Indian Dairy Industry Analysis

Indian dairy industry is the world’s largest dairy industry with a share of 16% of the world’s total milk production. India is also one of the world’s largest consumers of dairy products. It also forms an important source of income for Indian rural farmers and plays an important role in improving their quality of life, but still remains a highly unorganized sector at large. Only 18- 20% of the total milk produced in India is directed through the organized sector.

Despite being an important contributor to the growth of Indian Economy, the dairy Industry is still not very well developed and follows many primitive practices. It is plagued by problems such as fodder shortage, poor transportation facilities, and lack of well-developed cold storage

Dairy is one of the most innovative sectors of food industry in the developed countries. More and more products are developed to add value to the market saturated with the consumption of milk. There is need for Indian Dairy Industry for a paradigm shift to adopt the best proven practices of these developed dairy industries to launch new and innovative products in the Indian Market.

The Indian dairy industry mainly faces challenges in sourcing and logistics. For any player in this industry, procurement of milk is the most critical step. But it is not possible to transport or procure milk beyond a radius of 171 – 200 km. Shortage of efficient storage and refrigerated transport system also leads to high amount of wastage.

India’s dairy industry is very traditional and mostly unorganized in nature. It is mainly run on low input – low output system where most of the players in milk production are small holders (almost 80% of milk comes from individual producers owning five or less cattle)

The Industry consists of twenty two state milk federations, around one lakh dairy cooperatives, and few private players like Amul, Britannia, and

The chain starts from inputs like fodder, animal feed to the cattle. Animals are mulched and milk is collected from the farmers on a daily basis. The milk is then sent to cooperative societies, private players etc. Before sending for processing, chilling is required and there is standardization of milk which is based on the final product to be made. This is then followed by processing cooling of milk, various processes like churning, heat – drying, emulsification etc. takes place. Then the labelling and packaging is done and stored in warehouses after which the product is directed for transportation and distribution to retailers, supermarkets and