Dairy News 7x7 logo

Safe Milk Labs

India’s milk production could reach 300 Billion Litrs by 2030

India milk production 300 billion by 2030 dairynews7x7

India contributes to over 25% of global dairy production and has consistently held the top position as the world’s largest milk producer since 1997. In FY23, the country produced around 231 million tonnes of milk, registering a growth rate of 6% CAGR over the period. past decade. A report by NITI Aayog predicts that the country’s milk production will be around 300 million tonnes by 2030. On the other hand, Indian households spend nearly 45% of their food budget on dairy and packaged foods, a trend that is steadily increasing, says a research report by Investec Research House.

According to a study by the International Market Analysis Research and Consulting Group (IMARC), the dairy market in India was estimated to be worth ₹13 lakh crore in 2021. Over the past 15 years, the market has shown a steady growth of around 15% CAGR, and according to IMARC, the leading market research firm, it is expected to reach a market size of around ₹31 lakh crore by 2027.

India is therefore both the largest producer and the largest consumer of dairy products in the world.

The Indian dairy industry

In India, about 46% of the milk produced is consumed locally or sold to non-producers in rural areas, while the remaining 54% is for sale to organized and unorganized players.

The Indian dairy industry is largely dominated by the unorganized sector, which holds a 60% share of the fluid milk market. Nevertheless, the organized sector is making progress and its share has increased from 32% to 40% in the last three years. The Department of Animal Husbandry & Dairying (DAHD) predicted that the share of the organized sector will grow to 54% by 2026. Moreover, the inflow of capital investments from cooperatives and private players will enable them to establish a strong presence and capture market share from the unorganized sector, the Investec report added.

Currently, the fluid milk segment accounts for around 61% of the total Indian dairy market, while traditional value-added products contribute 34% and emerging value-added products account for the remaining 5%. The fluid milk market is expected to grow at a CAGR of 9% over the next five years. Traditional value-added products like paneer, ghee, ice cream, khoa, curd, etc. are expected to grow at a CAGR of 14%, and emerging value-added products like cheese, flavored milk, lassi, buttermilk, etc. are expected to grow . growing by more than 19% per year.

Growth potential for dairy in India

Despite India being the largest consumer of dairy products, per capita consumption is low compared to global standards, indicating huge potential for demand growth.

The growth on the demand side is driven by a growing population, changing lifestyle patterns, increasing disposable incomes and increasing health consciousness.

The supply side is also evolving through technology, changing business models and product innovation. While the traditional Indian dairy industry is hyper-local and unorganized, its modern avatar is getting organized, consolidating to build a wider distribution network and innovating in value-added products.

As consumer demand expands from traditional fluid milk to value-added dairy products, private players can benefit. Furthermore, industry consolidation is expected to further support the growth of private dairy companies, positioning them as viable alternatives to larger cooperatives, the Investec report said.

The organized sector is steadily gaining an upper hand over the unorganized sector due to urbanization, increased reliance on branded goods and increasing demand for value-added dairy products due to changes in dietary habits and lifestyles. This transformation presents opportunities for private companies that offer a wide range of products and can quickly adapt to changing consumer preferences.


Advertisement · Scroll to continue

India’s dairy consumers, future trends

India’s per capita income was $2,600 per year in 2023. The International Monetary Fund (IMF) predicts that this number will reach approximately $4,000 by 2028. This increase in income levels is expected to result in the addition of about 14 crore middle-income earners. households and 2.1 crore high-income households in India, by 2030. Moreover, the share of middle-income households will increase from 54% in 2018 to 78% in 2030. The growth in income levels is expected to lead to higher disposable incomes and drive consumer preference for high-quality and nutritious food products such as milk and dairy products, the Investec report said.

Moreover, India’s latest National Family Health Survey, 2022, highlights that households in the country spend a significant portion of their budget on the food segment. The study also highlights a steady increase in discretionary spending within the food segment over the past two decades, with consistent growth in dairy products

Share :

Read Next

Sorry, your ID is maybe not correct (If you did not place any ID that means auto-detect does not work.). And please make sure that your selected element is developed with Swiper.