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REPORT ON

DAIRY PRODUCTS MARKET IN INDIA

BIG STRATEGIC MANAGEMENT CONSULTANTS

3, Hindustan Kohinoor Complex, L B S Marg, Vikhroli (W), Mumbai, India Tel: 022 67427821-29 Fax 022 67427826

P.O. Box 29815, Dubai, United Arab Emirates.

Tel 00971-4-431 5672 Fax 00971-4-431 5673 URL: www.big-consultants.com

Mazustegui 21- 2a Entreplanta Izquierda , 47806 , Bilbao Vizcaya , Spain

http://www.big-consultants.com/



BIG Strategic Management Consultants

CONTENTS

1. Indian Economic Overview

3. Understanding Dairy Products

4. Major Players in Dairy Products Industry

5. About BIG Strategic Management Consultants

2

2. Packaged Food Overview


-4%

-2%

0%

2%

4%

6%

8%

10%

2008 2009 2010 2011 2012

% C

hang

e O

ver P

revi

ous

Year

Year

GDP SCENARIO

World Baseline World Downside scenario Indian Scenario

After several consecutive

years of strong growth, the

world economy entered into

the worst recession which

started in third quarter of 2008.

All the advanced

economies faced deep

economic crisis , as the world

GDP dropped by 1.3% in

2009.

The signs of recovery shall

be visible from fourth quarter

of 2010.

The Indian economy which

has also been impacted by the

global turmoil, posted a

growth of 5.4% in FY 2009.

Source: International Monetary Fund (IMF)

3

INDIAN ECONOMIC SCENARIO

India is among the top 15 countries in the global economy in terms of GDP at current prices.


CONTENTS





4



UNDERSTANDING PACKAGED FOOD

The dairy exports in 2007–08 rose to US$ 210.5 million against US$ 113.57 last fiscal

PRODUCT DESCRIPTION I. Sauces,

Dressings and Condiment

Ketchups, Pickles, Mayonnaise, Spreads, Salad Dressings, Jams,

Syrups and Cordials.

II. Dairy Products Yogurt, Plain and Flavored Milk, Butter, Cheese, Ice Cream, Buttermilk,

Pudding.

III. Bakery Goods Breads, Cakes, Croissants, Cookies, Bakery Snacks, Sandwiches

IV. Soup and canned food

Soups, Baked Beans, Fruits and Vegetables, Sweets, Canned Meat,

Pulps

V. Snacks and Candy

Wafers, Chocolates and Confectionaries, Namkeens

VI. Processed and Ready to eat Meals

Vegetable and Curry Meals, Rice, Cup Noodles, Cooked Noodles and

Pastas

5


CONTENTS





6



The size of the global processed-food market is estimated at US$ 3.2 trillion and nearly 80 per cent of agricultural products in the developed

countries get processed and packaged.

As nations such as China, India, Brazil and Russia become wealthier, they are changing their eating habits resulting in increase in consumption

of Dairy products. World milk production in 2009 should reach 701 million tonnes

DAIRY PRODUCTS SHARE IN THE GLOBAL FOOD MARKET (2009)

World milk production in 2009 was 701 million tonnes, or an increase of just over one per cent, with production growing faster in developing countries than in developed countries.

Source: New York Times Database

0%

20%

40%

60%

80%

100%

120%

USA Spain France Mexico Japan Russia Brazil SouthAfrica

China

8% 10% 7% 6% 13% 11% 13% 8% 21%

39% 41% 36%

21% 25% 28% 30%

29%

27%

14% 20%

23% 62%

9%

32% 21% 39% 11% 2%

1% 3%

1%

5%

4% 3%

2%

8% 8%

9% 10%

2%

3%

5% 2%

5%

4%

23% 15% 18%

5%

42%

15% 29%

14% 25%

6% 4% 3% 3% 3% 5% 2% 3% 4%

Sauces, Dressings and Condiments Dairy Products Bakery Goods

Pasta Soup and Canned food Processed/Ready-to-Eat Meals

Snacks and Candy

International Dairy trade is

mostly in manufactured

products, primarily

butter, cheese, and milk powders.

7


India’s national dairy plan contains a proposed spend of Rs. 173 billion to increase the country's milk production to meet the

projected demand of 180 million tonnes by 2021-22.

The industry is growing at 3.8% over the past two-three years. The top ten milk producing states of Uttar Pradesh, Rajasthan,

Punjab, Andhra Pradesh, Gujarat, Maharashtra, Madhya Pradesh, Bihar, Tamil Nadu, and Haryana account for more than 80 percent

of India’s milk production.

Almost 46 per cent of milk produced in India is consumed as liquid milk and only 15 per cent of milk is processed and packed.

INDIAN DAIRY PRODUCT MARKET

India is the largest producer of milk producing more than 100 million tons of milk per annum.

Source: National Dairy Development Board Database 2010

The current size of

the Indian dairy

sector is US$ 62.67

billion

80

85

90

95

100

105

110

2004-05 2005-06 2006-07 2007-08 2008-09

92.5

97.1

100.9

104.8

108.5

Tota

l Milk

Pro

duct

ion

(Mill

ion

Tonn

es)

Year

Milk Production

8


India is one of the fastest growing markets for cheese with a total consumption of about 7,000 tons a year

Top players of branded cheese manufacturing in India include Amul, Britannia, Le Bon, Mother Dairy and others.

During the last few years, the Indian cheese market has grown steadily at 15 to 20 per cent per annum


The urban population accounts for major cheese consumption in India. Taken together, the four metropolitan cities viz., Delhi, Mumbai, Chennai and Kolkata consume over 60% of the total cheese sold in India.

Source: Intecos – cier’s Market Forecast and Indicators

0

1

2

3

4

5

6

7

8

2004-05 2005-06 2006-07 2007-08 2008-09

4.76 5.3

5.86 6.45

7.06

Dem

and

for P

roce

ssed

Che

ese

(Rs

billi

on)

Year

Processed Cheese The Indian Cheese

market has been

growing at 10% over

the past couple of

years.

9


The ice cream market in India can be divided into: the branded market and the grey market. The branded market at present is 100

million litters per annum valued at Rs. 800 crores. The grey market consists of small local players and cottage industry players.

The per capita consumption of ice cream in India is approximately 300 ml, as against the world average of 2.3 litters per annum.

Vanilla, Strawberry and Chocolate together constitute approximately 60% of the market.


The Indian ice cream industry is currently estimated to be worth Rs. 2,100 crores, growing at a rate of approximately 12%.

Source: Intecos – cier’s Market Forecast and Indicators

0

50

100

150

200

250

300

350

400

2004-05 2005-06 2006-07 2007-08 2008-09

286.2 312

340.1 370.7

396.6

Dem

and

for I

ce C

ream

(mill

ion

litre

s)

Year

Ice Cream

10


GROWTH DRIVERS FOR MILK & DAIRY PRODUCTS IN IINDIA

Excise duty on ready to eat packaged foods and instant food mixes has been brought down to 8 per cent from 16 per cent.

POTENTIAL TO CONSUME: As a developing nation with a healthy growth in per capita income, unlike in the developed world, there is an increasing

acceptance of milk and milk products in India. This potential can only increase with the rise in disposable income levels,

increasing urbanisation and distribution levels.

STRONG CO-OPERATIVE EFFORTS: With support from the government, the Co-operative movement is gaining strength in the country. This has lead to better

prices for farmers and a more organised method of collection, processing and distribution. Many private sector players have

now entered the business and their efforts will only help to market, distribute and popularise the consumption of milk and milk

products.

SURGE IN RETAIL TREND: The arrival of food multinationals, rising popularity of quick-service restaurants, modern retail trade and technological

advancements

POTENTIAL TO STORE: The government plans to open 30 mega Food Parks and many Cold Storage by the end of the 11th five year plan

(2007-2012).

11


CONTENTS





12



Sr. No Name Sales Turnover 2008-09

(Rs. crore) 1 Amul 6,705

2 National Dairy Development Board 3,200

3 Britannia 2,738

4 Vijaya 2,500

5 Nestle India Dairy Products 2,311

6 Gowardhan Heritage 320 7 Kraft 233

8 Vadilal Group 189

COMPETITION ANALYSIS

The industry is mainly unorganized with 75% of the processing units belonging to the unorganised category, the

organised category though small, is growing fast.

Recognising the growth potential of the branded health food sector in India, fast moving consumer goods (FMCG) majors are foraying into this sector in a big way.

The other Prominent companies in India are Vijaya, Verka, Fromageries Bel, Dabur

13


CONTENTS





14


BIG Strategic Management Consultants 15

ABOUT US Foundation BIG Strategic Management Consultants, established in 2008, is a fusion of the vast experience of

industry veterans and its synergy with the young blood, which blends to give superior consulting services

to both domestic and international clients in fields as diverse as strategic consulting, technology

consulting, financial consulting, market research and analysis, feasibility studies and manpower planning. Our Goal To exceed the expectations of every client by providing outstanding services which are timely, accurate

and innovative.

Our Associates Are distinguished by their functional and technical expertise along with their hands-on experience,

thereby rendering the most effective and professional service.

Our Services help clients

Define new areas of businesses.

Give a competitive edge to current and new businesses.

Service with inventive business solutions which are realistic and achievable.

BIG Strategic Management Consultants 16

OUR SERVICES

The regional exposure has a reach in Asia-Pacific, Middle East and Europe.

The various industries covered by the panel are divided into 3 different sectors covering the various

industries as mentioned below. A - Government Departments and Organizations

(Policy Formulations, Organization Redesign, Impact Assessment Studies)

B – Manufacturing Industry

(Automotive,Chemicals,Consumer Goods, Food & Beverage, Pharmaceuticals, Textiles, Cement,Building

Materials)

C - Service Industry

(Advertising, Financial Services, Banking & Insurance, Media and Telecom, Healthcare, Hospitality,

Transportation & Logistics, Travel & Tourism, Aviation, Shipping)

D – Miscellaneous Industry

(Agriculture, Construction and Real Estate, Power and Water, Oil and Gas, Infrastructure)

BIG Strategic Management Consultants BiG Strategic Management Consultants 17

HOW CAN HELP? G

RO

WTH

Assessment of the Current Dairy

Product Market In India.

Market Research for foraying into new Product and

Demand Assessment for

the same.

Competitive Positioning,

Branding and Acquiring Market

Share

Strategy Formulation for Entering New

Segments and Portfolio

Expansion


Thank You

19

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