Last fortnight was full of news related to pressure on large dairy/food companies to hike prices, clouds of drought over the dairy industry, Demand of farmers groups to fix MSP for milk also , FSSAI building a strong regulatory foundation for fortification and organic labeling ,Indian companies looking at gulf market and Tata funds eyeing 23 % stake in Dodla dairies, etc.
With a lot of news coming on possible drought in milk production from western and southern regions and stocks of SMP getting depleted in winter only for reconstitution by the large dairies, the question of the hour is whether India would be able to meet its targeted production of milk of 163.74 Mln ton in 206-17. The results till October 2016 have shown satisfactory growth but the results of November to March are still awaited. Let us see the effect of combination of economic factors like Frozen wallet (demonetisation) and environmental factors like global warming bring for Indian dairy industry this time.
However the following news has taken me by surprise and I would like to focus on it as a news of the fortnight :
News of the fortnight :Edible oil surpassed packaged dairy market this year
This news though looks so simple but needs to be looked from long term perspective. A few years back when FAIDA report ( Mckinsey-CII) was published on packaged food industry then packaged milk was a star with large market size in high growth market . Edible oil market size was huge but growth rate was low. Now Edible oil topping the list in packaged food and overtaking the complete dairy segment ,is clearly a signal for the consumer trend towards alternate sources of cost effective nutritional staple food.Desi ghee or dairy based edible oil in packaged form is hardly 5 % of the total edible market in organized sector.
Does it mean that some other dark horses are also trying to take over some other dairy categories ( e.g Coconut water /Fruit flavored beverages against fermented milk products, imitation cheeses against dairy based cheese spreads, Juices/nectars against milk, margarine/vegetable oil based products against butter, Frozen desserts against Ice creams (already happened). This way I also see that non dairy whiteners may also come from now where to take on two segments of dairy whiteners in powder as well as tea special milk varieties ( mainly double toned milk) . Such non dairy whiteners in beverage forms are already available in our neighboring country in tetra pack and are quiet popular.
I leave all of you with these food for thoughts for the next fortnight.
It is a great time of dairy events with IDA event at Mumbai which got over on 18th, Gulfood which is going on at Dubai currently and Aahar 2017 from March 7th to 10th.
So you may plan your this week and next week accordingly for learning and networking.
Happy e reading
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)