INDIA - A new whitener product is being released into north eastern India's $80 million market by one of the country's major dairy processors.
Mother Dairy has targeted growth potential with the launch of Dailycious in a region reported to be growing 15 per cent year-on-year expansion.
Across India, the national whitener market is worth $315 million.
There are already two well established brands in the North East market - Amulya from Amul and Everyday from Nestle.
A subsidiary of the National Dairy Development Board, Mother Dairy Fruit and Vegetables Private Limited (MDFVPL), is targeting $10 million to $11 million (Rs 60-70 crore) business in first year of launch in Northeast and $20 million (Rs 150 crore) all over the country.
Basu said that after the launch, Dailycious brand will soon be launched in other parts of the country as well. The product is being manufactured at the company's newly set up $25 million plant in Etawah in Uttar Pradesh.
Adding further, Basu said that the product will meet and exceed the consumer expectations on key product attributes such as colour, taste, miscibility and cuppage. Apart from this, the company is also presently undertaking a research in the region to gauge the customer needs and taste for its yoghurt brand 'Misti Doi'. The company has also launched three other products in the value-added dairy beverages segment - lassi, milk shakes and butter milk.
The company is currently shipping in around 300-400 kg of Misti Doi brand from its Kolkata-situated plant daily to Northeast. Mother Dairy may touch $1.09 billion (Rs 7000 crore) revenue mark in 2014-15, as compared to $986 million (Rs 6300 crore) revenue during the 2013-14 financial year. India is among the fastest growing dairy markets in the world and has become the largest global producer of milk, since FY13. Domestic milk production grew at 4.3 per cent CAGR, to nearly 134 billion litres in fiscal year 2013-14 and, according to CRISIL, which is projected to end fiscal year 2014-15 with 140 billion litres.
The growth in milk production in India outpaced other large milk producing nations such as US and China, which grew at 2-3 per cent CAGR in the past five years. On the flip side, consumption in India is growing at 5 per cent, leaving a gap between demand and supply.
Currently, about 42 per cent of the total milk produced in India is purchased by consumers directly from milk farmers in a raw form, which makes is a highly fragmented market. The remaining 58 per cent goes for processing and is sold as processed milk and milk products.
The processed dairy industry in India was estimated to be around $57 billion to $58 billion (Rs 3,65,000-3,70,000 crore) in the year ended March 31, 2014, of which milk products accounted for around $23 billion to $24 billion (Rs 1,49,000-1,53,000 crore), according to CRISIL, a global analytical company providing Ratings, Research and Risk & Policy Advisory services.
Paneer and khoa (32 per cent), ghee (30 per cent) and curd products (22 per cent) account for the major portion of the milk products segment.
The processed milk and milk products segment is expected to record about 12-13 per cent Compound annual growth rate (CAGR) between during FY 2013-14-FY2016-17 driven by changing lifestyle of consumers, growth in the food services industry, increasing urbanisation, rising need for convenience, better health awareness among end users, etc.
CRISIL estimates that while demand for processed milk grew by 5.3 per cent CAGR in FY10-FY14, realisations rose by about 9-10 per cent CAGR in the same period. As a result, the processed milk segment recorded 14-15 per cent CAGR, reaching $33.81 billion to $33.97 billion (Rs 2,16,000-2,17,000 crore) during 2014-15, estimates CRISIL.
Milk prices are expected to rise by 7-8 per cent CAGR over the next three years, primarily driven by an increase in fodder prices, which in turn, are expected to be driven by a similar rise in minimum support prices of key crops.
Overall, the segment is expected to grow by 12-13 per cent CAGR, in terms of value to reach $48.53 billion (Rs 3,10,000 crore) by fiscal year 2016-17, according to CRISIL.
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