Challenges faced by Dairy MarketBy Hansel D’Souza

August 1st, 2016, Lagoona Resort, Lonavla

Currently farmers in Odisha are being paid beteween

Rs. 19.96 – Rs. 25 per ltr.

for cow’s milk.

Supply & Demand

Rules of Demand & Supply

1. Demand increases, Supply unchanged, Price higher

2. Demand decreases, Supply unchanged, Price lower

3. Demand unchanged, Supply increases, Price lower

4. Demand unchanged, Supply decreases, Price higher

P1

P2

P3

Q1

Q2

Q3

Demand

Price

Quantity

Supply

Possible Reasons Glut of SMP in global market

Slump in SMP global price

Indian SMP exports fell from 1,30,000 MT (2013-14) to 30,000 MT (2014-15)

Recombined liquid milk causes slump in fresh liquid milk price in India

Source: FSA India-The Milk Crisis 2015

Dairy Growth

40%

41%

19%

Milk Consumption

Farmers Household ConsumptionUnorganised Dairy MarketOrganised Dairy Market

Source: CRISIL data

Milk Processing in India

Commodity Processing Pack Brand

Market decides the price

IncreasedShelf Life

Value Realisation

BrandValue

Evolution from Commodity to Brand

Seller decidesthe Price

Created by Hansel D'Souza:hansel@aquila.net.in

Low Shelf Life High Shelf life

Buyer decidesthe price

Commodity Brand

Production of Onions 18.77 MMT(in the Year 2013-14)

Se-ries

1

0

2

4

6

8

10

12 Price

Production of Potatoes 46.61 MMT(in the Year 2013-14 )

10

12

14

16

18

20 Price

Out of 6500 cold stores in India 80% were filled with potatoes

You can’t refrigerate onions because they get dehydrated and lose weight

The Reason

Adding Value

The key lies in rapidly transforming milk from commodity to brand through the process of Value Addition, thus :

Stabilizing Price by converting seasonal increase in supply into future sale

Making protein available at an arm’s length of desire

In a form that provides ease of use

•Cheese•Lassi / Buttermilk•Khoa / Paneer•Flavoured Milk

Ready2Eat Products

Emerging Consumer Demand

Expenditure on Animal Protein

Expenditure on Milk

India’s Favorite Protein Milk is India’s most

favoured animal protein source

Universally accepted

Easily available

With potential to grow

Rapid Growthin Demand

Household Income growth across India