Heritage Foods Limited

Heritage Foods Limited 102 economic activity. The package focused on providing bene fi ts in the form of fi nancial aid, provision of food, and ensuring security to enable the country to tackle the economic fallout. Notable measures included: - Direct cash transfer bene fi ts to over 87 million Indian farmer families - Special relief package and free food and gas distribution to the marginalized population - Liquidity measures to banking and fi nancial institutions and micro, small and medium enterprises (MSMEs) to boost credit growth - Medical covers for health workers - The target for agricultural credit has been increased to ` 16.5 lakh crores in order to ensure availability of higher credit to farmers and for sectors like animal husbandry, dairy, and fi sheries. The Reserve Bank of India (RBI) continued with the accommodative monetary stance by bringing key repo rate and reverse repo rate to 4% and 3.35% respectively to provide monetary stimulus and trigger economic growth back to the earlier trajectory. The fi scal and monetary stimulus provided by the Government and RBI would assist greatly in the recovery of the economy. Despite the challenges posed by the COVID-19 in FY 2020- 21, the outlook for FY 2021-22 seems promising largely due to relaxations in lockdowns, large scale vaccination drives, normalization of economic activities, thrust on reviving manufacturing and infrastructure sector and the country’s increasing prominence in the global supply chain. DAIRY INDUSTRY REVIEW Global Dairy Industry The outbreak of COVID-19 has acted as a massive restraint on the dairy food market as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments. However, the industry showed a rebound to $722.14 billion in 2021 at a compound annual growth rate (CAGR) of 6.9%. Growth has been primarily driven by rising consumption of dairy products to ful fi ll the protein requirement of the body, a shift in consumers’ preference from meat to dairy products for protein enrichment, the development of modern cold chain logistics, population growth and rapid urbanisation. The market is expected to reach $956.26 billion in 2025 at a CAGR of 7%. The per capita consumption of milk and milk products is higher in developed countries, but the gap with many developing countries is narrowing. Demand for milk and milk products in developing countries is growingwith rising incomes, population growth, urbanization and changes in diets. This trend is pronounced in East and Southeast Asia, particularly in highly populated countries such as China, Indonesia and Vietnam. The growing demand for milk and milk products o ff ers a good opportunity for producers in high-potential, semi-urban areas to enhance their livelihoods through increased production. There has been a shift in the demand for clean label products which are free from additives, arti fi cial preservatives or chemicals. Owing to this, manufacturers are prompted to expand their product portfolio with the introduction of organic dairy products. The value-added dairy products segment is steadily grabbing the consumer’s basket due to lifestyle changes, a rising preference for healthful and nutritional food, rise in the demand for lactose-free milk, etc. Indian Dairy Industry India has been the leading producer and consumer of dairy products worldwide with a sustained growth in the availability of milk and milk products. Dairy activities form an essential part of the rural economy, serving as an important source of income and employment. However, the milk production per animal is signi fi cantly low compared to the other major dairy producers. Moreover, nearly all of the dairy produce is consumed domestically, with the majority of it being sold as liquid milk. According to the ‘Dairy Industry in India 2021 Edition’ by IMARC Group, the dairy market in India stood at ` 11,360 billion in 2020. Liquid milk is the most widely consumed dairy product in India and is considered a vital source of essential nutrients. Market for liquid milk is expected to grow at a Compound Annual Growth Rate (CAGR) of 7% over 2021-25. The industry is seen aggressively transitioning from loose milk to value-added products (VAP) market and from unorganized to an organized and branded market. These two structural shifts from unorganized to organized market and from liquid milk/powder to value-added dairy products will provide long-term growth visibility to the organized dairy sector. Demand for value-added products is seen being driven by increasing urbanization and nuclearization, rising number of dual income households with working women and improved per capita spending. Further, the dairy market is expected to reach a value of $417.26 billion by 2025, exhibiting a CAGR of 7% over 2021-25. COVID-19 Impact The COVID-19 pandemic-induced lockdown has created a vital adverse impactondi ff erent sectors, includingthatofagriculture and allied sectors in India and several other countries. The crisis is severe in countries like India where dairy farming is one of the most essential sources of sustenance and regular income for 60 million rural households of which 80 percent are landless, small, and marginal farmers. The COVID-19 pandemic