Strategic Analysis of Ice – Cream Industry of India

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  • Topic: Milk, Dairy farming, Dairy product
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Indian Scenario – dairy industry

India has one of the largest livestock population in the world. Fifty percent of the buffaloes and twenty percent of the cattle in the world are found in India, most of which are milk cows and buffaloes.

Dairy development in India has been acknowledged the world over as one of modern India’s most successful developmental programme. Today, India is the largest milk producing country in the world.

Milk and milk products is rated as one of the most promising sectors which deserves appreciation in a big way. When the world milk production registered a negative growth of 2 percent, India performed much better with 4 percent growth. The total milk production is over 72 million tones and the demand for milk is estimated at around 80 million tonnes. Dairy Cooperatives account for the major share of processed liquid milk marketed in the India. Milk is processed and marketed by 170 Milk Producers’ Cooperative Unions, which federate into 15 State Cooperative Milk Marketing Federations. Over the years, several brands have been created by cooperatives like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan). Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur).

India prepares to tackle the international market following Japan, where milk consumption today, has more than trebled to 70 kg per capita from a mere 20 kg in the 'sixties - the consumption of dairy products in other Asian 'tiger' nations is also growing. As a consequence - creating excellent export opportunities for India, as these nations are deficient in milk by at least 3 million tonnes per year. India, with some 27 per cent of Asia's population, accounts for more than half of the milk output with enough growth potential to explore foreign markets. In anticipation of the export opportunities and in view of the post GATT scenario, India is gearing up to tackle the demands of the international market.

Overview of the Indian Dairy Sector
The country is the largest milk producer all over the world, around 100 million MT •Value of output amounted to Rs. 1179 billion (in 2004-05) (Approximately equals combined output of paddy and wheat!!) •1/5thof the world bovine population

Milch animals (45% indigenous cattle, 55 % buffaloes, and 10% cross bred cows) •Immensely low productivity, around 1000 kg/year (world average 2038 kg/year) •Large no. of unproductive animals, low genetic potency, poor nutrition and lack of services are the main factors for the low productivity •There are different regions – developed, average, below average (eastern states of Orissa, Bihar and NE region) in the dairy industry

Industry segment – Ice cream

The ice cream market in India is estimated to have reached the level of Rs. 10 bn per annum, of which the organized.

ICE – CREAM Sector is about Rs. 6 bn. The unorganised market has been shrinking. The per capita ice cream consumption in the country is extremely low at 250 ml per year compared with that of the US, which is about 22 litre.

The organised market for ice creams of about 60 mn litres, has been growing at around 15% per annum. The ice cream industry has, in a short span of time, undergone a structural transformation.

The Indian ice cream industry is currently estimated to be worth Rs. 2,000 crores, growing at a rate of approximately 12% .

The ice cream market in India can be divided into: the branded market and the grey market. The branded market at present is 100 million liters per annum valued at Rs. 800 crores. The grey market consists of small local players and cottage industry players.” In 2008-09, in the branded ice cream market, Amul held the number one spot, with a market share or 38%, followed by Kwality Walls at 14%, Vadilal at 12% and Mother Diary at 8%. . Despite a decent growth rate, the ice cream industry faces the challenge of low per capita consumption.

Industry at a glance

The per...
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