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Kulfi, rosogulla, sandesh – Demand for dairy products gets sweeter
Tuesday, July 16, 2013 IST
Harcha Bhaskar, Mumbai

India is said to be the highest milk producer in the world. And hence it is also known as the largest and fastest-growing milk and milk products' market.

Further, the dairy industry in India has been witnessing rapid growth with liberalisation. As the economy provides good opportunities for foreign investors to release the full potential of this industry, the main objective of the Indian dairy industry is to manage the national resources in a manner enhancing milk production and upgrading milk processing using innovative technologies.

In fact, milk production is the most important activity in the Indian agricultural sector. According to research by FAO (UN’s Food and Agriculture Organisation), at the national level, around 17% of the total value of agricultural production is derived from this sector. Its importance is further highlighted if the closely-linked other livestock (meat, poultry, wool and hair) sub-sectors (accounting for a further 8.3%) are taken into consideration. The milk sector generates a high proportion of agricultural output, especially in the northern and western parts of the country.

The background
Milk production in the country was stagnant during the 1950s and 1960s and per capita availability declined. However with the implementation of the Operation Flood (OF) programme in 1970 and other dairy development programmes implemented by the state and Central governments, increased demand driven by increased population, higher incomes and urbanisation, and with tight controls on imports of dairy products, milk output increased substantially in the country. This evolution was accompanied by an even more marked improvement in milk yields. India has emerged today as the largest milk producer in the world, surpassing 80 million tonne, and this success story of Indian milk production has been written primarily by millions of smallholder producers. The OF programme was instrumental in creating strong linkages among millions of smallholder producers and urban consumers. Prior to OF, the link between the producer and consumer was completely missing.

The trends
The share of fat-based products like ghee showed a declining share, and that of Western products like cheese and ice cream witnessed an increasing trend and is expected to increase further due to changes in food habits, marketing strategies, income levels, changes in demographic factors, and so on.

Besides these, the key trend, which is emerging in dairy products, is functional food. Thus the trend is about food that is more nutritious for health. “There are various functional foods, which are made up of dairy ingredients with the mixture of food materials like cereal, fruits and vegetable components, comprising lots of iron. These are more in demand as they are good for cardiovascular and diabetic patients,” stated Dr Latha Sabikhi, senior scientist, dairy technology division, National Dairy Research Institute (NDRI).

The demand
The demand for livestock products, especially milk and meat, in India, has increased considerably in recent years, and has strong potential for further growth. Several socio-economic indicators underlie this trend. The per capita consumption of milk in many parts of the country is low compared to minimum nutritional standards and to that of many developed and developing countries.

“There is demand for traditional dairy products like heat-desiccated products - kulfi, rabri, basundi, khoa; acid heat-coagulated products - paneer, channa (rosogulla, sandesh, pantua, rasmalai,” informed Dr Vijay Kumar, senior scientist, NDRI. Other popular universal dairy products are cheese, ice cream, yoghurt, table butter and milk powder.

Dairy products packaging
With the development of dairy segment, packaging patterns are also improving, as consumers prefer easy handling and safe packaging. The consumption of packaged Liquid Dairy Products (LDP) has been growing constantly in urban areas. Health concerns and a desire for greater convenience are fueling the development of packaging trend, particularly long-life packaged milk, which does not require refrigeration or preservatives. Milk and other dairy products have been increasingly used in packed form in either pasteurised plastic pouches or cartons for safety, and convenience.

According to research report - India Dairy Industry Analysis, India is the world’s largest milk producer. It is also one of the largest producers as well as consumers of dairy products. Due to rich nutritional qualities, the consumption of dairy products has been growing exponentially in the country, and considering such facts and figures, our study anticipates that the milk production in India will grow at CAGR (Compounded Annual Growth Rate) of around 4% during 2011-2015.

“The India dairy industry is constantly working to adopt innovations for packaging of dairy products. At present, innovative packaging that is followed by the Indian dairy industry is edible packaging and active packaging,” pointed out Dr Kumar.

The challenges
On a concluding note, Dr Sabikhi stated, “Technology-wise we must overcome with more advanced organised systems as far as packaging, production and processing skills of the milk and milk products are concerned,” and added, “Though India is the highest producer of milk and milk products, compared to Western countries we adopt only 15% -20% processing skills. Other than this, as we have climatic diversity, and there should be better cold chains to store and preserve the dairy products. As most of the milk production concerns rural India, farmers need to be trained and educated for better and clean milk production.”



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