

Heritage foods

Hatson Agro Ltd

Mother Dairy food

Mahaan foods

Parag foods

Vadilal

VRS foods

Vidya Dairy

ExportsIndia's Export of Dairy products was 1,59,228.52 MT to the world for the worth of Rs. 3,318.53 crores during the year 2013-14.

Major Export Destinations (2013-14)

Bangladesh

Egypt

Arab Republic,

United Arab Emirates,

Algeria,

Yemen Republc and

Pakistan. Source: APEDA Website

Source: http://apeda.gov.in/apedawebsite/SubHead_Products/Dairy_Products.htm

Exports (contd.)

Source: APEDA Website

Major products being exported are:

Butter fresh

Butter Oil

Butter milk

Milk & Cream in Powder

Other fat

Ghee

Fresh Cheese

Milk for Babies

Skimmed milk powder

Whole milk

Milk production is growing at 3.3% while consumption is growing at 5% leaving a gap between demand and supply.

In order to meet the rapid growing demand and to increase the milk production, Union Govt has started a central scheme National Dairy Plan – Phase 1, for a period of 2011-12 to 2016 – 17.

This scheme will be implemented with a total investment of about INR 2242 crore.

This scheme main objective is to help provide rural milk producers with greater access to the organized milk –processing sector and thus to bridge the gap between the demand and supply of milk in the country.

DEDS through NABARD to encourage the Unorganized sector for generating self employment

Source: http//www.nddb.org

National Dairy Plan

Scientifically planned program to increase bovine productivity and milk production.

The other objectives are:

•Making the organized milk market accessible to rural milk producers

•Enhance breeding, feeding and milk procurement

National Dairy Plan (contd.)

This focuses mainly on:

• Production of high genetic merit bulls.

• Semen Production.• Pilot model for Viable Doorstep A1 delivery service.• Fodder development.• ICT for MIS.• Ration Balancing program.• Village based milk procurement system.• Learning and evaluation.

Technological advancements

• Indigenous breed development.

• Frozen semen production and A1 delivery.

• Information network for Animal productivity and Health.

• Green fodder production and enhancement.

• Animal vaccines and Diagnosis.

• Solid station fermentation technology.

• Product and process development and innovations.

Threat of New Entrants: MEDIUM

• New entrants are encouraged and assisted by various schemes by Government.

• Requires high capital investment and difficult to achieve economies of scale.

• Access to very complex and well established distribution channel.

• Customer Loyalty.

Bargaining Power of Buyers: HIGH

Presence of multiple competitors as well as local

Doodhwaalas.

Home delivery and freshness of local dairy products form

local Doodhwaalas make this more complex.

Bargaining Power of Suppliers: LOW

Mainly the suppliers are rural milk producers and thus their

bargaining power is low

Threat of substitutes: LOW

Although many substitutes in drinking arena when compared

with milk are available, the dairy industry enjoys high

profitability in case of other dairy products.

Rivalry among competitors: HIGH

Large number of competitors

Local Doodhwaalas

Thank You