Although the dairy industry has experienced challenges in recent years, the appetite and demand for dairy products is on the rise. With a growing middle class who have more disposable income, consumers seeking out healthy alternatives to fit in with a more active lifestyle, and a focus on natural ingredients, milk and dairy products are growing in popularity.

As the largest producer of milk in the world, India are a key player in the dairy industry and the opportunity for growth is significant. However, the industry in India faces challenges of disorganisation with only 18 to 20% of the total milk produced going through the appropriate organised channels.

As one of the fastest growing beverage segments in the Indian market, dairy is predicted to become a billion-dollar market by 2021 with the three key categories of flavoured milk, chaas and lassi, and functional yoghurt drinks leading the way. Although the dairy industry faces organisational issues, the union budget 2018-19 provided a special focus on the rural sector in order to contribute to the development of supply chain management and the introduction of technology.

In recent years there have been significant technological advancements in the Indian dairy industry, including a machine learning platform developed by startup MooFarm which will help tackle mastisis, a disease of the cow udder which leads to an annual loss of half a billion dollars in India. Supported by a grant from Microsoft, MooFarm are working to provide on-call support for farmers and plan to have staff located in rural areas.

Alongside technological developments to improve farming methods and the organisational supply chain, big data is another arena which Indian companies are turning to. In order to accurately predict consumer behaviour and buying patterns, big data is key as companies such as Doodhwala have discovered. Noticing a pattern in millennial consumers prioritising convenience, Doodhwala created a subscription-based milk delivery platform and now deliver more than 30,000 litres of milk every day before 7am in Bengaluru, Pune, and Hyderabad.

Connecting to the changing wants and needs of consumers is important for the dairy industry to keep on top of trends. The flavour profile and preferences of Indian consumers is quite varied, however, milk is a staple for the population from toddlers to senior citizens. The health benefits of milk are widely recognised including its contribution to digestive wellness and the advantages of dairy proteins. With consumers reconsidering their dietary choices, there has been a reduction in the consumption of carbohydrates and sugar, leading to an increase in protein-based diets.

Dairy has become an attractive source of natural proteins, and as such many dairy products are being positioned as functional foods and beverages. Indian companies including Amul, KMF, and startups such as Goodness! are marketing milk to millenials as not just a health drink, but as a functional drink. Recognising the benefits of marketing to younger, health conscious demographics, Goodness! have removed all sugar from their products and have seen industry success as the only Indian finalist in the World Dairy Innovation Awards in 2018.

As a key player in the global dairy market, India are positioned to be industry leaders. Although operational challenges still account for major loses, investment in technology and attention to changing consumer needs have already contributed to considerable improvements. With strong export estimates forecast, the dairy industry in India remains one of the country’s most lucrative markets.