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The Indian dairy industry has been attracting many international and national players for establishing a successful business empire. The growth and potential of the Indian dairy industry has generated a sense of curiosity among investors for being a part of this gigantic emerging business industry.
According to statistics, India is the world's largest producer and consumer of dairy. India's dairy industry is expected to maintain growth at a CAGR of 14% to 15% over 2016 to 2021.
The growth would be primarily driven by increase in the demand for value-added milk products. Value-added products are expected to grow at 19%-20% and liquid milk is expected to maintain a growth rate of 3%-5%.
Danone to re-enter the Indian dairy market
Danone, the French food giant is planning to re-enter the Indian dairy industry with a whopping Rs 182 crore investment in homegrown premium yogurt maker ‘Epigamia’. The move is expected to help the brand retain a presence in the Indian business, executing all the past plans successfully.
Exactly, a year after withdrawing its service from the Indian dairy industry, Danone is again trying to target one of the fastest growing consumer packaged goods and dairy market.
According to news reports, while confirming the deal, Laurent Marcel, MD, Danone’s investment arm says, “This is a minority venture investment, so Epigamia will continue to operate independently. Danone would collaborate with Epigamia in areas of brand management, distribution expansion, manufacturing, quality and food safety, though the investment would be independent of Danone’s business in India.”
Why Danone initially failed?
The French giant was unable to make it big in the Indian dairy industry because of several major factors. Danone was unable to build a supply chain and a distribution network that could take on the local rivals like Amul, Mother Dairy, Nestle India Ltd.
Grabbing a foothold from the highly penetrated domestic players in the Indian dairy industry emerged as one major challenge that caused the brand to shut down its services.
Why Dairy Business is growing in India?
India has emerged successfully as the global economic power for the last couple of years. As the Indian dairy industry is hugely contributing to this increasing economical condition, investors are gradually investing more into this sector for achieving quick success while having certain advantages on their side.
Additionally, the Indian dairy industry offers gainful employment and supplementary income to a large number of people. As the Indian dairy sectors are significantly contributing to poverty reduction, the demand for this segment is witnessing no stopping, eventually making it one of the most profitable businesses to start in India.
