India Dairy Products Market By Product Type (Butter, Cheese, Cream, Dairy Desserts, Milk, Sour Milk Drinks, Yogurt), By Sales Channel (Supermarkets/Hypermarkets, Convenience Stores, Online, and Others), By Region, By Competition Forecast & Opportunities, 2019-2029F

Market Overview

India Dairy Products Market has valued at USD24.5 billion in 2023 and is anticipated to project robust growth in the forecast period with a CAGR of 6.3% through 2029. The India Dairy Products Market is a dynamic and integral part of the country's food and agriculture sector. Dairy products have been an essential component of Indian cuisine and nutrition for centuries, and the market has undergone significant transformation over the years.

The India Dairy Products Market is one of the largest in the world, owing to the country's vast population and deep-rooted dairy culture. It encompasses a wide range of products, including milk, butter, ghee, yogurt, cheese, paneer (cottage cheese), and various traditional dairy items.

India's massive population provides a consistent and substantial consumer base for dairy products. The ever-increasing population drives demand for milk and dairy items, making the market resilient and growing. As incomes rise, consumers tend to seek more diverse and value-added dairy products. This has led to increased demand for premium and specialty dairy items. Furthermore, the ongoing urbanization trend in India has led to changes in dietary habits. Urban consumers often opt for packaged and processed dairy products, contributing to market growth.

There is a growing awareness of the nutritional benefits of dairy products, including their rich protein and calcium content. This awareness has boosted the consumption of dairy items, especially among health-conscious consumers. Additionally, the dairy industry has witnessed innovation in terms of product development, packaging, and marketing. New product variants, flavored yogurts, and functional dairy products have gained popularity.

Maintaining the cold chain and ensuring proper storage for dairy products, especially in remote areas, can be a logistical challenge. Ensuring the quality and safety of dairy products, particularly milk, is crucial. Quality control and hygiene standards need to be rigorously enforced. The prices of raw milk are subject to fluctuations, impacting the profitability of dairy farmers and processors. Price volatility can also affect consumer prices. The market is competitive, with both domestic and international brands vying for market share. This competition can lead to price wars and marketing expenses. In rural areas, the lack of modern dairy processing facilities and infrastructure can hinder the growth of the dairy industry.

Key Market Drivers

Rising Health Consciousness and Nutritional Awareness

One of the primary drivers propelling the growth of the India Dairy Products Market is the escalating health consciousness and nutritional awareness among consumers. As the country grapples with lifestyle-related health issues like obesity, diabetes, and heart diseases, people are becoming more mindful of their dietary choices. Dairy products, rich in essential nutrients like calcium, protein, and vitamins, are being recognized as a crucial component of a balanced diet.

Consumers are increasingly turning to dairy products for their health benefits, particularly in terms of bone health and overall well-being. Calcium, found abundantly in dairy, is essential for strong bones and teeth, making dairy products a preferred choice, especially among parents for their growing children. Moreover, the protein content in dairy aids in muscle development and repair, making it a sought-after dietary source for fitness enthusiasts.

The growing popularity of dairy-based probiotics and fermented products like yogurt and kefir is another manifestation of this health consciousness trend. Probiotics are known to support digestive health and boost the immune system, making them attractive to consumers seeking holistic well-being.

Evolving Consumer Preferences and Dietary Shifts

The second driver reshaping the India Dairy Products Market is the evolving consumer preferences and dietary shifts. As incomes rise and urbanization continues, consumers are looking for convenient and value-added dairy products that align with their changing lifestyles.

One notable shift is the rising demand for value-added dairy products like flavored yogurt, dairy-based beverages, and fortified milk. These products cater to consumers seeking variety and convenience in their diets. Flavored yogurt, for instance, is gaining popularity as a tasty and nutritious snack, while dairy-based beverages, such as milkshakes and lassi, offer refreshment and nutrition on-the-go.

Furthermore, dietary restrictions and preferences, including vegetarianism and lactose intolerance, have led to the development of alternative dairy products. Plant-based dairy substitutes like almond milk, soy milk, and coconut yogurt are becoming increasingly common choices for those looking to avoid animal-based products. This trend has encouraged traditional dairy companies to diversify their product portfolios by offering plant-based alternatives, thus expanding their market reach.

Rapid Urbanization and Changing Retail Landscape

The third key driver powering the India Dairy Products Market is rapid urbanization and the changing retail landscape. As more Indians move to urban areas in search of employment opportunities and improved living standards, there is a growing demand for convenient, ready-to-consume dairy products.

The proliferation of modern retail formats, including hypermarkets, supermarkets, and convenience retailers, has made it easier for consumers to access a wide range of dairy products. The presence of these retail formats has also facilitated product visibility and promotion, leading to increased consumer awareness and product trial.

Additionally, the growth of e-commerce platforms has played a pivotal role in expanding the reach of dairy product manufacturers. Online grocery shopping has become increasingly popular, especially in urban areas, allowing consumers to conveniently purchase dairy products from the comfort of their homes. This trend gained significant traction during the COVID-19 pandemic, further boosting the online dairy sales channel.

Moreover, urbanization has led to changes in lifestyles and eating patterns, resulting in greater demand for packaged and processed dairy products. Dairy manufacturers are capitalizing on this shift by offering products with longer shelf lives, attractive packaging, and portion-controlled sizes, which appeal to the urban, on-the-go consumer.

Key Market Challenges

Supply Chain and Infrastructure Challenges

One of the foremost challenges in the India Dairy Products Market is the inefficiency of the cold chain infrastructure. Maintaining the quality and freshness of dairy products, particularly in a country with extreme climatic variations, is paramount. However, the cold storage and distribution infrastructure in many regions remains inadequate and poorly maintained. This results in spoilage, wastage, and compromised product quality during transportation and storage.

While India is among the world's largest milk producers, the lack of modern dairy processing facilities is a significant hurdle. Traditional and unorganized dairy processing methods often lead to inefficiencies, inconsistent product quality, and safety concerns. The need for investment in state-of-the-art processing facilities and adherence to international quality standards is evident.

The dairy supply chain in India is highly fragmented, with millions of small-scale dairy farmers and cooperatives involved. While this decentralization promotes rural livelihoods, it also poses challenges in terms of milk collection, quality control, and distribution. Coordinating these dispersed actors efficiently can be a logistical challenge.

Quality and Safety Concerns

Ensuring the safety and quality of milk is a perpetual challenge in the India Dairy Products Market. Contaminated milk, often due to poor animal husbandry practices, inadequate veterinary care, and substandard milk collection methods, remains a significant issue. This poses health risks to consumers and affects the reputation of dairy products.

The lack of standardized testing and quality control procedures across the dairy supply chain leads to inconsistencies in product quality. Variations in fat content, protein levels, and hygiene standards make it challenging to establish trust among consumers and meet international export requirements.

The regulatory framework for dairy products in India can be complex and varies from state to state. The absence of a unified national regulatory authority for dairy products can create confusion and hinder the enforcement of food safety standards.

Market Access and Competition

While India has several organized dairy companies, a significant portion of the dairy market remains in the hands of the unorganized sector, which includes small-scale local vendors and informal dairy sellers. These unregulated players often operate without adherence to quality and safety standards, creating an uneven playing field for organized dairy companies.

The rise of plant-based milk alternatives, such as almond milk, soy milk, and oat milk, presents a new challenge to traditional dairy products. Changing consumer preferences, especially among urban populations, are driving demand for these alternatives, impacting the market share of dairy products.

Key Market Trends

Growing Demand for Healthier and Value-Added Dairy Products

One of the most notable trends in the India dairy products market is the increasing consumer demand for healthier and value-added dairy products. As health consciousness continues to rise, consumers are seeking dairy options that offer nutritional benefits beyond traditional milk and basic dairy items.

This trend is evident in the growing popularity of products like probiotic yogurts, lactose-free milk, and functional dairy beverages enriched with vitamins, minerals, and other health-promoting ingredients. These value-added dairy products are marketed as aiding digestion, boosting immunity, or catering to specific dietary requirements, such as lactose intolerance.

The shift towards healthier dairy options is not only driven by consumer preferences but also by the proactive efforts of dairy companies to diversify their product portfolios. These companies are investing in research and development to create innovative dairy products that align with current health and wellness trends. As a result, the market is witnessing a proliferation of dairy products that cater to specific health needs, appealing to a broader customer base.

Rising Demand for Organic and Sustainable Dairy Products

Another notable trend in the India dairy products market is the surging demand for organic and sustainable dairy products. Consumers are becoming increasingly conscious of the environmental and ethical aspects of food production, leading to a growing preference for products that are organic, ethically sourced, and sustainably produced.

Organic dairy products, which are free from synthetic pesticides, hormones, and antibiotics, have gained popularity among health-conscious and environmentally aware consumers. Many dairy companies are now focusing on organic farming practices to meet this demand.

Additionally, there is a rising interest in dairy products that are sourced from farms practicing ethical and sustainable agriculture. Consumers are keen to support brands that prioritize animal welfare, reduce their carbon footprint, and promote fair trade practices in the dairy supply chain.

To cater to this trend, dairy producers are adopting sustainable farming methods, investing in eco-friendly packaging, and transparently communicating their commitment to ethical and sustainable practices. These efforts not only resonate with conscious consumers but also contribute to brand loyalty and positive public perception.

E-Commerce and Online Dairy Retailing

The digital revolution has significantly impacted the India dairy products market, leading to the rapid growth of e-commerce and online dairy retailing. The convenience, wide product selection, and contactless shopping experience offered by online platforms have made them a preferred choice for many consumers, especially in urban areas.

Consumers can now order a variety of dairy products, including milk, yogurt, cheese, and butter, from the comfort of their homes and have them delivered to their doorstep. The COVID-19 pandemic further accelerated this trend, as lockdowns and safety concerns led to an upsurge in online grocery shopping, including dairy products.

Online dairy retailers have responded by enhancing their product offerings, improving delivery logistics, and ensuring the freshness and quality of dairy items during transit. They also frequently offer exclusive discounts and promotions to attract and retain customers.

Segmental Insights

Product Type

In Milk, often referred to as the "white gold" of India, holds a substantial and indispensable share in the country's Dairy Products Market. India's rich tradition of dairy farming, coupled with the nutritional importance of milk, has cemented its position as a staple in the daily lives of millions of Indians. Several key factors contribute to milk's significant share and enduring prominence in the Indian dairy industry.

Milk is widely recognized as a highly nutritious and wholesome food item. It is a primary source of essential nutrients such as calcium, protein, vitamins (especially Vitamin D and Vitamin B12), and minerals. In a country where malnutrition remains a concern, milk serves as an accessible and affordable source of vital nutrients, especially for children.

Milk occupies a central place in Indian cuisine and cultural traditions. It is used in a variety of preparations, from traditional sweets like "gulab jamun" and "rasgulla" to savory dishes like "paneer" (cottage cheese) and "curd" (yogurt). Milk is also a fundamental ingredient in the daily ritual of making "chai" (tea) enjoyed by millions of Indians.

The dairy industry in India has leveraged milk's versatility to create a wide range of value-added products. This includes various types of milk like cow's milk, buffalo milk, and camel milk, as well as products such as ghee (clarified butter), butter, cheese, and flavored milk. These diverse offerings cater to different tastes and preferences across the country.

Dairy farming provides a source of livelihood for millions of rural households in India. It empowers farmers, especially women, by offering a consistent income stream from the sale of milk and dairy products. As a result, milk production plays a crucial role in supporting rural economies.

The supply chain for milk in India is extensive, reaching even remote areas. The presence of dairy cooperatives, like Amul, Mother Dairy, and various state milk federations, has helped in the efficient collection and distribution of milk. This ensures that milk remains accessible to both urban and rural populations.

Sales Channel

In recent years, the Online Sales Channel has emerged as a game-changer in the India Dairy Products Market, carving out a substantial share and revolutionizing the way consumers access and purchase dairy items. This segment's rapid growth can be attributed to several key factors that highlight its prominence within the market.

The primary driver behind the success of the Online Sales Channel in the dairy products market is the unparalleled convenience it offers to consumers. With a few clicks or taps, shoppers can access a vast array of dairy products, from milk and yogurt to cheese and butter, without leaving their homes. This level of accessibility is particularly appealing to busy urban consumers seeking a hassle-free shopping experience.

Online platforms have strategically expanded their product offerings within the dairy segment. Consumers can now choose from a wide variety of dairy products, including organic and specialty items, catering to various dietary preferences and requirements. The convenience of finding niche or unique dairy products online is a significant draw for consumers seeking variety.

Concerns about the freshness and quality of dairy products are addressed through stringent quality control measures and supply chain practices employed by online retailers. This reassures consumers about the safety and quality of the dairy items they purchase online, contributing to the channel's popularity.

The rapid urbanization of Indian cities, coupled with changing lifestyles, has led to an increased demand for convenient shopping options. Urban consumers, often leading fast-paced lives, appreciate the convenience of having dairy products delivered to their doorsteps, saving them time and effort.

India's expanding internet penetration, fueled by the growing adoption of smartphones and affordable data plans, has created a massive customer base for online dairy product sales. Consumers in urban and semi-urban areas can easily access and use online grocery and dairy platforms.

The COVID-19 pandemic acted as a significant catalyst for the Online Sales Channel within the dairy market. Lockdowns, social distancing measures, and safety concerns led to a surge in demand for contactless grocery shopping, including dairy products, thereby accelerating the growth of online platforms.

Regional Insights

The North region of India has emerged as a powerhouse in the India Dairy Products Market, playing a pivotal role in shaping the dynamics of this vital industry. This region, comprising states like Punjab, Haryana, Uttar Pradesh, and Rajasthan, boasts a significant share in the dairy market for several compelling reasons.

The North region of India is known for its robust dairy farming practices and high milk production. States like Punjab and Haryana are major contributors to the country's milk output. The availability of abundant milk forms a strong foundation for the dairy products market, ensuring a steady supply of raw materials.

The North region has a rich tradition of dairy consumption. Milk and dairy products are integral to the local culinary culture, and dairy-based sweets like paneer, ghee, and various milk-based desserts are popular staples in the region. This cultural affinity towards dairy consumption drives demand for dairy products.

With a steadily growing population, especially in urban areas like Delhi-NCR (National Capital Region), there is an expanding consumer base for dairy products. Urbanization leads to changing dietary habits, with increased consumption of dairy products like milk, yogurt, cheese, and butter.

There is a growing awareness of the nutritional benefits of dairy products. Dairy is considered a rich source of calcium, protein, and essential vitamins, making it an essential component of a balanced diet. This awareness fuels the demand for dairy products, especially among health-conscious consumers.

The North region boasts a diverse range of dairy products, catering to various tastes and preferences. From traditional items like paneer (Indian cottage cheese) and dahi (yogurt) to modern offerings like flavored milk, the region offers a wide variety of dairy choices to consumers.

Recent Developments

• InNovember 2022, Nestlé SA inaugurated a new R&D center for Latin America,leveraging the company's global scientific and technological expertise, withthe aim of driving consumer-focused innovation in the region.
• InJuly 2022, Amul disclosed an investment of USD60.57 million towards theestablishment of a state-of-the-art dairy plant in Rajkot, bolstering itsproduction capabilities across an array of milk-based, yogurt, and buttermilk products.
• InMay 2022, Amul introduced Isabcool flavored ice cream, enriched with psylliumhusk for promoting healthy digestion.

Key Market Players

• BritanniaIndustries
• Dodla DairyLtd
• GujaratCooperative Milk Marketing Federation Ltd
• Hatsun AgroProduct Ltd
• KarnatakaCooperative Milk Producers Federation Ltd
• MotherDairy Fruit & Vegetable Pvt. Ltd
• Nestlé SA
• Parag MilkFoods Ltd
• RajasthanCo-operative Dairy Federation Ltd
• Tamil NaduCooperative Milk Producers Federation Ltd

Report Scope

In this report, the India Dairy Products market has been segmented into the following categories, in addition to the industry trends which have also been detailed below

• India Dairy Products Market, By Product Type

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• India Dairy Products Market, By Sales Channel

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• India Dairy Products Market, By Region

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Competitive Landscape

Company Profiles

found at Customizations

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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