Economic Forum predicts that consumer spending in India will skyrocket from $1.5 trillion to nearly $6 trillion by 2030. The latest National Family Health Survey 2022 conducted in India highlights that households in the country allocate a significant portion of their budget towards the food segment. The survey also emphasizes a steady rise in discretionary spending within the Food segment over the past two decades, with a consistent growth in dairy products and packaged food products witnessing accelerated growth. • Urbanization. Urbanization is a key trend unfolding in India, driven by improved access to higher education, unremunerative agriculture, and infrastructure development. Although the urban population in India has been increasing steadily, just over one-third of the population currently resides in urban areas. As per Census Bureau, it is estimated that nearly 40% of India’s population will reside in urban areas by 2030. This growing trend is particularly driving the demand for packaged milk products, including milk, curd, buttermilk, ghee, butter, ice cream, paneer etc. • Changing dietary patterns. The food consumption pattern of Indian households is undergoing a notable transformation due to increasing health awareness, especially in the aftermath of the pandemic. There is now a greater inclination towards consuming high-value and nutritious food items like milk, milk products, fruits, and vegetables, while staple cereals are becoming less prominent. The preference is now leaning towards high-value and nutritious food choices such as milk, milk products, fruits, and vegetables, with staple cereals taking a backseat. The preference for dairy products as an essential source of nutrients like proteins, vitamins, and minerals is continuously growing. This preference extends beyond conventional dairy items to include value-added products like flavoured yogurts, fortified milk, and probiotic drinks. Per capita protein consumption (2020) Milk Consumption Per Capita (Kg per year) Industry setup and structural shifts Since 1997, India has consistently held the top position as the world’s largest milk producer, contributing to more than a quarter of the global dairy output.. In the FY23, the country produced around 231 million tonnes of milk, clocking a growth rate of 6% CAGR over the past decade. A report by NITI Aayog predicts that milk production will reach approximately 300 million tonnes by 2030. Indian dairy industry primarily caters to the domestic market, with production and consumption centred within the country. It serves as a crucial pillar of the rural economy, contributing to employment and income generation for the rural population. The dairy market in India was estimated to be worth Rs13 trillion in 2023 (as per IMARC). Over the past 15 years, the market has shown a steady growth rate of approximately 15% CAGR, and it is anticipated to achieve a market size of about Rs31 trillion by 2027 as per IMARC. The liquid milk segment accounts for approximately 61% of the overall dairy market in the country, with traditional value-added products making up 34% and emerging value-added products comprising the remaining 5%. It is projected that the liquid milk market is expected to experience a 9% CAGR over the next five years. Meanwhile, traditional value-added products such as paneer, ghee, ice-cream/ FD, khoa, curd, etc., are forecasted to grow at a 14% CAGR, and emerging value-added products like cheese, flavoured milk, lassi, buttermilk, whey, and organic milk are anticipated to grow at a rate exceeding 19% per annum. The fragmented and unorganized Indian dairy industry is poised to change The majority of markets in the Indian dairy industry are dominated by regional players. This is mainly due to the high consumption of liquid milk and the demand for dairy products with short shelf-life. Moreover, the limited profitability and feasibility of transporting liquid milk over long distances have also played a role. Furthermore, the establishment of trust with farmers and the development of a reliable procurement network have been significant Board's Report STRATEGIC REVIEW STATUTORY REPORT FINANCIAL STATEMENTS 58 32ND ANNUAL REPORT 2023-24 | HERITAGE FOODS LTD
RkJQdWJsaXNoZXIy NTE5NzY=