Challenges galore spliced with consumer trends that favour growth and the entry of cost-efficient and highly productive technologies in the global dairy farming sector are throwing up a host of opportunities.
Global dairy products industry continues to be one of the most dynamic markets worldwide. High competition and high market fragmentation is leading to increased consolidation in the dairy industry.
The global dairy products industry continues to be one of the most dynamic markets worldwide. The global dairy industry was affected by the global economic downturn, changing weather conditions in export countries, and varying feed and other input costs.
High competition and high market fragmentation is leading to increased consolidation in the dairy industry. Larger dairies are taking over smaller dairies that are facing problem in operations. Moreover, companies are increasingly going for mergers and tie-ups to remain competitive in the market. Major factors driving mergers and acquisitions in the dairy sector include the drive to enhance economies of scale, increasing profit levels, and reducing overheads. The consolidation trend is more pronounced in Europe. The dairy industry, being highly fragmented, comprises large MNCs as well as small but significant players. With an increase in the concentration of the industry, there is a trend towards increasing brand value, market share, and international presence and acceptance. In a highly competitive scenario, companies need to brace themselves for pro-active business policies
The dairy farming industry world over is switching to emerging technologies that enhance production, profits and sustainability. In addition, consumer trends that shifted in favor of healthy and hygienic high-protein food options is driving the technologists into readiness for coming out with more innovations.
In the long run, strong technological capabilities coupled with in-depth knowledge of consumer insights from various local markets will play a pivotal role in increasing bottom lines for the dairy farming players in the global markets.
Currently, the emphasis is on usage of safe delivery modes that aid healthy eating and increased intake. These trends are also compounded by the increased use of online and mobile purchase transactions. Dairy products act as a cheap source of protein and call for retailers to upgrade technology use to customize dairy products to end-user requirements and also deftly manage inventory to bridge supply-demand gaps that occur in smaller outlets.
Consumer trends in dairy industry have made way for demand patterns changing and consequently, the entire value chain stands impacted. For example, expansion in production of milk has globally slowed down. Regional studies indicate that high feed prices and high opportunity costs for pastures have contributed to this feature in several instances.
The trends prevailing in traditional milk producing nations too augur well for the industry. In India normal growth is expected to be sustained. Neighboring Pakistan is faced with prospects of increased production that will get absorbed domestically. Brazil is slated to overtake the rest or at least occupy the place of second largest producer of milk.
The dairy farming industry in India plays a multi-tasking role. It employs a significant number of people from the rural sector and rescues landless labourers, small farmers from financial throes by augmenting their meager family earnings. The dairy industry in India also buffers the impact of unfavorable climate situations and calamities of nature.
India ‘s dairy industry is expected to maintain 15 per cent compounded annual growth (CAGR) over 2016-20, and attain value of Rs 9.4 trillion on rising consumerism. India has progressed from being deficient in milk production at 20 million MT in 1970 to becoming the world’s largest milk producer at 160 million MT, accounting for 18.5 per cent of global milk production.
India is expected to emerge as the largest dairy producer by 2020. To sum up, Indian dairy industry has witnessed a robust growth during the past three year. The dairy sector has maintained an impressive record of growing at more than 5% per annum. The major contributors happen to be small and marginal land-holding farmers and landless laborers. In most cases it serves to supplement incomes and provide rural families with comfortable financial health.
It has over the years graduated from a rural cottage industry to semi commercial dairy and finally transformed itself into a full-fledged commercial endavour. Today there are a large number of milk and milk product factories. More and more of these units are entering the organized sector category. On the flip-side the dairy movement and industry has to accelerate in regions of low productivity like the Eastern and north Eastern parts of India. A flowering trend has emerged in this weak area with private firms beginning to mobilize the farming community to engage in modern technology and high productivity dairy farming techniques.
The metamorphosis of this continuing phenomenal success story dates to more than four decades back when the Union Government chalked out executing a project named Operation Flood. From then on there has been no looking back for the Indian dairy industry. From a future perspective, Indian dairy industry will be adequately equipped to elevate the rural economy pan India to a status of mature entrepreneurship. India is the land of milk and honey.