The first White Revolution, brought to its culmination in the 70s-80s by ‘Operation Flood’ and the dairy co-operatives movement built by Dr Kurien, changed the context and the ethos of Indian dairy industry. We have come a long way since then – India is now the world’s largest milk producer, accounting for about 17 per cent of global milk production. It is also one of the world’s largest consumers of dairy products.
The question now is what next? The Indian consumers are fast developing a mature palate in terms of taste, quality, variety and nutrition quotient of dairy products they consume. There is increasing awareness about impact of food on health, and thus increasing demand for toxin-safe environment-friendly products and practices. Fair trade, buying locally produced goods to reduce carbon footprint and ensuring welfare of farmers are no longer the topics limited to conference discussions, but active concerns of families consuming milk products. And yet, compared to mature dairy markets from the developed world, we still see a gap in India in terms of availability of value-added, innovative dairy products and categories. A wide variety of premium-quality, flavourful, healthy and nutritious dairy products that address the needs of different customer groups are still missing from the supermarket shelves, even in tier-I cities. One of the major reasons for this gap is the need to shift our focus from the traditional back-end – the supply side – to the front-end: it’s time to focus on building demand. Milking the opportunity for what it’s worth This approach has made the dairy production more profitable for the farmers – as value-added milk products gain higher market share, the farmers get better pricing for their quality output, leaving them with more capital to invest in scaling up, improving yield and quality. In India, on the other hand, the supply has scaled up but without an equivalent development in demand of value-added products – we still lag behind in producing high-quality value-added dairy. Majority of the milk we produce in India is consumed as-is, with only a small share of it used to make value-added products. Value addition in terms of processing and developing into high-value products is still very limited in scale and scope. If we want to build a modern, flourishing dairy sector, ensure our dairy farmers benefit more and spread their wings to expand business, we need a 2-pronged strategy: • Demand generation for value-added dairy products across cities and towns in India A case for elevating the demand game But, to use Bob Dylan’s words, the times are a-changing. As India’s middle class gains more purchasing power and internet-enabled global exposure, the demand side is evolving much faster than ever before. We, as an industry, need to get our arms around this shape-shifting beast and capitalize on the latent opportunity by building new categories and path-breaking products that hit the right spot for our evolving consumer. How do we make this happen? Through a well-orchestrated, industry-wide effort. A few strategies come to mind: • The B2C edge: as an industry, we need to prioritize demand generation and embrace the fast-paced innovation and market-focused agility of other food and FMCG segments. Positioning dairy as healthy, nutritious, wholesome food group and building consumer awareness about variety, quality and sustainability is crucial. Supportive governments hold the key The governmental support in creating the right infrastructure – such as consumer research facilities and testing labs that can assure highest standards, training and resource centres for dairy farmers, support for tech integration in dairy supply chain – will empower the dairy industry further. A national initiative to re-imagine milk in various innovative, value-added products as healthy, safe, sustainable and ‘cool’ food group, especially for the younger generation will go a long way. While the support from governments is crucial, White Revolution 2.0 is contingent upon the dairy industry’s will and push to reinvent itself. That’s the only way to maintain and enhance India’s global leadership as a dairy powerhouse. |