The Indian dairy sector is estimated to be worth Rs 3.6 lakh Crore, according to the Department of Animal Husbandry, Dairy & Fisheries, Ministry of Agriculture, Govt of India. And major names in the space include Amul, Mother Dairy, Nestle, Gowardhan, Britannia, along with the many local state cooperatives. However it is the healthy growth rate of 15-20% that this industry is seeing, which makes it lucrative. Most players in the dairy business would agree to the supply chain and cold storage complexities involved in making the business successful. Most of the challenges have been related to procurement of the correct quality of milk to guarantee the best quality in the finished product.
Dairy Industry has played an important role in the socio-economic development of the nation by generating huge rural employment as well as providing cheap and nutritional food to the vast population. The per capita availability of milk in India stands at 289.4 grams per day. Backed by strong domestic demand, the per capita availability of milk is anticipated to reach 336 grams per day in 2017.
Though the dairy market in India is dominated by the unorganized sector, comprising of 70 million rural households, the organized sector has shown remarkable growth in the last few years. Dairy sector witnessed spectacular growth during 1971 and 1996 primarily due to integrated cooperative dairy development programs conducted by the National Dairy Development Board (NDDB). Moreover, after 1991, due to liberalization and delicensing, private sector also started entering the market, which further accelerated its growth.
To sum up, the Indian dairy industry is a stable market at present and has strong growth potential in the future years. There are certain factors that predominantly work towards enabling the sector to grow in the likes of higher disposable income that aids in greater spending power by consumers, rapid urbanization which leads to busy lifestyle and subsequent inclination of consumers toward packaged food products and aggressive marketing campaigns by all the players to break the product clutter and attract consumers toward their brand.
In addition to these, the other factors which are contributing towards rapid growth of the industry include favorable demographics, fast expanding retail network, and rise in bovine population particularly the Holstein Breed -tenfold since 1980.