Indian dairy industry

Doodh Ka Doodh Pani Ka Pani

An Interesting Fact

50% of all Buffaloes and 20% of all Cows reside in our India.

Flash Back!

Why we stopped raising cattle at home?CostSanitationSpace

What is Dairy Industry?

Is it Handling of Cows?

Dairy Industry

Handling of MilkHandling of Milk ProductsMarketing of Milk and Milk ProductsDairy Technology

Dairy Technology

It’s a Science of :Milk processingManufacture

Operation Flood

Launched in 1970Flood of MilkAugment Rural IncomeEnsuring Fair PricesThree Phases

First Phase (1970 – 1980)

Support from Europe through World Food Programme

NDDB’s RoleConnecting Milk sheds with consumers

Second Phase (1981 to 1985)

Milksheds increased to 136290 Urban Markets43000 Village Co-operatives4.25 Million Milk Producers

Third Phase

Co-operatives ExpandedInfrastructureCattle Health CareEducation30,000 New DairiesWomen Participation

Indian Dairy Industry

One of the fastest growing sectors in India, with a total size of about INR1160 billion (INR 1,16,000 crore) OR US$ 26.5 billion.

In Dairying, 75 million women are engaged as against 15 million men.

Indian Dairy Scenario

Position Of Milk Production

By Farm Level

-45% Unorganised

-42% Organised -

13%0

5

10

15

20

25

30

35

40

45

Farm Level Unorganised OrganisedSector

Position Of Milk Utilization

Consumed

as Milk - 46%

Traditional - 47%

Western - 7%

05

10152025303540

4550

Consumed TraditionalProducts

WesternProducts

Milk Supply Chain, in the traditional and unorganized dairy system

(i) Milk producers directly supply milk to the consumer or through a marketing channel.

(ii) Milk producers supply milk to the consumers through the intermediaries like middlemen

Producer--Consumer Producer—Market---

Consumer Producer—Middleware—

Market—Consumer

Unorganized Dairy System

Retailing of Milk in India is thoroughly unorganized.

There is no supply chain management perspective.

An overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organised.

Unorganized Dairy System

As much as 96 per cent of the 5 million-plus outlets are smaller than 500 square feet in area.

India per capita retailing space is about 2 square feet thus the lowest in the world .

Just over 8 per cent of India's population is engaged in retailing.

Milk Supply Chain, in the traditional and Organized dairy system

(i) Producers’ milk reaches private processors directly and After Processing it reaches Consumer.

(ii) Milk producers supply their milk to primary cooperative society, which inter alia supplies to secondary cooperative. The milk, after processing , reaches consumers via marketing channel, either directly or through apex cooperative.

Milk Supply Chain, in the traditional and Organized dairy system

Producer—Private Processor—Consumer

Producer—Middlemen—Market—Consumer

Producer—Primary/Secondary Cooperative Society—Apex Society—Market—Consumer

Major Player in organized sector

Organized Dairy System

From a size of only Rs.80,000 crore, the ORGANISED retail industry will grow to Rs. 2,40,000 crore by 2007.

Challenge for Organized Sector

Competition from the unorganised sector.

Organised sector have big expenses to meet.

Organised retailing also has to cope with the middle class psychology that the bigger and brighter a sales outlet is, the more expensive it will be.

Challenge for Organized Sector

While India as a country became the world’s largest milk producer in 2001, not a single Indian dairy company featured in the list of global top 20 dairy companies

Opportunity for Organized Sector

Economic and demographic changes including rising disposable incomes.

A growing proportion of working women becoming a part of the urban population.

Greater awareness due to exposure to global trends

Turning Point for Organised Sector

The dairy industry was de-licensed in 1991.

No license is required for setting up of large-scale production facilities for manufacture of ice cream.

The exemption limit is increased for compulsory registration of dairy plants, from the present 10,000 litres a day to 20,000 litres.

Position Of Organized Sector

There are 678 manufacturing units registered with the Central and State Governments.

The combined capacity of these units is 73 million litres per day while they process about 29 million litres per day.

Significant excess capacity.

New Activities

Launching of Venture Capital Fund for Dairy ----scheme is being implemented through NABARD to provide loans to entrepreneurs in dairy and poultry sectors at a lower rate of interest.

-----The objectives are to encourage clean milk production, promote use of modern technology in dairy farms and to bring the milk produced in the unorganised sector to organised sector.

Doodh Doodh Doodh Wonderful Doodh!

VitaminsIodineCalciumProteinsNutrientsShort Shelf Life

Doodh Ke Parivarwale

55% of Milk produced converted to various Milk Products

Sabse Bada KhiladiAMUL

Origin from the Sanskrit word ‘Amoolya’.Amul is a brand under which GCMMF

markets its products.Birth of GCMMF is closely linked to

India’s freedom struggle.

The Birth of Amul

First Co-operative formed on 4th Jan 1946. Kaira District Co-operative Milk Producers

Union Ltd. formed 14th Dec 1946. Gujarat Co-operative Milk Marketing

Federation (GCMMF) was formed in 1973. Dr. Verghese Kurien was the architect of

Amul’s success.

Dr.Kurian’s Mantra for Amul

QualityEconomyAvailabilityService

Aaj Ka Amul

GCMMF is India’s largest food products marketing organisation.

12 district co-operative milk producers’ union.

2.5 million producer members.2.28 billion litres milk collected in 2005-

2006.Sales turnover stands at Rs.37736 million

in 2005-06 (Rs.13790 million in 1995-96)

Amul Products

Amul Butter

Milk powder

Toned Milk

Dahi

85% 1

60% 1

65% 1

60% 1

Market Market

Share Position

Amul Products

Flavoured Milk

Ice Creams

Cheese

Ghee

55% 2

75% 1

90% 1

8% 2

Market Market

Share Position

Mother Dairy

No.1 Regional Player in India. It was set up in 1974 under the Operation

Flood Program. It is now a subsidiary company of a wholly

owned company of the National Dairy Development Board (NDDB).

Products

Mother Dairy markets & sells dairy products under the Mother Dairy brand (like Liquid Milk, Dahi, Ice Creams, Dairy Whitener and Butter)

Mother Dairy sources its entire requirement of liquid milk from dairy cooperatives

Strengths

Strengths

Demand profile: Absolutely optimistic. Margins: Quite reasonable, even on packed liquid milk. Flexibility of product mix: Tremendous. With balancing

equipment, you can keep on adding to your product line. Availability of raw material: Abundant. Presently,

more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.

Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years.

Weakness

Perishability Lack of control over yield Logistics of procurement Problematic distributionCompetition

Opportunity

Value addition

Areas of Value addition Value added products like

Shrikhand,paneer,khoa,flavored milk, dairy sweets etc

Addition of cultured products like yoghurt and cheese lend further strength in utilization of recourses and presence in the market place

Export potential Amul is exporting to Bangladesh, Sri-Lanka, Nigiria and the Middle East

Threats

Milk Vendors, the un-organized sector.

Today milk vendors are occupying the pride of the place in the industry.

Organized dissemination of the information about the harm that they are doing to producers and consumers should see a steady decline in the importance

Operation Flood.