DISSERTATION REPORT

ON

“DISTRIBUTION STRUCTURE OF ORGANISED MILK MARKET IN INDIA”.

BY

ADITYA PRATAP SINGH P.G.D.M 2011-13

UNDER THE GUIDANCE OF PROJECT GUIDE –PROF. MAHESH SONI

SUBMITTED TO

UNDER PARTIAL FULFILLMENT OF THE COURSE

INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH

BHOPAL

Executive Summary

Dairy industry in India has witnessed a remarkable journey in last few decades. From being a laggard and net importer of dairy products in 1950s and 1960s, India has covered a lot of ground. India now is world’s largest producer of milk (approximately 135 million tons annually) and a net exporter of milk products. The credit of this transformation is largely attributed to “Operation Flood”, a co-operative led movement started in 1970s which took in its fold millions of small holding farmers who joined the three tier co-operative structure and increased India’s milk output.

Apart from smallholdings and three tier co-operative structures, India dairy industry’s uniqueness also emanates from imbalance in the collection and consumption pattern. Milk is predominantly (as high as 98%) collected from millions of smallholding farmers residing in villages and is sold to the urban centers through a complex distribution structure. The processing sector is dominated by co-operatives, though the prominence of private dairy processors is gradually increasing. Apart from this, the unorganized sector (local sweet makers etc.) processes a large portion of the total liquid milk output. In fact, the unorganized sector outnumbers the organized sector (both co-operatives and private players combined) in dairy processing capacity in the ratio of 3:2.

The consumption pattern of dairy products in India is very different from many western countries, the primary reason being conventional dietary habits of Indian households. Approximately 55-60% of the milk produced is consumed in liquid form. The rest of the milk products consumed are predominantly traditional Indian dairy products like ghee, paneer, chhana, dahi and other traditional sweets. Universal dairy products like cheese, table butter, ice creams are consumed in moderate amounts, even though the growth rate of some of these products are healthy.

In recent years, India has maintained a positive trade balance for dairy products. The advantages India leverage are low farm gate prices (due to low milk production costs) 3 and proximity to milk deficit markets of Asia and Middle East. However, India’s export performance is not up toits potential. The key reasons attributed for its below par export performance are low quality and hygiene standards, lack of experience in marketing dairy products in international markets, and significant increase in consumption of milk and milk products in domestic market leading to limited surplus of exports.

The government of India has expressed strong interest in maintaining self-sufficiency in dairy and other agricultural products. However, there has been a steady increase in import of dairy products to India after trade liberalization. The key items imported to India are butter oil, whey products, cheese, and milk powders. The key nations that export dairy products to India are Denmark, Nepal, USA, France, Netherlands and Italy. Many dairy products from other major milk producing nations face non-tariff barriers in India.

In past few years, India has been able to achieve a fair degree of self-sufficiency in all aspects of the dairy value chain. Indian dairy industry’s uniqueness has also called for many distinctive requirements and ingenious solutions that one normally doesn’t find in other large dairy producing nations.

DECLARATION

I hereby declare that this project report on, “Distribution structure of

organized milk market in India”, which is cover all possible information

related to milk and milk product and distribution structure in India is the

result of the work carried out by me, under the guidance of marketing guru

Prof- Mahesh Soni, Institute of Professional Education and Research, Bhopal.

Aditya Pratap Singh

Acknowledgement

Apart from my efforts, the success of project depends largely on the encouragement and

guidelines of many others. I take this opportunity to express my gratitude to the people who have

been instrumental in the successful completion of this project.

I would like to show my greatest appreciation to my faculty guide marketing guru Prof. Mahesh

Soni. I can’t say thank you enough for his tremendous support and help. I feel motivated and

encouraged every time I attend his meeting. Without his encouragement and guidance this

project would not have materialized.

The guidance and support received from all the members who contributed and who are

contributing to this project, was vital for the success of the project. I would like to express my

heartfelt thanks to my beloved parents for their blessing and constant support and help.

INDEX

SR.NO CHAPTERS PAGE NO

1 Chapter-1

About dairy industry The global dairy market Indian dairy industry

2 Chapter-2

Co-operative society Gujarat cooperative society About milk and its components

3 Chapter-3

Objective of the study Research methodology Limitation scope

4 Chapter-4

About major players• mother dairy• amul• nandini• paras• saras

Swot analysis of industry Bibliography

About Dairy Industry

A dairy is a business enterprise established for the harvesting of animal milk – mostly from cows or goats, but also from buffalo, sheep, horses or camels – for human consumption. A dairy is typically located on a dedicated dairy farm or section of a multi-purpose farm that is concerned with the harvesting of milk.

Terminology differs between countries. For example, in the United States, a farm building where milk is harvested is often called a "milking parlor". InNew Zealand such a building is historically known as a "milking shed" or "milking parlour" (note the different spelling). Sometimes milking sheds are referred to by their type, such as "herring bone shed" or "pit parlour". In some countries, especially those with small numbers of animals being milked, as well as harvesting the milk from an animal, the dairy may also process the milk into butter, cheese and yogurt, for example. This is a traditional method of producing specialist milk products, especially in Europe. In the United States a dairy can also be a place that processes, distributes and sells dairy products, or a room, building or establishment where milk is stored and processed into milk products, such as butter or cheese. In New Zealand English the singular use of the word dairy almost exclusively refers to the corner convenience store, or superette. This usage is historical as such stores were a common place for the public to buy milk products.

As an attributive, the word dairy refers to milk-based products, veil, derivatives and processes, and the animals and workers involved in their production: for example dairy cattle, dairy goat. A dairy farm produces milk and a dairy factory processes it into a variety of dairy products. These establishments constitute the dairy industry, a component of the food industry.

Industrial processing

Dairy plants process the raw milk they receive from farmers so as to extend its marketable life. Two main types of processes are employed: heat treatment to ensure the safety of milk for human consumption and to lengthen its shelf-life, and dehydrating dairy products such as butter, hard cheese and milk powders so that they can be stored.

Cream and butter

Today, milk is separated by huge machines in bulk into cream and skim milk. The cream is processed to produce various consumer products, depending on its thickness, its suitability for culinary uses and consumer demand, which differs from place to place and country to country.

Some cream is dried and powdered, some is condensed (by evaporation) mixed with varying amounts of sugar and canned. Most cream from New Zealand and Australian factories is made into butter. This is done by churning the cream until the fat globules coagulate and form a monolithic mass. This butter mass is washed and, sometimes, salted to improve keeping qualities. The residual buttermilk goes on to further processing. The butter is packaged (25 to 50 kg boxes) and chilled for storage and sale. At a later stage these packages are broken down into home-consumption sized packs.

Skimmed milk

The product left after the cream is removed is called skim, or skimmed, milk. To make a consumable liquid a portion of cream is returned to the skim milk to make low fat milk (semi-skimmed) for human consumption. By varying the amount of cream returned, producers can make a variety of low-fat milks to suit their local market. Other products, such as calcium, vitamin D, and flavoring, are also added to appeal to consumers

Casein

Casein is the predominant phosphoprotein found in fresh milk. It has a very wide range of uses from being filler for human foods, such as in ice cream, to the manufacture of products such as fabric, adhesives, and plastics.

Cheese

Cheese is another product made from milk. Whole milk is reacted to form curds that can be compressed, processed and stored to form cheese. In countries where milk is legally allowed to be processed without pasteurization a wide range of cheeses can be made using the bacteria naturally in the milk. In most other countries, the range of cheeses is smaller and the use of artificial cheese curing is greater. Whey is also the byproduct of this process. Some people that are lactose intolerant can eat certain types of cheese.

Whey

In earlier times whey was considered to be a waste product and it was, mostly, fed to pigs as a convenient means of disposal. Beginning about 1950, and mostly since about 1980, lactose and many other products, mainly food additives, are made from both casein and cheese whey.

Yogurt

Yogurt (or yoghurt) making is a process similar to cheese making; only the process is arrested before the curd becomes very hard.

Milk powders

Milk is also processed by various drying processes into powders. Whole milk, skim milk, buttermilk, and whey products are dried into a powder form and used for human and animal consumption. The main difference between production of powders for human or for animal consumption is in the protection of the process and the product from contamination. Some people drink milk reconstituted from powdered milk, because milk is about 88% water and it is much cheaper to transport the dried product.

Other milk products

Kumis is produced commercially in Central Asia. Although it is traditionally made from mare's milk, modern industrial variants may use cow's milk instead.

THE GLOBAL DAIRY INDUSTRY

The Global Dairy Market

The global dairy market was valued at about 276 billion euros in 2010, corresponding to 207 million tons of dairy products.

On a value basis, milk (white+flavored) is the biggest category (39%), followed by cheese (30%) and yogurt and similar products (19%). On a volume basis, milk is still the top category (72%), but in this case yogurt is next (14%), followed by cheese (7%).

Within the dairy market, liquid and powdered milk had the lowest growth rate. Flavored milk and yogurt were the most dynamic categories, with substantial growth rates over the five-year period being analyzed.

As shown in the chart below, the most important geographic macro areas for dairy products are Western Europe and Asia, which together account for about 50% of the total dairy market.

More specifically, while Western Europe and North America are more mature markets with limited growth (CAGR of 0.6% and 0.7%, respectively), Asia is growing at the fastest rate (CAGR of more than 6.5%), showing that it is a dynamic market in the diary segment as well. The Middle East and Africa are also growing markets (CAGR of more than 6%).

Overall, the position of private labels in the dairy market is substantially stable, accounting for about 16% of total turnover. However, they have a much stronger position in the markets for staple goods, such as liquid milk (pasteurized and UHT, with a 23% share) and cheese (17.3% share).

In the liquid milk category, in the Parmalat Group´s target markets, the market share of private labels is 12.6% in Canada, 45% in Australia and 15.4% for fresh milk and 14.6% for UHT milk in Italy.

The emergence of the private labels is typical of the more developed markets, where they have become established and are eroding the market share of brand products.

World cow's milk production in 2011 stood at nearly 606 million tonnes.

The USA was the largest cow's milk producer in the world in 2011 accounting for 14.7% of world production.

The UK was the 9th largest producer of cow's milk in the world in 2011 accounting for 2.4% of world production.

World cow's milk production in 2011 stood at nearly 606 million tonnes, with the top ten producing countries accounting for 56.6% of production. The USA is the largest cow's milk producer in the world accounting for 14.7% of world production, producing over 89 million tonnes in 2011, an increase of 1.9% when compared to 2009.

India is the second largest cow's milk producer, accounting for 8.7% of world production and producing over 52 million tonnes in 2011. The UK is the 9th largest producer in the world producing over 14 million tonnes in 2011 and accounting for 2.4% of world cow's milk production.

Cow's milk production in other countries .

World Top 10 Cow's Milk Producing Countries in 2012 (Tonnes)

2010 2011 2012

United States of America         85,880,500         87,474,400         89,015,200

India         47,825,000         49,960,000         52,500,000

China         35,509,831         36,036,043         36,928,901

World Top 10 Cow's Milk Producing Countries in 2012 (Tonnes)

2010 2011 2012

Brazil         30,007,800         30,715,500         32,091,000

Russian Federation         32,325,800         31,585,200         31,385,700

Germany         29,198,700         29,593,900         30,301,400

France         22,653,100         23,374,300         24,426,500

New Zealand         15,667,400         17,010,500         17,893,800

United Kingdom         13,236,500         14,081,000         14,246,000

Turkey         11,583,300         12,418,500         13,802,400

World       586,239,893       596,560,884       605,644,740

List of Top 10 Countries by Milk Production as per US Department of Agriculture:

 S.No.Country  Production (1000 MT) 

 1  EU-27  140,620.00

 2  India  121,500.00

 3  United States  88,768.00

 4  China  31,780.00

 5 Russian

Federation 31,200.00

 6  Brazil  30,846.00

 7  New Zealand  18,049.00

 8  Mexico  11,228.00

 9  Argentina  11,070.00

 10  Ukraine  10,812.00

The global dairy market grew by 4% in 2010 to reach a value of $327,163.8 million.In 2015, the global dairy market is forecast to have a value of $398,722.4 million, an increase of 21.9%since2010.Milk is the largest segment of the global dairy market, accounting for 35.5% of the market's total value.Europe accounts for 47.7% of the global dairy market value.Groupe Danone is the leading player in the global dairy market, generating a 5.4% share of the market's value.

Everyday dairy nutrition products comprise almost all globally-traded dairy products. Skim Milk Powder (SMP) and Whole Milk Powder (WMP) together account for more than half of all globally-traded products. GLOBAL GROWTH

Global demand for dairy is continuing to grow. In particular, population growth, rising incomes, urbanisation and westernisation of diets, in developing countries such as China and India, are

leading to increased demand.

However, milk supply in China and India, as well as countries within South East Asia and Africa, is not keeping pace with this growth. As such, these markets are becoming increasingly important for global dairy companies, who are helping to meet the demand with dairy ingredients, as well as locally produced consumer products. 

Asia continues to be the major growth market globally accounting for 34 per cent of all dairy imports in 2011. Asia accounts for 53 per cent of the world’s SMP and 40 per cent of the world’s WMP imports.

In developed countries, where consumption is already high, there is a more consistent outlook, with demand expected to remain stable. 

The global dairy market is expected to grow from $436 billion this year to $505 billion by 2017

The main growth is going to be driven by the markets in China, which will see a nine per cent rise in the market and Brazil which will see a seven per cent rise. “China and Brazil are accelerating in growth rates, underpinned by their strong economic growth,

Market is becoming more and more sophisticated and in Brazil, milk for drinking is regarded as a nutritional product, particularly for children. Because of the growth in demand for milk products in China in particular, the largest companies are also from this region with Vili in Inner Mongolia and China Mengnui showing the greatest growth. The established companies such as Kraft, Danone and Nestle have shown lower growth in the emerging markets with 64 per cent of GDP growth coming from emerging markets between 2011 and 2016 and with 88 per cent of the global population also coming from emerging regions by 2016 with a greater disposable income, the growth in the dairy and particularly the milk product market is expected to come from Asia Pacific.

REGIONAL DEMAND TRENDS

Source: Fonterra estimate

Current volumes are represented by the area of the circles displayed. Growth rates represent

forecast compound annual growth rates.

Although strong growth in demand is expected in India, the ability to supply this market is likely to

remain limited. In the 12 months to May 2012, Fonterra exported 22,300 MT of product to India and

total imports represented approximately 0.2% of consumption.

DAIRY PRODUCTS

Processed milk falls under two broad categories:

1.    Everyday nutrition, out of home nutrition and advanced nutrition

Through manufacturing processes, commodity and ingredients products such as milk powders,

cream products, wholesale butter and cheese, casein, lactose, whey powders and infant formula

constituents can be created. These products are generally supplied to international food and

pharmaceutical companies to be used as ingredients for higher value added products or consumer

products.  

2.    Consumer branded products

Consumer products include branded dairy products, such as fresh milk, flavoured milk, nutritional

milk powders, cheese, yoghurt, butters, creams and ice cream. Consumer products are produced

either from domestic milk supply or imported dairy ingredients. 

Fully integrated dairy companies, such as Fonterra, manufacture branded dairy products for

domestic and international markets using their own milk supply source, whereas food and beverage

companies typically rely on externally-sourced ingredients for the manufacture of consumer

products.  

DAIRY INDUSTRY PROFILE:

Dairy enterprise is an important occupation of the farmer. In India, nearly 70% of the people

depend on agriculture. It is the backbone of India. It is mainly a rural occupation closely

associated with agriculture. More than 2,445 million people economically active in agriculture in

the world, probably 2/3 or even more ¾ of them are wholly or partly dependent on livestock

farming. India is endowed with rich flora & fauna & continues to be vital avenue for

employment and income generation, especially in rural areas. The dairy sector in the India has

shown remarkable development in the past decade and India has now become one of the largest

producers of milk and value-added milk products in the world. The dairy sector has developed

through co-operative in many parts of the state. Traditionally, in India dairying has been a rural

cottage industry. Semi-commercial dairying started with the establishment of military dairy

farms and co-operative milk unions throughout the country towards the end of the 19 th century.

In earlier years, many households owned their own ‘family cow’ or secured milk from neighbors

who had one. With the increase in urban population fewer households could afford to keep a cow

for private use & moreover there were other problems also like the high cost of milk production,

problem of sanitation etc. restricted the practice; and gradually the family cow in the city was

eliminated and city cattle were all sent back to the rural areas. Gradually farmers living near the

cities took advantage of their proximity to the cities & began supplying to the urban population;

this gave rise to the fluid milk –sheds we see today in every cities of our country. Prior to the

1850s most milk was necessarily produced within a short distance of the place of consumption

because of lack of suitable means of transportation and refrigeration. The Indian Dairy Industry

has made rapid progress since Independence. A large number of modern milk plants and product

factories have since been established. These organized dairies have been successfully engaged in

the routine commercial production of pasteurized bottled milk and various Western and Indian

dairy products. With modern knowledge of the protection of milk during transportation, it

became possible to locate dairies where land was less expensive and crops could be grown more

economically. In India, the market milk technology may be considered to have commenced in

1950, with the functioning of the Central Dairy of Aarey Milk Colony, and milk product

technology in 1956 with the establishment of AMUL Dairy, Anand. Indian dairy sector is still

mainly an unorganized sector as barely 10% of our total milk production undergoes organized

handling. Beginning in organized milk handling was made in India with establishment of

Military Dairy Farms. Handling of milk in co-operative Milk Unions established all over the

country on a small scale in the early stages. Long distance refrigerated rail-transport of milk from

Anand to Mumbai since 1945 pasteurization and bottling of milk on a large scale for organized

distribution was started at Aarey (1950), Calcutta (Haringhata, 1959 ), Worli (1961),

Madras(1963) etc. establishment of Milk Plants under the Five-Year plans for Dairy

Development all over India. These were taken up with the dual object of increasing the national

level of milk consumption and ensuing better returns to the primary milk producer. Their main

aim was to produce more, better and cheaper milk.

India Dairy industry profileIndia is the world leader in milk production with total volume of 121.8 million tons. Driven by steady population growth and rising income, milk consumption continues to rise in India. Dairy market is currently growing at an annual growth rate of around 7 per cent in volume terms. The market size of Indian dairy industry stands at around US$ 45 billion.

Since India’s population is predominantly vegetarian; milk serves as an important part of daily diet. Indians use milk in various preparations such as in brewing tea and coffee, in making yogurt or curd and in preparing many Indian dishes. For most households, milk is also a popular beverage due to its nutritional value.

In India, rural households consume almost 50 percent of total milk production. The remaining 50 percent is sold in the domestic market. Of the share of milk sold in the domestic market, almost 50 percent is consumed in fluid form, 35 percent is consumed as traditional products (cheese, yoghurt and milk based sweets), and 15 percent is consumed for the production of butter, ghee, milk powder and other processed dairy products (including baby foods, ice cream, whey powder, casein, and milk albumin).

Most dairy products are consumed in the fresh form and only a small quantity is processed for value addition. In recent years, however, the market for branded processed food products has expanded. Although only around 2 per cent food is processed in India, still the highest processing happens in the dairy sector, where 35 per cent of the total produce is processed, of which only 20 per cent is processed by the organized sector.

India now has indisputably the world's biggest dairy industry—at least in terms of milk production; last year India produced close to 100 million tonnes of milk, 15% more than the US and three times as much as the much-heralded new growth champ, China. Appropriately, India also produces the biggest directory or encyclopaedia of any world dairy industry. The dairy sector in the India has shown remarkable development in the past decade and India has now become one of the largest producers of milk and value-added milk products in the world.

The individual products under this sub-head are as below:

Butter Fresh Butter MilK

Butter Oil Fresh Cheese

Milk & Cream in Powder

Milk for Babies

Other Fat Skimmed milk powder

Other milk power Whole Milk

Ghee

Areas of Production:

Uttar Pradesh, Maharashtra, Himachal Pradesh, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu are the major production area of Dairy Products in India.

India Facts and Figures :

India is the largest exporter of dairy products and exported 87.82 thousand MT of dairy products to the world for the worth of Rs. 1412.1 crores during the year 2012-13.

Major Export Destinations (2012-13) : Bangladesh, Egypt Arab Republic, United Arab Emirates, Saudi Arabia, Algeria and Yemen.

Annual Milk Production 121.8 Million Tonnes

Annual Export Volume 87.82 Thousand MT

Share of world dairy production 15%

Share of world trade in dairy products 0.3%

Milking herd size 115.5 million

Number of milk producers’ cooperative unions 254

Number of local dairy cooperatives 96,000

Number of state cooperatives 20

Per capita consumption 296g/day

Dairy industry workforce 75 million women/ 30 million men

Key facts

50 per cent of the milk is sold in “loose” form Only 10 per cent of the milk is sold through retail chains 70 per cent is delivered to the homes by ‘milk agents’ Carton milk or packaged milk has been growing at 24 per cent annually. Most branded FMCG companies are keen on launching flavored dairy products whose

market size is pegged at US$ 166 million. The branded milk distribution market in India is around Rs 40,000 crore. The market is growing at 10-12 per cent a year. The branded milk market earns high margins of 10-12 per cent. Indian Dairy emerging as sunrise industry and contributes significantly in generating

small and marginal farmers of rural INDIA, besides providing food security INDIA is blessed with huge bovine population of 196 million cattle and 80 million

buffaloes accounting for 51% if Asia and 19% of world bovine population—the largest in the World.

Milk production in INDIA has increased from 20 MILLON tones to during 1970 TO 128 million in 2012 which accounts for 20% of the world`s milk production and stood first in the world`s milk production and registering growth rate of 5% per year.

India’s dairy industry generates an annual business of nearly Rs 115970 Crore Dairy sector provides regular employment to 9.8 million people principal status and 8.6

million people in subsidiary status, which together constitute 5 percent of total work force

Dairy development owes much to the Anand pattern of Co-operative Operation flood brought milk revolution in the country by transforming dairying into a

core economic activity. The main challenge before Indian dairy sector improving quality, developing international accepted products and stepping up global marketing strategy.

The future of Indian Dairy industry is promising since its de-licensing in 1992. The interest of multinational and Indian corporate in the industry has been growing, and the industry’s growth potential is high as there is sufficient domestic demand and good scope for exports of milk products.

India is emerging as one of the largest and fastest growing consumers market in the world with high income elasticity of demand of dairy products. Indian dairying is energy efficient labor incentive and ecological sound.

Over 80% of milk sold in urban and semi urban areas is non-pasteurized from unorganized sector. THE overall market for liquid milk is growing 4 percent per annum.

NATIONAL DAIRY DEVELOPMENT BOARD (NDDB):

The National Dairy Development Board was created to promote, finance and support producer-

owned and controlled organizations. NDDB’s programmes and activities seek to strengthen

farmer cooperatives and support national policies are favorable to the growth of such institutions.

Fundamental to NDDB’s efforts are cooperative principles and the Anand pattern of cooperation.

A commitment to help rural producers help themselves has guided the Dairy Board’s work for

more than 30 years. This commitment has been rewarded with achievements made by

cooperative dairies in milk production, employment generation, and per capita availability of

milk, foreign exchange saving and increased farmer incomes.

The National Dairy Development Board (NDDB) has replaced exploitation with

empowerment, convention with modernity, stagnation with growth and transformed dairying into

an instrument for the development of Indian farmers.

The National Dairy Development board was created in 1964 in response to the Prime Minister

Lal Bahadur Shastri’s call to “transplant the spirit of Anand in many other places”. He wanted

the Anand model of dairy development- with institutions owned by rural producers, which were

sensitive to their needs and responsive to their demands-replicated in other parts of the country.

The Board’s creation was routed in the conviction that our nation’s socio-economic progress lies

largely on the development of rural India.

Thus NDDB’s mandate is to promote, finance and support producer-owned and controlled

organizations. NDDB’s programmes and activities seek to strengthen farmer cooperatives and

support national policies that are favorable to the growth of such institutions.

THE ESTABLISHMENT OF CO-OPERATIVE SOCIETIES

In its scheme of functioning, milk cooperative societies were organized in the village so as to provide and assured market to milk producers and also ensure equitable return to the farmers by eliminating middleman. A feeder balancing dairy of 1 lac liters per day capacity at Jodhpur and 4 milk chilling centers of 10,000 liter/day capacity each at pokarn, pali, Balotra and Merta city have been established. All these plants were commissioned during 1974-76. The capacity of the main dairy is being expanded to 1.5 lac liters and capacity of existing chilling centers is being doubled. Looking to the potentiality in the Western area the Govt. has sanctioned the construction of additional chilling centers at Barmer, Nagour and Phalodi.

In the initial phases, the sangh started its functioning with only 13 societies through two milk collection routes in 1973-74. Total collection of milk in the beginning of the Sangh was only 3,500 liters per day. The milk was being chilled at private Ice Factory at time. The main dairy plant stared its function of 1 November, 1975.

At present Sangh is collecting working about 150,000 liter milk per day through 299 milk co-operative societies. In the coming flush season it is hoped that it will reach one lack liter per day.

WHAT IS CO-CPERATIVE SOCIETY?

Co-operative means mutual working. In simple words it is an organization of weaker section to face exploitation of rich persons. In other words co-operative form of organization is an association of persons where by people of ordinary means unit voluntarily to protect their economic and social interests. Thus it is protective mean adopted b such persons. It is based on principal “Each for all and all for each”.

Formation & Management of Co-Operative Societies

Co-operative Societies can be formed and registered under the India Co-operative Act. The following conditions are essential for of the society.

1. There must be at least minimum ten members.2. Every member should be adult or major.3. The members should be resident of that village or the city, where society is setup.

4. All documents of co-operative societies should be submitted to the registrar of co-operative society

The Management of co-operative societies is based on democratic Aspect. Registrar of co-operative societies departments checks the accounts of society. All the members of the co-operative society elect a working committee that looks after the work of the society. No remuneration or salary is paid by the co-operative society to its members.

AIMS & OBLECTS

The scheme aims to achieve the following objects:-

To Improve the Social & Financial Status of Milk Producers. To organizing dairy co-operative societies & Producers Marketable surplus milk. To provides remunerative price to milk producers at the door step. To undertake – milk production enhancement activities by promoting breeding / feeding

and hygienic milk production practices. To undertake training and awareness programmed against milk producers. Market quality processed milk and milk products to the consumers. Development of Co-operative milk procurement system in the rural areas covered under

the milk collection routes of the scheme in order to provide raw milk a channel which is more remunerative than the tradition channel of conversion of surplus milk into un-economic ghee.

Establishment of milk processing-cum-manufacturing plant for supplying pasteurized milk primarily to Jodhpur City.

Co-operative companies playing in Dairy industry and its brands:

STATES CO-OPERATIVE UNIONS BRANDS

Andhra

Pradesh

Andhra Pradesh Dairy Development co-

operative Federation Limited(APDDCF)

Vijaya

Bihar Bihar State Co-operative Milk Producers

Federation Limited(COMPFED)

Sudha

Gujarat Gujarat Co-operative Milk Marketing

Federation Limited(GCMMF)

Amul,Sagar

Haryana Haryana Dairy Development co-operative

Federation Limited(HDDCF)

Vita

Himachal

Pradesh

Himachal Pradesh State Co-operative Milk

Producers Federation Limited (HPSCMPF)

Karnataka Karnataka Co-operative Milk Producers

Federation Limited(KMF)

Nandini

Kerala Kerala State Co-operative Milk Marketing

Federation Limited (KCMMF)

Milma

Madhya

Pradesh

Madhya Pradesh state Co-operative dairy

Federation Limited(MPCDF)

Sanchi,

Shakti,Sneha

Orissa Orissa State Co-operative Milk Producers

Federation Limited (OMFED)

Omfed

Utter

Pradesh

Pradeshik Co-operative dairy Federation

Limited(PCDF)

Parag

Punjab Punjab State Co-operative Milk Producers

Federation Limited(MILKFED)

Verka

Rajasthan Rajasthan Co-operative Dairy Federation

Limited(RCDF)

Saras

Tamil Nadu Tamil Nadu Co-operative Milk Producers

Federation Limited(TCMPF)

Aavin

West Bengal West Bengal Co-operative Milk Producers

Federation Limited(WBCMPF)

Benmilk

Goa Goa State Co-operative Milk Producers Union

Limited

Goadairy

Jammu Jammu Co-operative Milk Producers

Federation Limited

Jamfed

Pondicherry Pondicherry Co-operative Producers Union

Limited

Ponlait

Sikkim Sikkim Milk Producers Union Limited Sikkimilk

Tripura Tripura Co-operative Milk Producers Union

Limited

Gomati

Maharashtr

a

Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit

Mahanand

Gujarat Cooperative Milk Marketing Federation Ltd. 

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's largest food product marketing organisation with annual turnover (2011-12) US$ 2.5 billion. Its daily milk procurement is approx 13 million lit (peak period) per day from 16,117 village milk cooperative societies, 17 member unions covering 24 districts, and 3.18 million milk producer members.

It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL', which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. Its success has not only been emulated in India but serves as a model for rest of the World. It is exclusive marketing organisation of 'Amul' and 'Sagar' branded products. It operates through 47 Sales Offices and has a dealer network of 5000 dealers and 10 lakh retailers, one of the largest such networks in India. Its product range comprises milk, milk powder, health beverages, ghee, butter, cheese, Pizza cheese, Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc

GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. Many of our products are available in USA, Gulf Countries, Singapore, The Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 13 years. For the year 2009-10, GCMMF has been awarded "Golden Trophy' for its outstanding export performance and contribution in dairy products sector by APEDA.

For its consistent adherence to quality, customer focus and dependability, GCMMF has received numerous awards and accolades over the years. It received the Rajiv Gandhi National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India's Most Respected Company Award instituted by Business World. In 2003, it was awarded the The IMC Ramkrishna Bajaj National Quality Award - 2003 for adopting noteworthy quality management practices for logistics and procurement. GCMMF is the first and only Indian organisation to win topmost International Dairy Federation Marketing Award for probiotic ice cream launch in 2007.

The Amul brand is not only a product, but also a movement. It is in one way, the representation of the economic freedom of farmers. It has given farmers the couragetodream. To hope. To live.

GCMMF - An OverviewYear of Establishment 1973

Members17 District Cooperative Milk Producers' Unions (16 Members & 1 Nominal Members)

No. of Producer Members 3.18 Million

No. of Village Societies 16,117

Total Milk handling capacity per day

13.67 Million litres per day

Milk Collection (Total - 2011-12) 3.88 billion litres

Milk collection (Daily Average 2011-12)

10.6 million litres (peak 13 million)

Milk Drying Capacity 647 Mts. per day

Cattlefeed manufacturing Capacity 3690 Mts. per day

Sales Turnover -(2011-12) Rs. 11668 Crores (US $2.5 Billion)

MILK DEFINITION AND ITS COMPOSITIONMilk may be defined as the whole, fresh, clean, lacteal secretion obtained by complete milking of one or more healthy milch animals, excluding that obtained within 15 days before or 5 days after calving or such periods as may be necessary to render the milk practically colostrum-free and containing the minimum prescribed percentages of milk fat and milk-solids-not-fat. In India, the term 'milk', when unqualified, refers to cow or buffalo milk, or a combination thereof. Milk SNF means Milk Solids-not-Fat, comprising protein, carbohydrates, vitamins, minerals, etc. in milk other than milk fat.

TYPE OF MILK

Dairies in India have to market milk by standardizing, as per the various types of milk prescribed under Prevention of Food Adulteration Act. These type of milk differ in their Milk fat and Milk SNF contents.

Raw milk procured from villages, contain numerous pathogenic and spoilage bacteria. These microorganisms, if allowed to grow, multiply at logarithmic rate and produce many toxins and enzymes and spoil milk. Hence milk is processed by heat treatment in dairies.

India's Milk Product Mix 

Fluid Milk 46.0%

Ghee 27.5%

Butter 6.5%

Curd 7.0%

Khoa (Partially Dehydrated Condensed Milk)

6.5%

Milk Powders, including IMF 3.5%

Paneer & Chhana (Cottage Cheese) 2.0%

Others, including Cream, Ice Cream 1.0%

Indian (traditional) Milk Products

India has the highest livestock population in the world with 50% of the buffaloes and 20% of the

world’s cattle population, most of which are milch cows and milch buffaloes. India’s dairy

industry is considered as one of the most successful development programmes in the post-

Independenceperiod. 

Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka

and Tamil Nadu are the milk surplus states in India. The manufacturing of milk products is

obviously high in these milk surplus States. Exports of dairy products have been growing at the

rate of 25% per annum in the terms of quantity terms and 28% in terms of value. Significant

investment opportunities exist for the manufacturing of value-added milk products like milk

powder, packaged milk, butter, ghee, cheese and ready-to-drink milk products. 

India has emerged as the largest milk producing country in the world with present level of annual

milk production estimated as 135 million tonnes. We expect a production level of 150 million

tonnes by the year 2015. India has a large livestock population base constituting 278 million

livestock including 180.5 million cattle, 82.8 million buffaloes, 4 million sheep and 9.2 million

goats. The livestock population is projected to increase to 322 million by the year 2015. The

large livestock population is raised primarily on crop residues and grazing in the common

property including basement. The forest area, which was a major source of grazing, is no longer

available to livestock breeders especially landless people.

The landless people are, therefore, likely to face severe shortage of resources to raise cattle and

other species of livestock. There is a real danger that in the absence of resources to maintain their

stock, these under-privilege rural people may give up livestock farming. This could be a serious

setback to lakhs of rural families who derive income as well as employment opportunities from

livestocksector. 

Processed Dairy Products

Cheese

The organized cheese market including its variants like processed cheese, mozzarella, cheese

spreads, flavored and spiced cheese, is valued at around Rs 4.5 billion. Processed cheese at 60%

of the overall market is Rs 2.7 billion. The next most popular variant is cheese spread claiming a

share of around 30% of the total processed cheese market.  The market is primarily an urban

phenomenon and is known to be growing at around 15%. The market for cheese cubes, slices and

tins is growing. The flavored cheese segment has been constantly declining. 

Gujarat Cooperative Milk Marketing Federation (GCMF) with the Amul brand continues to be

the main operator in the branded cheese market in India. It pioneered the market for processed,

branded cheese.  What GCMF did was to develop the technology to make cheese from buffalo

milk.  World over it is made from cow milk.

 Foreign brands in India include: Probolene, Colby, Mozzarella and Parmessan from Italy,

Cheddar from Dutch, Gryueve. The new entrants will have to compete with well-established

players such as Amul, Britannia's Milkman and Dabur’s Le Bon, enjoying substantial market

shares in the overall Indian cheese market.  The US-based Philip Morris, which brought in its

Kraft cheese brand earlier, has gained a significant presence in the market.  The rest of the

market is spread among Verka, Nandini, Vijaya and Vadilal.

The demand for cheese is projected to grow from about Rs. 11.00 bn in 2006-07 and to over  Rs

16.00 bn by the terminal year of the projection period, 2014-15. Cheese is becoming a popular

item in the menu of all relatively affluent families.  Slowly but surely, it will penetrate into the

rural markets.

Lead Players

The lead players in processed milk products in the market are as follows:

Amul, Britannia, and others include Vijaya, Verka and Vadilal. In the category of cheese Amul,

Britannia Dabur (Le Bon) are the leading players including others like Verka, Nandini, Vijaya and

Vadilal.

Dairy Whiteners

About 20% of the total milk output in India is estimated to be processed in the organized dairy. 

The industry has maintained a high growth profile, especially in the wake of the Operation

Flood, colloquially also termed as White Revolution, initiated in early 1980s. Today, India

produces over 135 mn tonnes of milk annually.  The total milk economy is estimated at Rs

40,000 crore.

 The market for dairy whiteners (commercially know as beverage milk powders and condensed

milk) and creamers is around Rs 3,000 mn. Apart from MNCs like Nestle and companies

like Britannia, the Indian enterprises have also made perceptible progress.  Names like Amul,

Sapan, Vijaya, Mohan, Parag and several others have been seen in the marketplace with their

whiteners.  These are available mostly in pouches, tetrapacks, and in the near future, may be

in miniportion cups. 

 Aseptically packed creamer in miniportions is widely used in the West, but has yet to enter the

Indian market in any substantial way.  Amul did make a beginning with its whitener pouches and

has emerged as a leader with a market share of 45% followed by Nestle’s 23%. Aseptically

packed creamer involves techniques to impart a longer shelf life to the product.  It is packed in

small cups ready to be poured into a cup of tea or coffee.   Creamer is fresh milk with increased

fat content (upto 12%) and is aseptically packed after undergoing Ultra Heat Treatment (UHT) at

1400 C. Its introduction will affect the existing whitener market as a natural milk product with a

longer shelf life. 

Nestle India with its Everyday dairy whitener has established its brand well. It has also entered

into the market with its Nestle Pure Milk and, of course, a product in its niche area,

Dairy Whiteners / Creamers

Demand: Past & Future

Year th MT

1990-91 801991-92 831992-93 851993-94 861994-95 89

1995-96 911996-97 991997-98 951998-99 135

1999-00 183

2000-01 147

2001-02 160

2002-03 1752003-04 1902004-05 2062005-06 2242006-07 2432007-08 2632008-09 2842009-10 307

2014-15 450

Market Growth Rates

1990-91 - 1996-97 3.6%

1996-97 - 2001-02 10.1%

2001-02 - 2006-07 8.7%

2004-05 - 2009-10 8.3%

2009-10 - 2014-15 8.0%

Milk Production in India

Production in India

Year Production (Million Tonnes) Per Capita Availability (gms/day)

1991-92 55.7 178

1992-93 58.0 182

1993-94 60.6 187

1994-95 63.8 194

1995-96 66.2 197

1996-97 69.1 202

1997-98 72.1 207

1998-99 75.4 213

1999-2000 78.3 217

2000-01 80.6 220

2001-02 84.4 225

2002-03 86.2 230

2003-04 88.1 231

2004-05 92.5 233

     2005-06                                            97.1 241

2006-07 102.6 251

2007-08 107.9 260

2008-9 112.2 266

2009-10 116.4 273

2010-11 121.8 281

2011-12 127.9 291

2012-13*(Estimated)

135.4 296

As regards the cooperatives, the NDDB data shows that out of their total average milk procurement of 287.06 lakh kg per day in 2011-12, more than 51 per cent was accounted for by two federations: Gujarat’s Amul (104.5) and Karnataka’s Nandini (42.77).

Milk Production By States

Milk Production By States

StateCow Milk 11-12 ('000

ton)Buffalo Milk 11-

12 Goat Milk 11-

12Total

Andhra Pradesh3 3102 8101 0.5 11203

Arunachal Pradesh 28 NA NA 28

Assam 666 101 23 790

Bihar 3561 2798 158 6517

Chhattisgarh 644 343 43 1029

Goa 37 23 0 60

Gujarat5 3572 5514 236 9321

Haryana 966 5239 63 6267

Himachal Pradesh 669 384 49 1102

Jammu & Kashmir 1205 311 94 1609

Jharkhand 842 647 65 1555

Karnataka 3475 1583 56 5114

Kerala 2505 21 119 2645

Madhya Pradesh7 3152 3935 427 7514

Maharashtra6 4297 3473 273 8044

Manipur 64 14 NA 78

Meghalaya 77 2 NA 79

Mizoram 11 1 NA 11

Nagaland 71 4 1 76

Orissa 1438 229 3 1671

Punjab4 3067 6301 55 9423

Rajasthan2 5032 6611 1590 13234

Sikkim # 43 0.1 NA 43

Tamil Nadu 6021 810 NA 6831

Tripura 100 2 3 104

Uttar Pradesh 1

5342 14496 1193 21031

Uttarakhand 615 769 NA 1383

West Bengal 4109 222 140 4471

A. & N. Islands 18 5 2 25

Chandigarh 14 32 NA 45

D. & N. Haveli 9 2 NA 11

Daman & Diu 1 1 NA 1

Delhi 102 377 NA 480

Lakshadweep 1 NA 1 2

Puducherry 45 2 NA 47

Objective of study

1. To study the current Indian market for dairy industry.

2. Analysis the global dairy market with reference India dairy industry

3. Distribution structure of organized milk market In India.

4. Study of dairy company state wise.

5. What are the opportunities in dairy industry?

Data collection method

Secondary data- The major sources of secondary data are:

Journals, Magazines etc.

Brochures

Internet

Other Documents

COMMUNICATION APPROACH

Face to face interviews was taken as the communication approach since it is a better method in cases where slight probing is required.

Limitation

The probable limitations of this study are as under:

1.  The first and foremost limitations was time constraint which was only 20 days , but still

efforts have been made to put the picture as clear and candid as possible.

2. Data is based on secondary research.

3. Access to information

Major Players

The dairy industry is dominated by the co-operative sector. About 60% of the installed processing capacity is in the co-operative sector.The National Dairy Development Board (NDDB) is a major player in the market with its major brand, Amul. Leading brands like Amul, Nestle, Mother Dairy and Britannia are in the race to tap the growing market. 

SmithKline Beecham Consumer Healthcare, Nestlé India and Heinz India are amongst the large MNCs that dominate the high-value milk products market. Other players include Indiana Dairy Specialties, Jagatjit Industries Ltd and various other state cooperatives.Some dairy plants have production of mithais on a commercial scale. Some national brands like Haldiram, Bikanervala, K C Das, Brijwasi, Agarwal Sweets etc are getting wide acceptance because of consistent quality Encouraged by the growing market and cashing on brand value select dairy companies are planning major expansion plans in various cities with new brands suited to local taste and preferences and realizing higher prices with higher sales volumes and product safety.The milk and dairy products segment is set for up gradation of cold-storage chains for expansion. Mother Dairy, a wholly owned subsidiary of National Dairy Development Board plans to make strong presence in the market of milk and milk products under the Mother Dairy brand through retail outlets across the country in addition to its own 300 outlets with provision of cold storage and cold chains.

Main Players in Indian dairy market

Milk products - Amul, Britannia, Vijaya, Verka and Vadilal

Cheese products- Amul, Britannia, Dabur (Le Bon) are the leading players. Other prominent players include Verka, Nandini, Vijaya and Vadilal

Dairy Whiteners - Nestle, Amul, Britannia, Dynamix Diary, Sterling Agro, Haryana Milk Foods, Mohan Food, Modern Dairy, K Dairy

Mother dairy

• Mother dairy Mother Dairy is a leading marketer of dairy products and fruit & vegetable products in the Indian sub-continent.

• Mother Dairy has set up a 100 per cent Export Oriented Unit with a capacity for processing over 15000 metric tons of fresh produce annually.

• New state-of-the-art plant with an installed capacity for processing 10 metric tones of fruit per hour in Bangalore.

• The units are ISO 9001-2000 and HACCP certified, and the products are Kosher certified.

• Established a marketing and distributional office in Rotterdam which is another step towards providing quicker and better service to its international customers .

• ‘Mother Dairy’ is the largest liquid milk brand in Asia. It started its operations in 1974 under the Operation Flood programme of the National Dairy Development Board, which is one of the largest dairy development projects in the world. Mother Diary, Delhi is IS/ISO- 9002 & IS-15000 (HACCP) certified organization.

• ‘Mother Dairy’ is the single largest brand of milk in Delhi, India as well as in Asia, marketing about 1.9 million liters of milk per day.

• Mother Dairy commands 40% market share in the organized sector in and around Delhi, primarily because of consistent quality and service reliability.

• ‘Mother Dairy’ test over over 15 lakh LPD (Distributed Programming Laboratory) of milk procured from various State federations.

• In addition to toned milk through Bulk vending, Mother Dairy also markets

• Full cream milk,

• standardized milk,

• toned milk,

• double toned milk

• Skimmed milk (lite) in polypacks.

Process of Procurement & Distribution of Milk

Farmers and the Milk Co-operative Society.

The Operation Flood programme helps both farmers as well as the city consumers. The

programme ensures that the farmers get a fair price for their cow & buffalo milk and the consumers get best quality milk at reasonable prices. In order to maintain freshness, this milk is chilled and then transported to Mother Diary in insulated milk tankers by road and by rail.

Checking the quality of milk

At the Dairy stringent hygienic standards are maintained. The milk in the tankers is first checked for quality and freshness and then unloaded into huge insulated stainless steel storage tanks. These tanks have a capacity of 1 lakh liters each. The presence of adulterants (impurities) like urea, neutralizers, preservatives and germs like bacteria are checked. All these tests ensure that only good quality milk is accepted. Once empty, the tankers are thoroughly cleaned and sanitized using acid and alkali. The tankers are then finally rinsed with water.

• Processing of milk

unprocessed milk may contain small dirt particles invisible to the naked eye. In order to remove these particles the milk has to be processed.

Dispatching of milk

After processing, the milk is chilled and stored in silos and further chilled to about 2 C. by the glycol chilling system, and then dispatched to the Milk Shops in insulated road milk tankers. Prior to the milk being dispatched in tankers, it is tested for quality to make sure that it meets the quality standards. When the tanker arrives at the shop the milk is transferred into a large refrigerated tank.

Making the milk available

The control room is very vital to the efficient distribution of milk to the 900 shops across the city. It organizes the tanker routes and its staff is responsible for ensuring that shops do not run out of milk. Each milk tanker is fitted with a wireless set. As soon as the incharge at the control room learns that a particular shop is running out of milk, he contacts the tanker nearest to the shop on the wireless which then delivers the extra milk to it

GCMMF: An Overview

AMUL Members

o 13 district cooperative milk producers Union

No. of Producer Members

o 2.79 million

No. of Village Societies

o There are 13328 village cooperative societies and There are 3600 wholesale distributors in the Country And 47 depots

o There are approx. 450000 retailers all over India

Total Milk handling capacity

o 11.22 million liters per day

Milk collection : 3.05 billion liters.

Milk collection (Daily Average): 9.2million liters

Milk Drying Capacity: 626 Mts. per day

Cattle feed manufacturing Capacity: 3500 Mts. per day

6 manufacturing units all over India.

It all began when milk became a symbol of protest Founded in 1946 to stop the exploitation by middlemen Inspired by the freedom movement

The Amul ModelThe Amul Model of dairy development is a three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level.

Establishment of a direct linkage between milk producers and consumers by eliminating middlemen

Milk Producers (farmers) control procurement, processing and marketing

Professional management

VALUE CHAIN PROCESS

PRODUCTS

Bread Spreads

Milk Drinks

Powder Milk

Fresh Milk

Cheese

For Cooking

Chocolate

Product Name Amul Gold

DescriptionPasteurised milk Amul milk meets the PFA standards for the respective type of milk.

PackingPoly Pack - 500ml, 1000ml, 5 Ltr ** In Selected markets only

Available in (Segments/Markets)

Gujarat, Delhi & NCR, Mumbai, Kolkata, Kanpur, Lucknow, Allahabad, Agra, Meerut, Aligarh, Asansol, Nagpur, Raipur, Indore, Bhopal, Jaipur, Ajmer, Pushkar, Udaipur, Jodhpur, Pali , Pune, Nasik

Product Name Amul Taaza

DescriptionPasteurised Milk Amul milk meets the PFA standards for the respective type of milk.

PackingPoly Pack - 500ml, 1000ml, 200ml, 5 Ltr ** In selected markets only

Available in (Segments/Markets)

Gujarat, Delhi & NCR, Mumbai, Kolkata, Kanpur, Lucknow, Allahabad, Agra, Meerut, Aligarh, Asansol, Nagpur, Raipur, Indore, Bhopal, Jaipur, Ajmer, Pushkar, Udaipur, Jodhpur, Pali, Pune, Nasik

Channel network

Amul has got 2 types of channel network which support its procurement and distribution asspects, they are

Procurement channel ( upstream flow)

Distribution channel ( down stream flow)

Upstream flow

DOWN STREAM FLOW

MODE OF TRANSPORT

FOR UPSTREAM FLOW

Manufacturer

Village cooperative society (VCS)

Village

Manufacturing unit Depot

Whole seller distributor

Retailer

FOR DOWN STREAM FLOW

GCMMF’s Supply Chain

Karnataka Co-Operative Milk Federation                                                 Karnataka Milk Federation (KMF) is the largest Cooperative Dairy Federation in South India, owned and managed by milk producers of Karnataka State. KMF has over 2.23 million milk producers in over 12066 Dairy Cooperative Societies at village level, functioning under 13 District Cooperative Milk Unions in Karnataka State. The mission of the Federation is to usher rural prosperity through dairy development. During the last four decades of Cooperative Dairy Development by KMF, the dairy industry in Karnataka has progressed from a situation of milk-scarcity to that of milk-surplus. Quality Excellence from Cow to Consumer” – is the motto of the Federation to obtain better-quality Milk and milk products from our value chain (Procurement to Processing to Marketing). Thus milk and milk products, under   brand name, are unmatched in quality made available to consumers at most competitive prices. In a way Nandini Milk and Milk Products are “Spreading wealth of health”.

The organization is three tiered on Co-operative principles.  A. Dairy Co-operative Societies at grass root level.  B. District Co-operative Milk Unions at single / multi district level.  C. Milk Federation at State level. 

Collection whelling and cooling

Milk collection and whelling

Village dairy cooperative society

transportation

transportationDistribution milk cooperative union

Processing and packaging plant

consumer

Marketing and distribution

MILK PROCUREMENT METHOD

agent

Milk distribution-dairy

ParlorsHotels/caterers agent

consumer

Transport cum distributor

wholeseller

depots

Product distribution network-dairy

consumer

retailer

Distribution structure

SARAS DAIRY

Paschimi RajasthanDugadh Utpadak Sahakari Sangh, (Jodhpur PRDUSS) was established in the year 1972, under the Operation Flood Programmed finds from D.P.A.P. were utilized for the construction of plant at Jodhpur, and later on the establish various chilling centers. Initially five districts of Jodhpur, Pali, Jaislmer, Barmer and Nagore were included under PRDUSS. But Pali was hived off later and was made into an independent union.

Under Jodhpur Union the production of milk is one lack per day while consumption of milk is 73 thousand liters per day. The excess of milk (60 thousand liters) is send to the central dairy Delhi and Gujarat. At present 485 co-operative societies and 347- milk collection canter are functioning where average production of milk is one lack thirty three thousand liters coming in Jodhpur dairy through 53,198 milk production’s.

Till very recently, the marketing department was the most neglected. It was only after it was realized that the profits came from city sales, the union started paying attention to this most essential activity-

The city sample at jodhpur has increased to nearly 90,000 LPD (June, 2009) and has shown a steady growth over the last two years. Toned milk is the only type of milk processed. The dairy also manufactures other fresh products, but the production is order based and is has a very insubstantial contribution towards the total sales of the dairy.

A) - DISTRIBUTION SYSTEM

Distribution Network

Distribution channel can be divided in two categories: -

a) Urban Distribution Network

b) Rural Distribution Network

Urban Distribution Network

a) Milk Distribution Network:

1. Twenty Seven Zones.

2. Twenty Seven Distributors one distributor for one Zone.

3. Two Vehicles (207) for retail Stores Milk & Milk products supply.

4. Three Vehicles for department supply i.e. Army Supply, Hospital Supply etc.

b) Fresh Product Distribution Network

1. 22 Distributors for fresh product supply in Jaipur City.

2. Two Distt. for exclusive Saras Parlour supply.

3. One mobile vehicle for M.B 186 (RCDF), 147(Secretariat), 116 (Vidhansabha) supply.

c) Ghee Distribution

Twenty Distributors.

d) Ice-cream Distribution

1. Two Distributors for Ice-cream supply in Jaipur City.

2. One vehicle for M.B 186 (RCDF).

Rural Distribution Network

a) Milk Distribution Network

Sixteen Distributor for 16 Routes (One Distributor for one Route).

b) Fresh Product Distribution Network

Four Distributor & 16 Milk Distributor also supply F.P in Rural Areas.

c) Ghee Distribution

1. Twenty Eight Distributor for Ghee distribution.

2. Jaipur Dairy has started marketing ghee in rural areas through dairy cooperative socities. The results of the same have been overwhelming and presently we are selling over 70 MT per month of ghee through DCS's

d) Ice-cream DistributionRetail Outlet Network

Jaipur Dairy selles its milk & milk products through a network of over 1800 retail outlets spread over Jaipur city and near by 50 towns in 2003 and currently Jaipur Dairy has a network of over 5500 Retails outlets over Jaipur City and near by 100 towns. Outlets of Saras Categorization as under:

* Booths

* Shop Agencies

* Instituions

* Saras Parlour

Double Toned Milk

Composition:

Fat %(Min.)-1.5

SNF %( Min.)-9.0

Pack Size-1/2 & 1 liter, 5 liter

Self-Life/best before; 2 days from the date of packing when stored below 8 C⁰

Toned Milk

Composition:

Fat %(Min.)-3.0

SNF %( Min.)-8.5

Pack Size-1/2 & 1 liter, 5 liter

Self-Life/best before; 2 days from the date of packing when stored below 8 C⁰

Standard Milk

Composition:

Fat %(Min.)-4.5

SNF %( Min.)- 8.5

Pack Size-500ml& 1 liter

Self-Life/best before; 2 days from the date of packing when stored below 8 C⁰

Sanchi

Field Operation

The Field Operation activities begin with organization of Dairy Co-operative Societies in the rural areas and end with milk transportation to the dairy dock. The basic Field Operations include :-

Organization of Dairy Co-operative Societies on 'Anand' pattern.

Organizing milk producers farmers' training programs for formation of co-operatives, awareness to co-operative principles & milk production enhancement techniques etc..

Procurement and transportation arrangement of milk.

Providing Technical Input services to the milk producer farmers for milk production enhancement such as Animal Health Care (First Aid & Emergency), Artificial Insemination, Balanced Cattle feed and improved fodder seed etc.

Plant Operation

The plant operation activities begin with receipt of milk at the Chilling Centre / Dairy Dock and end with dispatch of milk & milk products for distribution. The basic activities of Plant Operations include :-

Reception of milk at Chilling Centre / Dairy Dock.

Testing of milk.

Milk Pasteurization

Milk Chilling

Milk Packing

Manufacturing & packing of Main products like Ghee, SMP, White Butter & Table Butter.

Manufacturing & packing of indigenous products like Shrikhand, Lassi, Peda, Salted & Plain Butter Milk, Flavored Milk etc.

Storage of products

Three Tier Structure of Dairy Cooperatives

SANCHI’S MILK PRODUCTSSanchi – Smart

Double Tonned MilkSanchi health is pasteurized double toned milk.Contains 1.5% fat and 9% solid not fat (SNF).It is homogenized milk which contains proteins,minerals and vitamins.Ideal milk (with less fat) for health consciouspersons.Available in 500 ml and 200 ml pouches in Ujjain, Bhopal,Gwalior, Indore and Jabalpur milk shed area.

Sanchi – Taza Tonned Milk

Pasteurized and homogenized toned milk.Contains 3% and 8.5% solid not fat (SNF).It is balanced milk suitable for every age group.Available in 200 ml, 500 ml and 1000 ml pouchesin Ujjain, Bhopal, Indore, Gwalior & Jabalpur milk shed area

Sanchi – Shakti Standardized MilkSanchi Shakti is pasteurized Standard Milk.Contains 4.5% fat and 8.5% solid not fat (SNF).It contains proteins, minerals and vitamins.

Ideal milk tea, curd and other homemade sweets.Available in 500 ml pouches in Ujjain, Bhopal,Gwalior Jabalpur and Indore milk shed area.

Sanchi – Gold High Fat MilkSanchi health is pasteurized full cream milkContains 6% and 9% solid not fat (SNF).It has high nutritive value with body buildingproteins, bone forming minerals and vitamins.Available in 500 ml and 1000 ml pouches inUjjain, Bhopal, Indore, Gwalior & Jabalpur milk shed area.

Sanchi – Urja Double Tonned Flavored MilkDouble toned sterilized flavored milkFree from micro organism harmful to consumer health. Underpacked conditions, does not need refrigerated storage.No formation of cream layer due to homogenization.Permitted fruit flavors / essences together with permitted(matching) colors and sugar are usedAvailable in 200 ml glass bottles and poly packs.Manufactured and sold by Bhopal, Indore, Ujjain, Gwalior &Jabalpur Sahakari Dugdha Sangh from their exclusive milk parlorsin towns and other agencies

Sanchi – Shrikhand

Semi-soft, sweetish-sour, whole milk product prepared bytraditional method from lactic fermented curdThe chakka is mixed with required amount of sugarand natural cardamomIt is available in 100gm and 500 gm plastic cups.Manufactured and sold by Bhopal, Indore, Jabalpur,Ujjain and Gwalior Sahakari Dugdha Sanghs from their exclusivemilk parlors in towns/railway station and other agenciesShelf life is 3 days when stored under refrigerationA delicious substitute for food when away from home and duringFasting

Milk

Butter Milk

Chah

Plain Butter Milk

Yoghurts

Shrikhand Sweet Curd Plain CurdPro-biotic Curd

    Lassi

Main Products

Ghee Skimmed Milk Powder                Table Butter

Sweets

Chhena Kheer Chhena Rabadi Peda

Others

Paneer Mawa Cow Ghee

Balanced Cattlefeed

Sudana Super Gold Sudana

PARAS DAIRY

PARAS’s history reflects back to 1960, when the procurement of milk started with 60 Liters of milk. The only fundamental that worked right from day one is the quality, which got reinforced everyday of progress. Ch. VedRam, the founder and promoter of our company is one of the connoisseurs in the dairy farm industry. Ved Ram & Sons started as our partnership company in April 1986. Our first unit was established in 1987 under company's name VRS Foods Limited and since then In tune with the rapidly changing technology, production units are well armed with the latest equipment. These facilities enable us to cater to the needs of our clients by selling over 2, 50,000 liters of milk per day in Delhi Metro.

MILK gets its unique, great taste from dedication to monitoring quality, special care, and attention to detail in the processing and packaging steps of production. Through our careful processing and packaging, we have been able to retain great taste.

Our product range include

Skimmed Milk powder (ADPI Extra Grade)

Whole Milk Powder - Regular & Instant

Acid & Rennet Casein

Caseinates (Na/Ca)

Sweet Whey Powder

Demineralised Whey Powders - 50,70 & 90

Lactose (Edible Grade)

Whey Protein Concentrate - 34%

Whey Protein Permeate

Milk Protein Concentrate - 70%

Ghee

UHT Processed Milk

OPERATING PROCEDURE OF MILK PROCUREMENT :

To meet out the milk requirement for manufacturing different milk products, VRS Foods Limited procures good quality milk from 3 sources:

(A). Through Franchise:

In this procedure we provide our Infrastructure for milk chilling, staff for grading & testing of milk and tankers for timely lifting of milk from MCC, to a person who procure milk on our behalf. Milk comes directly to our MCC dock, where after proper grading and testing milk is accepted.

(B). Through Supplier:

In this system, persons who have their own chilling facilities, procure milk through small vendors and after proper chilling of milk, send the milk to our dairies through their own tankers. At dairy, after proper testing on different parameters, if milk is found as per prescribed norms is accepted.

(C). Through VLC System ( Direct from producers at village level ):

Salient features of this system are as follows

(1) Procurement and collection of milk is undertaken with most modern management

systems and IT intervention. It involves use of Automatic milk collection Unit (AMCU/DPMCU). The person is selected as VSP after proper screening.

(2) The milk is collected in both shifts i.e. morning and evening throughout the year, through the village level milk collection centers. (VLCs).

(3) Each VLC is staffed and equipped with the following: - 

One educated person called village service provider (VSP), having a minimum qualification of matriculation, from the same village, who is adequately trained in clean milk production, collection and testing of milk, dispatching and transportation of milk, operating AMCU/DPMCU, pricing of milk, record keeping and reporting etc.

(4) Each VSP is required to have adequate space for collection and testing of milk, which can accommodate testing equipments, milk collection and transporting milk cans and keeping records etc.

(5) Each producer is trained in hygienic milking procedure and carrying milk in a steal bucket, with a cover on it to VLC.

(6) A team of qualified and trained supervisors is engaged to supervise & monitor the activities at VLC level. They also train, guide and facilitate the VSP to accomplish his task of procuring good quality milk from the producers.

(7) Milk from VLCs is brought to MCC through milk vans in 40 liter aluminum cans, as per the schedule time table so that quality of milk remains good and it is immediately chilled below 40C, to keep the quality of milk intact.

(8) At dairy dock of MCC, qualified staff is deputed for proper grading and testing of milk and as per norms, only good quality of milk is accepted .

(9) VRS Foods Ltd. Is already catering the demand of urban masses of milk & milk products through a network of distributors and through door-to-door delivery system, in NCR, Delhi and western part of UP.

(10) From Dairies as per the demand of market, milk & milk products are supplied through insulated vans so that quality of milk & milk products could be maintained as per norms and Govt. guidelines.

(11) The left out urban areas would be covered through direct selling of milk & milk products through distributors and vendors’ network.

PROCESSING & LOGISTICS:

To maintain the quality of milk procured from the rural areas approximately 100 milk chilling centers would be hired in the area of operation ( In the 5th year of operation ) so that within 2.30 hrs milk would be chilled afterprocurement.VRS Foods Ltd. Is having its processing units at Sahibabad, Gulaothi, Sandila and malanpur for providing milk and milk products to urban masses. These dairies will cater liquid milk and indigenous milk products demand of neighboring districts. These dairies are meeting the demand of butter, ghee, cheese and export quality milk products.From the dairies, milk and milk products would be transported through insulated vans to neighboring districts so that quality of milk & milk products could be maintained as per prescribed norms and guidelines.

SWOT ANALYSIS OF INDIAN DAIRY INDUSTRY

Strengths:Demand profile: Absolutely optimistic.

Margins: Quite reasonable, even on packed liquid milk.

Flexibility of product mix: Tremendous. With balancing equipment, you can keep on adding to your product line.

Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.

Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years.

Weaknesses:Perishability: Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely, many new processes will follow to improve milk quality and extend its shelf life.

Lack of control over yield: Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields.

Logistics of procurement: Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved.

Problematic distribution: Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why can’t we sell other dairy products too?Moreover, it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer’s home!

Competition: With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market islarge enough for many to carve out their niche.

Opportunities:"Failure is never final, and success never ending”. Dr Kurien bears out this statement perfectly. He entered the industry when there were only threats. He met failure head-on, and now he clearly is an example of ‘never ending success’! If dairy entrepreneurs are looking for opportunities in India, the following areas must be tapped:

Value addition: There is a phenomenal scope for innovations in product development, packaging and presentation. Given below are potential areas of value addition:

Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.

Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of resources and presence in the market place.

A lateral view opens up opportunities in milk proteins through casein, caseinates and other dietary proteins, further opening up export opportunities.

Yet another aspect can be the addition of infant foods, geriatric foods and nutritionals.

Export potential: Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.

Threats:Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance.

The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values (of quality/ethics).

The Indian dairy industry, following its delicensing, has been attracting a large number of entrepreneurs. Their success in dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place. All that needs to be done is: to innovate, convert products into commercially exploitable ideas. All the time keep reminding yourself: Benjamin Franklin discovered electricity, but it was the man who invented the meter that really made the money!

“Dairy industry plays an important role in the socio-economic development of India generating huge rural employment and providing cheap nutritional food to a vast population. The Indian dairy industry is growing rapidly, trying to keep pace with the galloping progress around the world. Currently, India is the world’s largest milk producer, accounting for more than 13% of world’s total milk production. In the last decade or so, the dairy boom has been most prominent in Asia, led by India and China, where increased prosperity and rapid growth of the middle-class has been triggering a significant rise in consumption”

BIBLIOGRAPHY

BOOKS

Kotler, Philip 2002,PHI(I) P.ltd., Marketing Management

Kothari, C.R.2001, Himayalayan Publications, Research Methodology

Magazines and news papers

a. Business Today

b. Business World

c. Economic Times

d. India Today

Websites

www.yahoo.cpm

www.rediff.com

http://www.amul.com/m/organisation

http://www.imarcgroup.com/dairy-industry-in-india/

http://www.authorstream.com/Presentation/manishkalra.20-1199219-mother-dairy/

http://sawaal.ibibo.com/colleges/what-distribution-process-mother-dairy-566926.html

http://pitchonnet.com/blog/2012/03/16/mother-dairy-milks-opportunities-in-new-markets/

http://en.wikipedia.org/wiki/Mother_Dairy

http://www.docstoc.com/docs/16506863/A-study-of-Mother-Dairy

http://mpcdf.nic.in/statistic.htm

http://mpcdf.nic.in/statistic.htm