India Dairy Market 2024–2033

Reports Description

India Dairy Market was valued at USD 131.5 Billion in 2024 and is expected to reach USD 290.8 Billion by 2033, at a CAGR of 8.01% during the forecast period 2024 – 2033.

Dairy products are food items derived from milk. This primarily refers to milk from cows, but it can also include milk from other mammals like goats, sheep, buffalo, and camels. They are a good source of essential nutrients like calcium, protein, and vitamins. The dairy market refers to the economic system involved in the production, distribution, and consumption of dairy products.

India Dairy Market: Growth Factors

Rising Population and Urbanization

India’s growing population, coupled with increasing urbanization, is a significant driver for the dairy market. With over 1.3 billion people, India has one of the largest consumer bases globally. Urbanization leads to changing lifestyles and dietary patterns, with a higher demand for dairy products such as milk, yoghurt, and cheese.

According to the Ministry of Statistics and Programme Implementation, India’s urban population is projected to reach around 600 million by 2030. This demographic shift will continue to drive the consumption of dairy products, presenting a significant opportunity for market growth.

Government Initiatives and Support

Government initiatives aim at promoting dairy farming and enhancing milk production. These supportive policies and initiatives play a crucial role in driving the Indian dairy market. Schemes such as the National Dairy Plan (NDP) and Operation Flood have been instrumental in increasing milk productivity, improving dairy infrastructure, and providing financial assistance to farmers.

For instance, under the NDP Phase I, the government increased milk productivity from 3.6% to 6% annually. Such initiatives boost the confidence of dairy farmers, encourage investments in the sector, and foster innovation, driving market growth.

India Dairy Market: Restraints

Lack of Cold Chain Infrastructure

One of the significant restraints in the Indian dairy market is the inadequate cold chain infrastructure, especially in rural areas where a significant portion of milk production originates. The lack of proper storage and transportation facilities results in post-harvest losses and compromises the quality of dairy products.

According to the National Dairy Development Board (NDDB), India loses approximately 20-25% of its total milk production due to inadequate cold chain facilities. This inefficiency hampers market expansion and limits the reach of dairy products to consumers, posing a significant challenge for the industry.

Quality and Safety Concerns

Quality and safety concerns regarding dairy products remain a notable restraint in the Indian market. Instances of adulteration, contamination, and lack of hygiene standards raise apprehensions among consumers regarding the quality of dairy products.

According to the Food Safety and Standards Authority of India (FSSAI), a significant percentage of dairy products in India fail to meet the prescribed safety standards. These concerns not only impact consumer confidence but also hinder market growth by limiting consumption.

Addressing these issues through stringent regulations, enforcement mechanisms, and awareness campaigns is essential to overcome this restraint and foster market growth.

India Dairy Market: Opportunity

Growing Demand for Value-Added Dairy Products

In recent years, there has been a notable shift in consumer preferences towards value-added dairy products in India. This trend is largely driven by increasing urbanization, rising disposable incomes, and changing lifestyles. Consumers are seeking dairy products that offer convenience, health benefits, and novelty.

According to the National Dairy Development Board (NDDB), the demand for value-added dairy products like flavored yoghurts, cheese, and probiotic drinks has been steadily rising. For instance, the consumption of flavored yoghurt has witnessed a significant uptick, with urban areas experiencing the highest growth rates.

This can be attributed to the perception of flavored yoghurt as a healthier snack option compared to traditional sweets and snacks. Furthermore, the demand for functional dairy products fortified with vitamins, minerals, and probiotics is also on the rise due to increasing health consciousness among consumers.

Increasing Penetration of Organized Retail and E-commerce Channels

Another significant market opportunity in the Indian dairy sector stems from the expanding presence of organized retail chains and the rapid growth of e-commerce platforms. With the proliferation of supermarkets, hypermarkets, and online grocery platforms, consumers now have greater access to a wide range of dairy products beyond traditional milk and basic dairy items.

According to data from the Ministry of Commerce and Industry, the organized retail sector in India has been growing at a steady pace, with an increasing number of consumers preferring to purchase dairy products from modern retail outlets due to factors such as convenience, hygiene, and product variety.

Furthermore, the rise of e-commerce giants has revolutionized the distribution and marketing of dairy products, especially in urban and semi-urban areas where access to brick-and-mortar stores may be limited.

This shift towards organized retail and e-commerce channels presents a compelling opportunity for dairy companies to expand their market reach and distribution networks. By strategically partnering with retail chains and leveraging online platforms, dairy manufacturers can tap into new customer segments and capitalize on the growing demand for dairy products in India’s urban centers.

Moreover, the digitalization of retail offers avenues for targeted marketing, personalized promotions, and real-time consumer engagement, enabling companies to strengthen their brand presence and drive sales in a competitive market landscape.

India Dairy Market: Segmentation Analysis

India Dairy market is segmented by product type and distribution channels.  Based on product type, India dairy market is segmented into liquid milk and milk products.

Among all these segments, Packaged milk held the highest market segment in 2023, due to factors like convenience, longer shelf life, and hygiene concerns. Flavoured milk has been witnessing significant growth due to increased consumer preference for value-added dairy products and flavor innovation.

Based on distribution Channels, India dairy market is segmented into organized retail, unorganized retail, and online retail. Among all these segments, organized retail supermarkets/hypermarkets held the highest market segment in 2023.

Supermarkets and hypermarkets offer a wide range of dairy products under one roof, attracting consumers looking for convenience and variety. E-commerce platforms are experiencing rapid growth due to increasing internet penetration, busy lifestyles, and the convenience of doorstep delivery, especially in urban areas.

Additionally, the COVID-19 pandemic has accelerated the shift towards online shopping for groceries and essentials, including dairy products.

Report Scope

India Dairy Market: Regional Analysis

In the diverse and expansive landscape of India, the dairy market showcases a rich tapestry of regional insights, reflecting varying consumption patterns, cultural preferences, and economic dynamics across the country.

In the northern region, characterized by states like Punjab, Haryana, and Uttar Pradesh, traditional dairy products such as paneer (cottage cheese) and ghee (clarified butter) hold significant cultural importance and are staples in everyday meals.

The western region, notably Gujarat and Maharashtra, boasts a thriving dairy industry driven by cooperatives like Amul, offering a wide range of products from milk to ice cream, catering to both urban and rural markets.

In eastern states of West Bengal and Bihar, consumers exhibit a preference for sweets infused with dairy, like rasgulla and sandesh. In the southern states of Karnataka and Tamil Nadu, flavored milk and yogurt-based drinks are popular among the younger demographic, reflecting a shift towards convenient and healthier options.

Across India, increasing urbanization, rising disposable incomes, and growing health consciousness are driving demand for value-added dairy products, presenting opportunities for innovation and market expansion. Understanding these regional nuances is crucial for stakeholders seeking to navigate and capitalize on the dynamic Indian dairy market.

India Dairy Market: Recent Developments

• In December 2023, Amul Launched Camel Milk Ice Cream. Amul, known for its innovations, released a unique ice cream made with camel milk. This product aims to support camel milk producers and offer a distinct flavor profile to consumers. Camel milk is known for its potential health benefits and a lower environmental impact.

• In October 2023, Parag Milk Foods, a major private dairy player Invested in Whey Processing. Parag Milk Foods made significant investments in expanding its whey processing capabilities. Whey, a byproduct of cheese production, is a valuable source of protein and other nutrients. This move aims to create new revenue streams and utilize resources more sustainably.

• In August 2023, Nestlé India the Indian subsidiary of the global food giant Nestlé Expanded Local Milk Sourcing. Nestlé India increased its focus on sourcing milk directly from Indian farmers. This initiative strengthens their supply chain, creates opportunities for local dairy farmers, and helps ensure quality control.

 List of the prominent players in the India Dairy Market:

• Britannia Industries
• Dodla Dairy Ltd
• Gujarat Cooperative Milk Marketing Federation Ltd
• Hatsun Agro Product Ltd
• Heritage Foods Limited (India)
• Karnataka Cooperative Milk Producers Federation Ltd
• Kwality Milk Foods Ltd (India)
• Milk food Limited (India)
• National Dairy Development Board (India) (Mother Dairy)
• Nestlé SA
• Parag Milk Foods Ltd
• Punjab State Cooperative Milk Producers Federation Ltd (MILKFED) (India)
• Rajasthan Co-operative Dairy Federation Ltd
• Tamil Nadu Cooperative Milk Producers Federation Ltd (TCMPF) (India)
• Others

These key players are adopting various organic and inorganic growth strategies such as mergers & acquisitions, joint ventures, expansion, strategic alliances, new product launches, etc. to enhance their business operations and revenues.

The India Dairy Market is segmented as follows:

By Product Type

• Liquid Milk
  • Packaged Milk (Pasteurized, UHT, Flavored)
  • Unpackaged/Loose Milk
• Milk Products
  • Butter
  • Ghee (Clarified Butter)
  • Cheese
  • Yogurt
  • Paneer (Indian Cottage Cheese)
  • Ice Cream
  • Milk Powder
  • Condensed Milk
  • Others (e.g., buttermilk, cream)

By Distribution Channels

• Organized Retail
  • Supermarkets/Hypermarkets
  • Convenience Stores
  • Specialty Dairy Stores
• Unorganized Retail
  • Local Grocery Stores
  • Mom-and-pop Stores
  • Street Vendors
• Online Retail
  • E-commerce Platforms
  • Dairy-specific Apps
  • Home Delivery Services