India currently represents the world’s biggest market for milk and milk products. In light of its growing population, higher incomes and growing health consciousness, the demand for milk is steadily increasing in the country. According to IMARC Group’s new report titled, “Dairy Industry in India: Market Size, Growth, Prices, Segments, Cooperatives, Private Dairies, Procurement and Distribution”, the total production and consumption of milk during 2014-15 reached 147 Million Metric Tons and 138 Million Metric Tons, respectively.
The report finds that despite a robust growth in the production and consumption of milk, a large share continues to be distributed through the informal or unorganised channels in India. As distribution is the final stage in the marketing of milk and milk products, the facilities for distribution should ensure that the quality of the products are maintained, along with its timely supply. The report finds that currently around 80% of the total milk produced is distributed through the highly fragmented unorganised sector, which includes local milk vendors, wholesalers, retailers, and the producers themselves. On the other hand, the organised dairy industry distributes the remaining 20% of the total milk produced.The report has also identified several challenges in the distribution of milk products in India. According to the report, one of the biggest challenges faced by the dairy industry is the uneven distribution of cold chain facilities throughout the supply chain. This often results in the perishability of the product due to longer times taken in reaching the facility and the end consumers. Other challenges in the distribution of milk products include - low penetration into the rural market, lack of proper transportation infrastructure, lack of awareness on good distribution practices, etc. According to an analyst at IMARC Group “although the organised dairy sector in India has several retailers and distributors, there is still the need for an organised network of distributors to help reduce the distribution costs by standardising the distribution process”.
Apart from the distribution system, the report also gives an insight into the other aspects of the dairy industry in India such as the market size, market segments, key players, prices, procurement, government policies, trade, etc. The report which is based on both desk based research and multiple waves of primary research is a must read for anyone who plans to venture into the dairy industry in any form.
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