How Pizzas Are Changing The Shape of India’s Dairy Industry

indian cheese dairy

Consumption of dairy products has been an integral part of the Indian economy for quite some time now. This industry, though, is going through many changes.

Consumption of dairy products has been an integral part of Indian diets for some time now. But things are changing, with Indians consuming dairy products differently. This shift in consumer preferences has resulted in the increase of the production of new age dairy products, giving rise to new business oppurtunities for dairy companies.

BOOM spoke to Pritam Shah, Managing Director of Parag Milk Foods, who had some interesting insights in the changing patterns. Here are five key takeaways:


  1. Demand for new-age products: People are willing to and constantly trying out different dairy products in the market. As a result, dairy players are seeing a rise in the demand for value-added products like flavoured dairy products and variants of cheese.The craze for pizzas, for example, has led to an increase in the consumption of various types of cheese like Scottish cheese. In fact, for private players like Parag such value-added products amount to 80% of their total sales.
  2. Technology & dairy: With the change in consumption, industry players have to change their production models to meet this rising demand. This is where technology comes in.Companies are using advanced technology to increase their production yields. Interestingly, they are also using technology to ensure longer preservation of products. This further ensures quality delivery and preservation of taste to the end consumers.
  3. Packaging strategies: Another new trend in the industry is the change in packaging of products. One key reason behind this change is that dairy products are perishable in nature. As a result, people want smaller packets that they can buy on a regular basis.Companies are also looking at innovative packaging materials that can help increase the shelf-life. This is why you can see a definitive rise in tetra packs on the shelves, especially for products like buttermilk, flavored milk and yogurt.
  4. Purchasing power: Indians are – as we all know - very conscious of price. This affects the dairy industry too. In fact, this is another reason why companies are shifting to smaller packaging.“People in rural areas prefer small packets of milk due to his or her lack of purchasing power and storage capacity,” says Shah. Thanks to which dairy companies now concentrate on one-time consumption dairy packets of cheese, paneer and buttermilk as well.
  5. Transport facilities: It only takes milk half a day to get spoilt unless refrigerated. That is how perishable it is. The same goes for other dairy products, which have a short shelf life as well. This is why it is important for dairy products to be transported to consumers as quickly as possible.However, a smart transport system is still a work in progress. To avoid such problems, private dairy players use deep freezer vans to preserve the quality and taste of the products.


India's dairy industry is estimated to be worth around Rs 75,000 crore annually, which is the organised part of it. The entire dairy industry, including unorganised - is worth over four times that. India produced around 146 million tonnes of milk in 2014-15 , making it the largest in the world and representing close to 20% of global output.

Around 40% of India's produce is retained by farmers, according to this report. Another 41% is with the unorganised segment while the remaining 19% is procured, processed and sold through organised dairies, according to a Business Standard report. The revenue share of the organised part of the dairy industry could grow upto 25% by 2018, from around 18% currently, a recent report from rating agency Crisil said.

Gujarat Co-operative Milk Marketing Federation, maker of the popular Amul brand of milk and dairy products clocked a turnover of Rs 23,005 crore for the year 2015-16. This was 11% higher than the previous year, a sign of the growing fortunes of the industry.

Next time you bite into the pizza, take a moment to reflect on the long and complex journey that led to the making of the cheese on it and, of course, India's burgeoning dairy industry to which you are contributing quite significantly.

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