Dairy market in India is poised to grow at a tremendous rate as the domestic market is witnessing strong increase in demand. New innovative packaging, development of new products is targeted at the retail customers so as to increase volume and penetration. The market which is predominantly controlled by the unorganized sector is witnessing large number of foreign players entering the Indian market including MNCs. Government thrust has gone a long way to develop the dairy sector. However, problems like non availability of fodder and low yield of cattle also persists. The report provides a brief introduction to the processed food industry. The value chain of a typical food processing company has also been covered. The market overview includes information regarding the production and growth of liquid milk. It also draws a comparison of the production in the Indian market to that of the global market. Furthermore, it also highlights the major milk producing states in India, segmentation and usage of milk. Additionally, the break-up of the dairy processing sector is also provided along with the market size and expected growth rate of the dairy processing sector including its value chain. Porter analysis helps towards understanding the dairy sector. The import-export section provides data for the change in milk imports and exports as well as the top countries from where milk is exported/ imported. Information regarding processed dairy segment is also provided. Major barriers identified include unavailability of fodder and exponential price rise of the same; as a result of which profit margins have been squeezed. Low yield from cattle compounds the problem. Add to it the price increase of milk in the domestic market which might affect the retail consumption of milk and push the prices of dairy products to a higher level. The trends identified are increase in per capita availability of milk due to several key steps taken by the government. Various foreign and Indian companies are waiting to enter the lucrative Indian market which is characterized by high growth rate. Furthermore, UHT milk has caught the fancy of the Indian customers as it is safer and has prolonged shelf life. In order to cater to the retail customer, companies are launching smaller packages providing products over a wide price spectrum The government initiative highlights major policies undertaken by the government to develop this sector. Vision 2030 gives a guideline on the development of the sector so that it can meet the increasing domestic demand. It also highlights various steps taken by the government to boost the sector through various initiatives as well as regulations pertaining to the dairy market. The competition section covers the major players in the industry and provides a brief overview as well as the key financial data. It also provides a product matrix where the entire product portfolio of the companies with respect to the dairy market is given along with a com

1. Dairy Market – India
Dairy Market India
October 2011

2. Executive Summary
Market  Dairy market is growing at a rate of a %
Overview  Dairy processing sector to assume more importance in the coming days
 Unorganized sector has B % market share
Import‐  Imports have increased marginally over the years
 Exports have shown a fluctuating trend
Export
 Increase in fodder prices
Major  Low yield of cattle
Barriers  Increasing milk prices
 Increase in per capita availability of milk
 New Entrants
New Entrants
Trends  Growth of UHT Milk
 Packs of varying size
 Intensive Dairy Development Program
Government
 Clean Milk Production
Clean Milk Production
Initiatives  Dairy Venture Capital Fund
 Vision 2030
Major Players in the Market
Competition
Player 1 Player 2 Player 3 Player 4
DAIRY MARKET IN INDIA 2011.PPT 2

3. •Introduction
•Market Overview
•Market Overview
•Import & Export
•Major Barriers
•Trends
•Government Initiatives
•Competition
•Opportunities
•Appendix
DAIRY MARKET IN INDIA 2011.PPT 3

4. Food processing industry in India has huge untapped
potential and offers scope for large investments
Introduction Food processing: Growth
• The food processing industry is valued at INR A2 and
X% A4
is expected to witness a CAGR of b% in the period 5,000
A3
20‐‐‐20‐‐E 4,000 A1 A2
3,000
• India is one of the top producers of milk, pulses,
2,000
sugarcane and tea in the world
1,000
1 000
• Government has taken major initiatives towards 0
20-- 20-- 20--e 20--e
ensuring multi‐fold growth in this sector that has an
investment opportunity of about INR A by 20‐‐ Sector wise food processing
• Mega Food Parks are coming up in India to integrate x1% of the milk produced is used
the supply chain and promote food processing for processing
Dairy C1%
• States like Andhra Pradesh Uttar Pradesh and
States like Andhra Pradesh, Uttar Pradesh and
Madhya Pradesh are highly attractive for food
processing industry
Others C2%
20--
DAIRY MARKET IN INDIA 2011.PPT 4

5. Dairy Market in India needs to grow at a faster rate to catch
up with the demand
Overview – Dairy Market (1/3) Production : ABC
• India produces maximum amount of dairy items in
the world 150 x
B C D
A
• Of the total milk produced in India, B % of the milk 100
comes from the buffaloes
50
• As of Jan 20‐‐, the Indian dairy industry is
approximately INR Q bn
pp y
0
• J % of the milk sold is in loose form 20----- 20----- 20----- 20-----
• Only H % of the milk sold is trough retail chains
• Since the consumption is on a growing trend so many Global Production Scenario (20‐‐)
foreign companies are coming to India with a variety
of dairy products
India a
 Some of theses companies are taking bottom of the
pyramid approach to reach out to the masses by
developing flexibility in their pricing
d Rest of Asia
• Milk is the only crop where the farmer realizes T % of Global b
consumer price ‐ against T2 % or so in fruits and India c
vegetables
20--
DAIRY MARKET IN INDIA 2011.PPT 5

6. In‐spite of India being the largest milk producer exports are
not picking up due to various internal factors
Dairy Market‐Exports Exports ‐Value
• New markets from South East Asia, far east, north
Africa re opening up for the Indian exporters B
1.000
• However, In Feb 20‐‐, the government had imposed a
ban on the export of milk powder so as to control
inflation and bring prices under control 500
A D
• Exports have reduced in the recent years as the C
domestic market is absorbing the produce in India
domestic market is absorbing the produce in India 0
itself 20----- 20----- 20----- 20-----
Exports Country‐wise (20‐‐‐‐‐) Exports Country‐wise (20‐‐‐‐‐)
d c Country 1
c
18% Country A e Country 2
Country B
38% f b Country 3
Country C
y
d Country
Co ntr 4
e Country D
b Country 5
f
Country E
Others
a 12% Others
a
9%
DAIRY MARKET IN INDIA 2011.PPT 6

7. Major Barriers – Summary
Rise in fodder prices
Major
Barriers
Increase in prices
Increase in prices Low yield of cattle
Low yield of cattle
DAIRY MARKET IN INDIA 2011.PPT 7

8. Trends – Summary
Increase in per capita
Packs of varying sizes
availability of milk
Key
Trends
Growth of UHT milk New entrants
DAIRY MARKET IN INDIA 2011.PPT 8

9. Government has placed major emphasis in the development
of the dairy market through a host of benefits
Government Initiative
The government has put a lot of emphasis on developing the sector by announcing a set of incentives and
subsidies for the companies engaged in the manufacturing of milk and other dairy products
Initiative Analyst View
De‐licensing of the Indian dairy The Indian dairy sector was growing at a tremendous rate. Private
industry investments and foreign equity participation was allowed so as to bridge
the huge gap between demand and supply.
Foreign equity participation to the Ever since there has been lot of investments and new brands are coming
tune of a % is allowed in the Indian in the processed milk sector.
dairy processing sector
De‐reservation of many segments
y g De‐reservation of ice‐cream and ghee saw the entry of MNCs into these
g y
like ice‐cream and ghee segments making them more competitive and giving customers a lot to
choose from
No Excise duty on dairy machinery In order to promote dairy processing sector, excise duty of c % has been
fully exempted, thus reducing the capital cost by d %
fully exempted thus reducing the capital cost by d %
DAIRY MARKET IN INDIA 2011.PPT 9

10. Major Players (x/ y)
Company Snapshot: Company 1
Corporate Information Financial Performance
Headquarters Place 1
Place 1 Revenue
Net Income
Founded 19‐‐ 0.6 R4 0.20
R3 0.15
0.4 R2
Products Product 1, Product 2 R1 0.10
0.2
0.05
Key People ABC, XYZ 0.0 0.00
20-- 20-- 20-- 20--
Business Highlights
Business Highlights
• The company, formerly known as ABC
• The production of dairy milk & milk products during the year was x1 KL as against x2 KL in the previous year
representing a growth of k %
• The sale of fresh cream and ice‐cream mix recorded volume growth of over W %
• The company gave dividend of INR R per share on the Equity Shares of INR R1 each for the year ended 20‐‐, as
compared to INR J per share in the previous year
• The Dairy Division of the company is focused on continuously on leveraging the G brand and offering different value
y p y y g g g
added milk products to achieve higher profitability
DAIRY MARKET IN INDIA 2011.PPT 10

11. Thank you for the attention
The Dairy Market‐ India report is part of Food & Beverages Industry Series.
For more detailed information or customized research requirements please contact:
Gaurav Kumar Gagan Uppal
l
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DAIRY MARKET IN INDIA 2011.PPT 11