During our childhood days buying milk was not as easy as today. We had to exchange empty milk glass bottles with filled ones every morning. Possibly it was more environment-friendly than today’s plastic packets.
Things have drastically changed in India for the good. There is an abundant availability of milk and milk products.
India is globally the largest milk producing country since 1997. (an estimated 400 million litre per day currently) and consumer of milk in the world. However, the per capita consumption is low and we consume milk, ghee, butter (other value-added products of milk – curd, cheese, frozen paneer, flavoured yoghurt, flavoured milk).
In India, the co-operatives and private dairies have access to only 20% of the milk produced. Approximately, 34% of the milk is sold in the unorganized market while 46% is consumed locally. This is in comparison to most of the developed nations where almost 90% of the surplus milk is passed through the organized sector [source].
Sunday’s Economic Times carried an article titled “White Revolution“, few highlights from various sources are mentioned below.
- India’s milk production in 2016-17: 163.7 million tonnes
- Dairy market size in 2016-17: India at $120 billion (organized sector $70 billion), global at $414 billion.
- Per capita availability of milk per day: 35 grams (Delhi), 291 grams (Karnataka), 351 grams (India)
- 48% of the milk produced per day is retained/consumed by the producer (used for producing value-added products)
- Cost of normal milk: Rs 36-40 / litre
- Per capita consumption of milk per year (2015-16): 97 litres (India), 285 litres (US)
- Cost of Premium milk: Rs 80-100 / litre
- Market share of premium milk: A mere 1%, expected to grow to 5% by 2020. In the US organic milk sales grew by 22% between 2010 & 2015.
As expected the market share of Premium Milk is very small. The cost is double and frankly, we don’t know if it is premium (especially organic).
Cows in O’leche Dairy Farms
Farms in India’s Dairy Sector
According to the National Survey of Milk Adulteration 2011, as much as 70% of the milk sold in the Indian market is adulterated and unfit for consumption. Hence, many have quit their good jobs to start their own ventures. The ideal size for a dairy farm – 25 cows.
- Aakshayakalpa: An organic milk farm with 2,000 cows in Karnataka (in and around Tiptur, Arsikere, Channarayapatna, Chikkanayakana Halli, Kadur and Holenarasipura). Supplies 15,000 litres a day against a demand of 51 lakh (5.1 million) litres a day for Bangalore alone. The company is earning a turnover of 1.75 crores per month out of which 60-70% is paid to the farmers.
- Astra Dairy Farms: Delivers organic milk, ghee, paneer in Chennai.
- Binsar Farms: Sonipat, Haryana.
- Happy Milk: Delivers milk & curd in Bengaluru.
- O’Leche: Organic milk delivered in Delhi, Noida.
- Parag Milk (Pride of Cows): Delivers 25,000 litres per day to Mumbai, Pune, Surat.
- The Milk Co (Keventers): Has 400 cows, currently supplies 1,000 litres a day in NCR area.
- Vrindavan Milk: Delivers organic milk, ghee, buffalo milk, paneer in and around Bangalore.
- Whyte Farms: With 200 cows in Alwar (in Rajasthan, near Delhi), delivers milk within 8-12 hours of milking
Technical Companies in India’s Dairy Sector
- Stellapps technologies Pvt. Ltd: India’s largest Dairy IoT Company, provides automated milking machines.
Which are the other startups working in this area? I would like to add their names to the list above.
Conclusion
It is good to see professionals entering the dairy sector (Holy Cow!). With the buying power of the middle class on the rise, parents want to give the best to their children. I have seen that is the case with many couples with one child (“We wanted to give the best education, nutrition to our child, hence decided to have one child only”).
The price of the premium milk is immaterial, there seems to be a market for that high priced organic milk. People are willing to spend on such products. The more the people spend on such products, the better for the economy.
