7/27/2019 Dairy Market to Grow by 13

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Dairy market to grow by 13-15 pc till2019-20: ReportBy PTI | 10 Sep, 2013, 07.28PM IST0 comments|Post a Comment

READ MORE ON Shiva Mudgil|Rabobank|market share|market conditions|dairy market|CAGR

The market share of value-added products is likely toincrease to 31 per cent from the current 21 per cent during this time period, it pointed out.

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MUMBAI: The country'sdairy marketwill continue to grow at about 13-15 per cent

annually till 2019-20, on increasing consumption of value added products and the value

chain becoming more and more organised, according to a report by Rabobank.

"India dairy is emerging as a strong consumption story, with the market growing at a

pace. We expect this trend will gain momentum over the next 4-5 years driven by

increasing consumption of value-added products and the formalisation of the value

chain," the report said.

According to the report,Rabobankexpects this segment to grow at aCAGRof 13 to 15

per cent until 2019-20.

Themarket shareof value-added products is likely to increase to 31 per cent from the

current 21 per cent during this time period, it pointed out.

The main factors driving growth are increased consumer interest in higher protein diets,

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7/27/2019 Dairy Market to Grow by 13

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greater affordability due to growing disposable incomes and rising awareness and

availability of dairy through channels such as organised retail and food service

segments, it said.

The country's total organised diary sector is about USD 10 billion in 2012-13,

comprising cooperatives and private players who control the supply chain linkages.

"For years, the Indian dairy market has remained an enigma for global dairy players,"

saidd Rabobank AnalystShiva Mudgil, adding that currently, however, the market is in a

transition phase.

High market growth and favourablemarket conditionsmay make now the right time for

global players to engage with the Indian dairy sector, he pointed out.

India's large consumption market, its existing milk supplies and established consumer

preference for dairy products, has encouraged global dairy companies to engage with

India in the past, the report said.

However, the challenging environment, with its informal fragmented supply chain, raw

milk quality concerns, small base for value-added dairy products and ever-changing

trade regulations, proved a challenge and a strong disincentive.

Nonetheless, India's formal dairy market has shown strong growth in recent years,

which is likely to accelerate due to product innovation, enabling government policies

and industry consolidation.

Rabobank anticipates this acceleration will help improve industry margins by attaining

greater scale, higher capacity utilisation and an increasing contribution from value-

added products in total dairy revenues.

"While the dairy market in India is not for every company, considering the challenges,

many global companies should now be revisiting their Indian dairy strategy," he said,

adding that for some, it may prove to be the right time to join thegame, even on a small

scale, through starting a strategic dialogue on Indian dairy

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