The Hindu Business Line : Liquid milk helps in dairy industry growth

Forget cheese, ultra heat treated (UHT) milk or probiotic yoghurt. The real growth engine driving the country’s dairy industry of late is the good old liquid milk sold in pouches.

Nowhere is this more evident than in the South, where organised private dairies have registered strong presence in a segment traditionally monopolised by cooperatives. The Chennai-based Hatsun Agro Product Ltd alone today markets about 9.5 lakh litres per day (LLPD) of milk under “Arokya” and “Komatha” brands.

Other major players and their estimated volumes include Heritage Foods India (five LLPD), Creamline Dairy Products (3.5 LLPD under ‘Jersey’ label), Tirumala Dairy (3.5 LLPD) and Dodla Dairy Ltd (2.5 LLPD).

Private dairies

The growth of private brands has meant that in Chennai, which has a pouch milk market of 16.5-17 LLPD (besides 7-8 LLPD sold by small vendors in loose), the share of Tamil Nadu Cooperative Milk Federation’s “Aavin” is roughly 9 LLPD. The remaining has been captured by private dairies — something unimaginable five years ago.

Further, some have expanded to other centres: of the 9.5 LLPD that Hatsun sells, only 1.7-1.8 LLPD is marketed in Chennai, and the rest in interior cities and towns.

But it is not only these southern upstarts who are betting big on liquid milk. Even more aggressive has been the Gujarat Cooperative Milk Marketing Federation (GCMMF), which, till around 2003, was supplying roughly 1.5 LLPD of “Amul” milk in Mumbai and not a single litre in Delhi or Kolkata.

The Rs 4,200-crore cooperative is now doing 5 LLPD in Mumbai, 6.5 LLPD in Delhi and 2.5 LLPD in Kolkata, besides penetrating into Pune, Nagpur and Raipur.

Liquid milk

“In 2006-07, our liquid milk volumes grew by 26 per cent. This year, it is 37 per cent,” says Mr B.M. Vyas, Managing Director, GCMMF. Out of the 70 LLPD that GCMMF and its unions procure on an average, around 40 LLPD is marketed as liquid milk and the rest converted into products.

The proportion of liquid milk sales to procurement for all cooperatives is currently over 80 per cent, while it is hardly 20 per cent for the private sector.

“Within the next ten years, I see the latter ratio not only crossing 50 per cent, but private dairies even overtaking cooperatives in liquid milk volumes,” claims Mr Sharad Gupta, Editor, Dairy India 2007.

nd all this is plain pouch milk and not premium UHT milk, the market for which is below two LLPD!

Trend set

While the South has taken the lead, other markets are yet to latch on to the trend. Delhi’s 50 LLPD milk market is dominated by Mother Dairy (21-22 LLPD) and Amul (6.5 LLPD), with private brands such as “Param”, “Paras” and “Gopaljee” together accounting for just 3-4 LLPD.

The share of cooperatives/public sector in Mumbai’s 40 LLPD market is even greater: “Mahananda” (5.5 LLPD), “Amul” (5 LLPD), “Gokul” (4 LLPD), “Warana” (3 LLPD) and “Aarey” (2.5-3 LLPD).

The same is true for Kolkata: Metro Dairy, Mother Dairy (3.5-4 LLPD each) and Amul (2.5 LLPD) out of a total 30 LLPD.

All these markets have also unorganised loose milk suppliers.

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