The National Capital Region (NCR) – the country’s biggest milk market – is on the boil. Lured by rapid growth, the NCR market has seen the entry of newer brands such as Sudha, while existing large player Amul and other smaller brands are stepping up their presence in the region.
Estimated at 50 lakh litres per day (LLPD), the organised milk market in NCR is growing at 6-8 per cent. At present, Mother Dairy, the National Dairy Development Board’s brand, dominates the market.
Mother Dairy, which commands half of the total market, is the largest seller of liquid milk sold through machines in Delhi and closely follows Amul, the market leader in pouched milk sales. Mother Dairy and Amul account for over 95 per cent of Delhi’s organised milk market, while others, Delhi Milk Scheme and smaller private players such as Paras, Gopaljee and Kwality, account for the rest.
Sudha, the milk and milk product brand owned by the Bihar State Co-operative Milk Producers Federation (Comfed) is the newest entrant in the NCR. “The Delhi milk market is growing by leaps and bounds. The sheer market size prompted us to launch our own brand,” says Harjot Kaur, Managing Director, Comfed.
Sudha is eying a quick number three slot in the NCR with initial volumes of around 2 LLPD in about six months or even earlier, while targeting 5 LLPD in about a year’s time. Sudha is targeting the captive Bihari populace in the NCR, which exceeds 40 lakh. Comfed was so far supplying milk in bulk to other vendors such as Mother Dairy and Amul. Now it has stopped the bulk sales and instead hired a third party vendor near Delhi to package its milk sourced from Bihar.
Sudha is following Amul’s model, having distributors across the city and retailing the milk and its other milk-based products such as ghee, gulab jamun and soan papdi through neighbourhood grocery stores. Including the unorganised sales, the milk market in NCR is pegged at a whopping 70 LLPD. The packaged milk market alone is poised to double to 1 crore litres by 2020, from 50 LLPD.
Amul’s aggressive push over the past eight years, since its entry into Delhi, has helped it emerge as the leader in NCR pouched milk market with sales of 24 LLPD.
Amul overtook Mother Dairy in pouched milk sales two years ago and has strengthened its presence in the region by recently setting up its largest dairy of 30 LLPD at Dharuhera, in Haryana. With its earlier processing capacity of 10 LLPD at Manesar and another upcoming facility of 10 lakh tonnes in Rohtak, Amul is gearing up to continue its dominance in the NCR market in the years ahead.
“The rising income levels and the shift in preference of consumers to packaged milk are driving Amul’s sales,” says R. S. Sodhi, Managing Director, Gujarat Co-operative Milk Marketing Federation (GCMMF).
Amul has doubled its sales in NCR in the past three years and commands a 46 per cent share in the pouched milk sales in NCR. The country’s largest milk vendor is eyeing sales of 65 LLPD in NCR region by 2020. The aggressive push by Amul and the entry of new players like Sudha will force Mother Dairy to really work hard to retain and grow its market share, say market observers. Besides, these two players are keenly interested in acquiring the assets of DMS, under the Ministry of Agriculture. DMS, with sales of 3 LLPD, is operating on losses and the Government is looking to corporatise the entity before deciding on its fate. However, any player who succeeds in obtaining DMS assets will gain access to the over 600-odd milk booths across the city.
Acknowledging the rising competition, Mother Dairy’s Managing Director Siva Nagarajan says it would result in increased growth for the organised players. Besides, the consumer shift from loose to packaged milk sales will increase and would lead to ‘customer segmentation’. Nagarajan says Mother Dairy will focus on a localised sales strategy – by focusing more on how to serve its consumers better besides planning to launch newer products to retain and grow its market share.
Mother Dairy owns some 1,300 booths and its network reaches about 16,000 outlets across NCR. But whether Mother Dairy would be able to retain its hold on its home turf is worth a wait and watch.