Overview of milk processing industry in India

1. Dairy Processing In
India - Overview
Presented by
1. Sumit Kulkarni.
2. Achyut Dixit.
3. Vikas More.
4. Ravindra Munde.
5. Sayali Bhangre.

2. Content
1. Overview of the Sector
2. Regulatory Framework
3. No of Players in the Sector
4. Top 10 Companies
5. Growth of the Sector
6. Issues and Challenges
7. New Trends in Sector
8. Future of the Sector
9. Conclusions

3. Overview of the Sector
 Dairy In India
 Operation Flood
 Indian Dairy Market Overview
 Milk & Milk Product
 Organized vs. Unorganized Sector
 Operation Flood
 Dairy Sector Statistic

4. Dairy in India
 Dairy is Agro based industry.
 Largest producer of milk in the world (23%).
 Milk Production in FY 2013-14 :137.6 Million Tonnes
(NDDB)..
 Cow milk - 61.3 Million Tonnes (44.55%).
 Buffalo Milk – 76.2 Million Tonnes (55.45%).
 NBAGR registered 37 breeds of Cattle & 13 breeds of
Buffalo.
 Sector Size : $70 billion in 2015 (₹4,75,440 cr.)
Breed No
Cattle 61
Buffalo 19

5. Livestock Population in India by
Species
155.3
175.6 178.3
192.5
204.6
185.2
199
190.9
43.4
51.2 57.4
69.8
84.2
97.9
105 109
0
50
100
150
200
250
1951 1961 1972 1982 1992 2003 2007 2012
Years
LIVESTOCK POPULATION IN INDIA (Million)
Cattle Buffalo
Average Growth
Cow – 3.25%
Buffalo – 14.23%

6. Operation Flood
 World's largest agricultural development programme.
 Implemented in 1970 by NDDB.
 Milk-deficient country  Largest milk producer.
 In 30 years doubled milk available per person.
 Phase I : 1970–1980
 Phase II : 1981–1985
 Phase III : 1985–1996
Verghese Kurien
(26 November 1921 –
09 September 2012)
Father of White
Revolution

7. Processed Milk Products
Milk Products
Concentration
Khoa, Basundi, Rabri,
Khurchan, Malai
Evaporated Milk,
Sweetened
Condensed Milk
Coagulation Channa, Paneer
Cheese, White
cheese
Fermentation
Dahi, Payodhi, Misti
Dahi, Chakka,
Shrikhand wadi,
Lassi, Chaach.
Yoghurt
Phase
inversion of fat
Makkan, ,Malai, Ghee,
Kulfi, Malai ka baraf
Butter, Butter oil,
Ice cream

8. Organised vs. Unorganised
Milk Produced in
Villages
Milk
Consumed
in the
village
(48%)
Surplus Milk flowing into urban areas
(52%)
Handled by
unorganised
sector (70%)
Handled by
cooperative
sector (16%)
Handled by
Private
organised
sector (14%)
 The organized sector is growing
at nearly 10% in value tern per
year.
 65% of the milk is sold in
“loose” form.
 70% delivered to the homes by
‘milk agents’.
 Carton milk or packaged milk
has been growing at 24%
annually.

9. Milk Production Across Countries
20.8
31.56
53.68
68.36
79.66
95.62
117
53.07
58.24
67.01
69.86
76.02
80.25
87.46
1.96
2.93
7.04
10.19
12.37
32.02
41.14
7.42 12.06
15.08 19.2
20.53 25.53
31.82
0
20
40
60
80
100
120
140
1970 1980 1990 1996 2000 2005 2010
MillionTons
Years
MILK PRODUCTION ACROSS COUNTRIES
India USA China Brazil Linear (India)
Source : NDDB

10. Milk Production In India
17 20 23.2
31.6
44
55.7
69.1
84.4
102.6
121.8 127.9 132.4 137.6
130 126
110
128
160
178
202
225
251
281
290 298 302
0
50
100
150
200
250
300
350
0
20
40
60
80
100
120
140
160
1951 1961 1971 1981 1986 1991 1996 2001 2006 2011 2012 2013 2014
MillionTonnes
gms/day
Years
MILK PRODUCTION IN INDIA
Production (Million Tonnes) Per Capita Availibilty (gms/day)
Source : NDDB

11. Milk Production by State (MT)
13857
17356
19537
21031
22556
23330
7455
8713
11931
13234
13512
13946
5521
7624
9570
11203
12088
12762
5312
6960
8386
9321
9817
10315
7777
8909
9387
9423
9551
9714
4761
6283
6855
7514
8149
8838
5849
6769
7455
8044
8469
8734
4850
5299
5745
6267
6661
7040
4910
5474
6651
6831
6968
7005
2489
5060
5934
6517
6643
6845
0
5000
10000
15000
20000
25000
2000-01 2005-06 2008-09 2010-11 2011-12 2012-13
Uttar Pradesh Rajasthan Andhra Pradesh Gujarat
Punjab Madhya Pradesh Maharashtra Haryana
Tamil Nadu Bihar Linear (Maharashtra)
Source : NDDB

12. Per Capita Availability of Milk by State
722
823
892
957 937 945
586 617 645 624
679
720
275 322 376
449
538 539
313 316 341
393
446 447
236
289 317
372
435 445
136 161 172 181 197 206
0
200
400
600
800
1000
1200
1991-92 1996-97 2001-02 2006-07 2010-11 2011-12
PER CAPITA AVAILABILITY OF MILK BY STATES (GMS/DAY)
Punjab Haryana Rajasthan
Himachal Pradesh Gujarat Maharashtra
Linear (Maharashtra)
Source : NDDB

13. Indian Diary Consumption By Product
Type
butter
3% ghee
8%
milk powder
8%
ice cream
4%
liquid milk
73%
paneer
1%
cheese
1%
flavoured milk
1%
curd
1%
Indian Dairy Consumption By Product Type
butter ghee milk powder ice cream liquid milk
paneer cheese flavoured milk curd

14. Regulatory Framework

15. Regulatory Framework
 Agriculture which include Dairy is State policy in India.
 No Government regulatory body for Dairy Sector.
 Centre cannot enforce policies on of State Govt.
 Department of Livestock is with Ministry of Agriculture.
 Dairy sector was de-licensed in 1991.
 Milk and Milk Product Order 1992.
 Collection areas/ milk sheds specified.
 Processing Capacity Fixed.

16. Laws Governing The Sector
 Up to 1991
 Prevention of Food Adulteration Act, 1954. ( legislation for food
safety)
 The PFA had been in place for over five decades.
 2006 to 2011
 Food Safety and Standards Act, 2006 (FSSA).
 It repealed eight laws which were in operation before.

17. Laws Governing The Sector
1. The Prevention of Food Adulteration Act, 1954.
2. The Fruit Products Order, 1955.
3. The Meat Food Products Order, 1973.
4. The Vegetable Oil Products (Control) Order, 1947.
5. The Edible Oils Packaging (Regulation) Order, 1998.
6. The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control)
Order, 1967.
7. The Milk and Milk Products Order, 1992.
8. Essential Commodities Act, 1955 (in relation to food).

18. Laws Governing The Sector
 2011 onwards
 New national regulatory body, the Food Safety and Standards
Authority of India (FSSAI).
 Applicable from 5 August, 2011.
 Key Regulations of FSSAI.
A. Packaging and Labelling.
B. Signage and Customer Notices.
C. Licensing Registration and Health And Sanitary Permits.

19. Government Initiatives
NATIONAL DAIRY PLAN
 Include 14 major states (witch cover 90%).
 Aims to increase milk production to 180 million by 2021-22.
 Enhancing, strengthening and expanding infrastructure for
production process.
 This plans to bring 65% of the surplus milk produced under the
organised sector.

20. Government Initiatives
DAIRY VENTURE CAPITAL FUND SCHEME
 Entrepreneur has to contribute 10% seed amount and
arrange 40% loan from local bank.
 Government of India provide 50% interest free loan
 New semen station – 25% of project expenditure.
 Procurement system – 50% of cost of capital.

21. No. of Players in the Sector

22. Leading Brands Of Dairy Products
Brand Company / Organisation Active in Region
Amul Gujarat Cooperative Milk Marketing
Federation Ltd.
All India
Mother Dairy Mother Dairy Fruit & Vegetable Ltd. Delhi, North India,
East India
Nestle Nestle India Ltd. All India
Britannia Milkman Britannia New Zealand Food Pvt. Ltd. All India
Nandini Karnataka Cooperative Milk Producers
Federation Ltd
Karnataka
Aavin Tamil Nadu Cooperative Milk Producers
Federation Ltd
Tamil Nadu
Aarey Dairy Development Department,
Maharashtra State
Mumbai

23. Leading Brands Of Dairy Products
Brand Company / Organisation Active Mainly in Region
Mahanand Maharashtra Rajya Sahakari Dudh Mahasangh
Maryadit
Maharashtra
Vijaya Andhra Pradesh Dairy Development
Cooperative Federation Ltd
Andhra Pradesh
Saras Rajasthan Co-operative Dairy Federation Ltd Rajasthan
Milma Kerala Cooperative Milk Marketing Federation
Ltd
Kerala
Arokya Hatsun Agro Products Ltd Tamil Nadu
Metro Dairy Metro Dairy Ltd West Bengal

24. Leading Brands Of Dairy Products
Brand Company / Organisation Active Mainly in Region
Verka Punjab State Cooperative Milk
Producers Federation Ltd
Punjab & Chandigarh
Heritage Heritage Foods (India) Ltd South India
Paras VRS Foods Ltd Delhi
DMS Delhi Milk Scheme Delhi
Omfed Orissa State Cooperative Milk Producers
Federation
Ltd
Orissa
Sanchi Madhya Pradesh Dugdha Mahasangh
(Sahakari) Maryadit
Madhya Pradesh

25. Top 10 Companies
Sr.
No
Brands Founded In Revenue
1 Amul 1946 US $ 3.42 Billion (2014–15)
2 Mother Dairy 1974 US $ 1.04 Billion (2014–15)
3 (KMF) 1982 US $ 1.46 Billion (2014–15)
4 Kwality Limited 1992 US $ 0.77 Billion (2014–15)
5 AAVIN 1958 US $ 0.66 Billion (2013–14)
6 MILMA 1980 US $ 0.30 Billion (2013–14)
7 OMFED 1985 US $ 0.09 Billion (2013-14)
8 DUDHSAGAR DAIRY 1963 US $ 0.62 Billion (2013-14)
9 AP DAIRY 1960 US $ 0.04 Billion (2013-14)
10 SCHREIBER DYNAMIX DAIRY 1995 NA
Source : http://listz.in/top-10-dairy-companies-in-india.html

26. Growth Of The Sector

27. Growth Of The Sector
 Size of Indian dairy industry : $70 Billion in 2015.
 It is expected to grow to double by 2020 to $140 Billion.
 Indian dairy is growing at CAGR of 11-15%
 Value added products alone growing at 24%.
 It contribute 22% of Agricultural GDP.
 Operating margin in value added product is twice of liquid milk
business.

28. Share Of Agriculture And Livestock
Sector In GDP (Crore)
Year GDP (Total)
GDP (Agriculture) GDP (Livestock Sector)
Rs.Crore % Share Rs.Crore % Share
2004-05 29,71,464 4k76,634 16.04 1,19,333 4.02
2005-06 33,90,503 5,36,822 15.83 1,27,518 3.76
2006-07 39,53,276 6,04,672 15.30 1,42,695 3.61
2007-08 45,82,086 7,16,276 15.63 1,69,296 3.69
2008-09 53,03,567 8,06,646 15.21 2,00,440 3.78
2009-10 61,08,903 9,28,586 15.20 2,37,059 3.88
2010-11 72,66,966 11,32,048 15.58 2,76,105 3.80
2011-12 83,53,495 12,68,081 15.18 3,27,838 3.92
2012-13 93,88,876 14,17,468 15.10 3,86,246 4.1
Source : NDDB

29. Growth Drivers of Dairy Industry
 India’s Population - 1.252 billion
 Population Growth – 2.1% annual
 GDP - 1.877 trillion USD (2013)
 GDP Growth - 5.0% annual
 Rapid Urbanization (31.16%)
 Raising Income Level
 Per Capita Income - ₹ 3,63,425
(2013)
 Fast changing food habits.
Source : Wikipedia

30. Export of Dairy Products
213.56
305.48
222.48
62.26
132.42
258.3
109.87
255.85
320.63
243.93
0
50
100
150
200
250
300
350
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
Bangladesh UAE Pakistan Nepal Bhutan Philippines Singapore Morocco Oman Yemen
Repubic
EXPORTS FROM INDIA OF DAIRY PRODUCTS 2014-15
Qty (MT) Valuev (Lakhs) Rate
Source : APEDA

31. Product wise Share in Export
50.94
17.47
6.71
4.82
4.28 4.01
3.32
2.26 1.08 5.09
Skimmed Milk In Powder
Melted Butter (Ghee)
Butter
Other Milk Powder
Other Cheese
Milk And Cream Of 1%<Fat<6%
Fresh Cheese
Processed Cheese
Whole Milk (Fat>1.5%)
Other
Source : APEDA

32. Issues and Challenges

33. Issues and Challenges
 The quality of animals is critical in determining its milk productivity.
 987 kg/lactation vs. Global average of 2 038 kg/lactation.
 Ineffective cattle and buffalo breeding programmes.
 Quality does not match International Standards.
 Lack of proper infrastructure facilities.
 Adulteration in milk.
 Middleman earn most of the profit.
 No proper maintenance of records.

34. New Trends

35. New Trends
 Increasing demand for Organic Milk and Milk Products.
 UHT Milk.
 A2 Milk.
 Hydroponics fodder preparation.
 Modern Mechanisation of Dairy Farm.
 Loose Housing System (Mukta Gotha).

36. Future

37. Future of the Sector
 Total milk production in India may touch 216 Million Tons by 2030.
 Per capita availability of around 390 gm/day by 2030.
 Packaged milk would grow to $32.9 billion by 2030.
 73% milk sold by 2030 would be branded, against 31 % at present.
 70% of the milk will be procured by Organized Sector by 2020.
 Upcoming International Player :-
 Coke, Pepsi, Alra Foods, Fonterra with Britannia and many more.

38. Conclusion
 India's Dairy Industry will remain on its growth path at least till
2020
1. Financial growth of existing domestic player.
2. Diversification of dairy sector by other companies.
3. Surge in private sector equity deal.
4. Entry of foreign firm in the segment.