Value added products will bring the next revolution in dairy sector

The Indian dairy industry is at the tip of another major revolution.

The overall dairy market, currently valued at Rs 5 trillion as per Edelweiss Securities, is pushing to change from just plain liquid milk to a VADP (value added dairy products) market and from unorganised and local to more of a structured and branded market.

Contrary to popular belief, Indian consumers today are far more value-conscious than price sensitive. They value superior taste, the power of real ingredients and a strong health proposition. Adapting to this current trend has led the industry to grow and reach out to the new age populace.

The premium dairy product market currently holds a share of 8-10% of the organised dairy industry and is expected to grow at a pace of 6-8% year-on-year; and reach a market share of up to 20% by 2021, as per reports.

Dairy alternatives launch

“We originally launched Greek yogurt as a complementary business to the highly seasonal ice cream space. However, we received immediate traction and strong consumer interest,” says Rohan Mirchandani, CEO & co-founder, Drums Food International, makers of Epigamia, while adding that the reason for this success is that today’s consumer is discerning with his/her choices, especially when it comes to food.

Also read : Epigamia launches 100% plant based yogurt line

Similarly, Life Health Foods ventured into Soy and Almond milk. “Today a health-conscious Indian chooses an option with non-dairy/plant- based milk products like almond milk, soy milk, coconut milk etc because of its known benefits like zero cholesterol, low calories and high protein depending on the requirement,” says Rohit Bhagat, business head at the company.

Targeting consumers aged over 25 years in metros and other Tier I cities, VADP companies across the board agree that digital plays a very important role in their marketing plans. They, however, do not want to negate the power of word of mouth.

For the Indian consumer, packaging plays a very important role in product satisfaction. When the company is providing an opportunity to consumers to experience their premium product range, it is equally important for the brand to package it in a way that grasps consumer attention and ensures that they get quality for the price they are paying.