THE BIG MOO-VE

The dairy industry is reinventing itself - milking consumer cravings and tech waves for richer returns

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The Indian dairy sector, which accounts for nearly one-fourth of global milk production, is at the cusp of a major transition. India has been the number one milk producer in the world since 1998. With changing demand-supply dynamics in recent years, the Indian dairy sector is now aggressively shifting toward the value-added products (VAP) market.

The growth in milk production has been remarkable, especially in the last decade. Between 2014-15 and 2023-24, milk production rose by 63.56%, from 146.3 million tonnes to 239.2 million tonnes. In value terms, the milk produced is worth around ₹11 lakh crore. With higher supply, per capita milk consumption in India stands at 480 grams per day, far above the global average of around 370 grams.

Indeed, India's dairy sector has made huge strides, considering the country produced less than 21 million tonnes of milk with per capita availability of only 124 grams per day in 1950-51. Thanks to Operation Flood - the period from 1970 to 1996 - India not only became self-sufficient in milk but also started exporting milk products.

The Indian dairy sector plays a crucial role in ensuring the livelihood of around 8 crore farmers. Around 12%-14% of agricultural income comes from dairying, significantly supporting the rural economy. India has the world's largest livestock population, with 536.76 million animals, including 303.76 million bovines and 148.8 million goats. The dairy industry contributes over 6% to the country's GDP.

India's milk production is supported by a robust dairy cooperative system. The industry is divided into organized and unorganized segments. The unorganized segment, with a 70% market share, consists of traditional milkmen. The organized segment - comprising cooperatives (around 15% share in value terms) and private dairies (another 15%) - dominates the VAP market.