The milk sector in India will see cart loads of dollars in the near future as investments worth $2 billion are planned at the top end of the supply chain by the year 2020. Growth prospects are very positive due to the growth of added value dairy products. This is a sign of a maturing market which, it must be remembered, is immense (there are a good 1.25 billion inhabitants in India alone, without considering the influence India has on the Indian subcontinent).
Areas of investment
Investments will first and foremost be focused on developing a better quality raw milk supply infrastructure. This will encourage the creation of collection and refrigeration centres, particularly in small towns, resulting in greater product supply control as there will be direct contact with producers. This in turn will contribute to changing the geography of the country’s production. One need only consider that today cooperatives and private processing companies manage 100 million litres per day but by 2020 they will manage 160 million litres daily (Rabobank data).
Let’s return to the development prospects. Growth will mainly be driven by cheese, yoghurt, ice cream, baby food and UHT milk. Added value dairy products are expected to increase their current market share of 21% to 30%, i.e. to a market that will be worth $7 bn from one currently worth $2.5 bn.
Changes will also take place over the next few years with regard to the size of farms – a transformation which is actually already underway. The reason for this positive outlook lies in various factors, first and foremost a growing young population that is increasingly consuming added value and brand name dairy products.
It seems clear that for all those wishing to design a business strategy in order to be a player in this major market it will be fundamental to take the above-mentioned factors into careful consideration.