Milk industry has been Doing Some Frenetic Activities…
E-commerce isn’t the only sector that has been doing all the actions. Milk industry has been equally doing some frenetic activities since past few years. In fact, Indian corporate biggies, including multinationals have dived into the dairy industry while inspiring more start-ups. Each year almost 1000 new dairy products are being launched. Meanwhile, fundraising is also taking place through private equity funding and equity markets.
Within a short span of time, India has become the largest milk-producing nation of the world. And it is expected that the production will be triple in the next ten years. Additionally, the country being, the lowest cost producer of milk per liter, the multinationals are planning to extend their activities here. Not only India is the largest producer, but also the biggest milk consumer worldwide. To go by the reports, in 2010-11, Indian livestock generated an output of INR 2,075 billion, including 4% of the GDP as well as 26% of agricultural GDP.
Considering the contribution India is making both locally and globally to the milk sector, the 12th Five Year Plan of Planning Commission of India has laid a budget of INR 31,560 crore for the animal husbandry and dairy sector to help them reach a growth rate of 6%. As for the present market size of the milk industry, it is INR 2.6 trillion that is estimated to grow INR 3.7 trillion.
Rising Dairy Markets
• Food service institutional market is developing at double rate than that of the consumer market.
• Defense market is a growing market for high-quality products offered at affordable prices.
• A boom is expected in the ingredients market of milk products that used as raw materials.
• Parlor market has brought a revolution in the dairy sector. It has opened new prospects for ready-to-serve dairy items.
Aside, India’s export potential is extremely high because of the location, low cost of production, quality, and productivity. Similarly, there is a vast market for export of some traditional milk products including shrikhand, ghee, and rasgolas. Here’s SWOT analysis done to give a clear picture of the Indian dairy sector;
SWOT Analysis of Indian Dairy Industry
Strength
• High in demand
• Margins are reasonable
• Tremendous flexibility of product mixture
• Ample availability of raw material
• Highly skilled technical manpower
Weaknesses
• Little control over milk yield
• Lack of proper distribution channel
• Though the dairy products are perishable, this is partially dealt of by pasteurization.
With global diary giants eyeing on India as a profitable investment destination, these weaknesses can be easily overcome. However, the sector is all set to witness some power-packed action with multiple players playing in the scene.
