Business Opportunity – Dairy Products

The Indian dairy industry[1] estimated to be Rs 80,000 Crores and is growing at a compounded annual growth rate of 7%. The growing demand for milk and milk based products is also reflected in increasing per capital availability of milk, which has grown from 225 gms/ day in the year 2007 to 307 gms/day in the year 2015 [2]

Opportunities for small enterprises:

The sector can be broadly be divided into two categories, packaged liquid milk and milk based value added products (see below)

On the other hand, value added products such as flavoured milk, cheese, ghee etc offer an attractive opportunity for small enterprises as they can be started with relatively lower capital (Rs. 50 lakh onwards) and have higher profitability vis a vis packaged milk.The packaged liquid milk segment is mostly dominated by large dairies such as Amul, Heritage, Vijaya, etc. as it requires access to large number of dairy farmers, infrastructure to transport milk and sizable distribution network.


Flavoured milk:Flavoured milk is one of the fastest growing dairy sectors in the market, because of its popularity among children and teenagers. The milk comes in various flavours such as chocolate and fruits, thus combining goodness of milk with taste. Flavoured milk market size in the year 2015 was at Rs. 2,466 crores and it is expected to grow at CAGR 28 percent.

Organic milk: Organic milk comes from cows that have been grazed on pasture that has no chemical fertilisers, pesticides or agrochemicals.   Increasing awareness about consumption of chemicals and pesticides through milk is contributing to the demand for organic milk.

Though being at a very nascent stage, this sector has seen some action recently with the entry of number of dairy farms in Pune and Mumbai focussing exclusively on organic milk. Further, established dairies such as Parag Dairy have also entered this segment with their brand “Pride of Cows”.

Value added dairy products: Nearly 55% of the milk produced in India is used for manufacturing value added dairy products[3]. More details on value added products are available in the table below.[i]


How can we help?

We can help you start a dairy based business or expand your existing dairy related business through a number of services including business viability assessment, market landscaping and expert consultation.

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Phone:800 888 4932


[1]  As per the report by Alvarez and Marsal ( The branded market for dairy products is estimated to be Rs. 80,000 crores. The data for the market size of value added products has also been sourced from the same report.


[i] Report by Alvarez and Marsal

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How can we help?

FineTrain enables entrepreneurs to assess and understand new business opportunities. Our services include market research, business feasibility studies and business diagnostics. We can help you generate sales leads and find new channel partners.


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Call us: 800 888 4932

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