Six of the 20 top dairy producers in the world have already established some form of presence in India and many others are considering doing the same. According to Rabobank, value added dairy products such as yogurt, cheese, ice cream, and baby food are expected to see a compounded annual growth rate (CAGR) of between 20% and 30% within five years. Because of a rise in disposable income and shifting dietary patterns, India’s formal dairy market which was $10 billion in 2011-12 is expected to grow at a CAGR of 13%-15% until 2019-20. Production growth in the domestic Indian milk segment has seen a CAGR of approximately 4% while consumption has experienced a CAGR of 11%, which is forecast to continue for the next 25 years. Currently 70%-80% of milk in India is procured from small and marginal farmers – a system which Rabobank sees continuing for the next decade making entry by large foreign entities a challenge. But as their domestic markets remain static India might be the next large market after China to expand into.
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