India's Dairy Products Market Poised for Significant Growth by 2027
The Indian dairy products market Size is on a robust growth trajectory, with projections indicating it will reach approximately USD 1216.57 million by 2027, expanding at a Compound Annual Growth Rate (CAGR) of 7.13% during the forecast period from 2022 to 2027.
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Market Definition and Estimation
Dairy products encompass a wide range of consumables derived from milk, including but not limited to milk, cheese, butter, yogurt, and ghee. These products are integral to the Indian diet, providing essential nutrients and serving as staples in daily consumption. The market estimation underscores the sector's vitality, with expectations to attain a valuation of USD 1216.57 million by 2027, reflecting a CAGR of 7.13% over the forecasted period.
Growth Drivers and Opportunities
Several factors are propelling the growth of India's dairy products market:
Rising Milk Production: India has maintained its position as the world's largest milk producer since 1998, boasting the largest bovine population globally. Milk production witnessed a substantial increase from 17 million tonnes in 1950-51 to 176.4 million tonnes in 2017-18, further escalating to 187.7 million tonnes in 2018-19, marking a 6.65% growth.
Increased Per Capita Consumption: The per capita availability of milk has surged 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. This rise indicates a growing domestic demand and consumption of dairy products.
Economic Empowerment in Rural Areas: Dairying has emerged as a crucial secondary source of income for millions of rural households, particularly benefiting marginal farmers and women. The cooperative milk unions collectively procured an average of 507.69 lakh kilograms of milk per day in 2018-19, a 7% increase from the previous year, highlighting the sector's role in rural economic development.
Export Potential: Despite being a leading milk producer, India's share in the global dairy trade remains modest. However, there is a burgeoning opportunity to expand exports, especially for products like Skimmed Milk Powder, butter, cheese, and ghee. Key export destinations include Turkey, UAE, Egypt, Bangladesh, Bhutan, the US, Saudi Arabia, and Malaysia.
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Segmentation Analysis
The Indian dairy products market is segmented based on product types and distribution channels:
By Product Type:
- Milk: The cornerstone of the dairy industry, with a significant share in both production and consumption.
- Ghee and Butter: Traditional staples in Indian households, used extensively in cooking and culinary applications.
- Cheese: Experiencing rapid growth, with an increasing appetite for diverse cheese varieties among consumers.
- Yogurt and Buttermilk: Fermented dairy products gaining popularity due to their probiotic benefits and refreshing qualities.
- Skimmed Milk Powder (SMP): A key export product with a substantial share in international trade.
By Distribution Channel:
- Retail Channels: Supermarkets, hypermarkets, and convenience stores offering a wide array of dairy products to consumers.
- Institutional Sales: Supplying dairy products to hotels, restaurants, cafes, and other food service establishments.
- Online Platforms: E-commerce channels witnessing growth, providing consumers with the convenience of doorstep delivery.
Country-Level Analysis
While the focus is on the Indian market, it's pertinent to consider the global context, particularly in countries like the USA and Germany:
United States: The US dairy market is well-established, with a high per capita consumption of dairy products. However, there is a growing trend towards plant-based alternatives, which could influence global dairy trade dynamics.
Germany: As one of Europe's largest dairy producers, Germany has a mature market with a strong emphasis on cheese and yogurt. The country is also witnessing a shift towards organic and lactose-free dairy products, reflecting changing consumer preferences.
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Competitive Analysis
The Indian dairy market is characterized by a mix of cooperative organizations, private companies, and multinational corporations:
Amul (Gujarat Cooperative Milk Marketing Federation): A dominant player with a vast product portfolio and extensive distribution network, Amul has been instrumental in shaping India's dairy landscape.
Mother Dairy: Known for its wide range of milk and milk-based products, Mother Dairy has a strong presence, particularly in urban markets.
Nestlé India: A subsidiary of the global conglomerate, Nestlé offers a variety of dairy products, including milk, yogurt, and infant nutrition products, leveraging its international expertise.
Danone: The French multinational has announced plans to expand its footprint in India, aiming to bridge the gap with competitors like Unilever and Nestlé. In October 2024, Danone unveiled a four-year €20 million investment to enhance its existing plant in Punjab, signaling a strategic move to capitalize on India's burgeoning dairy market.
Britannia Industries: Primarily known for its bakery products, Britannia has diversified into the dairy segment, offering cheese, butter, and milk-based beverages, and continues to expand its dairy portfolio.
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