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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:[email protected]
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
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