India Dairy Products Market By Product Type, By End User, By Sales Channel, By Region, Competition, Forecast & Opportunities, 2020-2030F

India Dairy Products Market was valued at USD 25.04 Billion in 2024 and is expected to reach USD 32.56 Billion by 2030 with a CAGR of 6.76% during the forecast period. The India Dairy Products market is witnessing robust growth, owing to the increasing consumer demand for nutritious and protein-rich products, as dairy is a key component of the Indian diet. Rising health awareness has led to higher consumption of milk, yogurt, paneer, and other dairy products for their health benefits. Also, urbanization and changing lifestyles are contributing to a shift towards packaged and processed dairy products for convenience. With the growing middle class and increasing disposable incomes, consumers are opting for premium dairy products, such as organic milk and low-fat options. These trends, along with government support to improve dairy farming, continue to fuel market growth.

Key Market Drivers

Rapid Urbanization & Changing Retail Landscape

Rapid urbanization and the changing retail landscape are major drivers of the India dairy products market. As a part of this, according to a recent study, India's urban population is 461 million. This number is increasing by 2.3% per year. By 2031, cities are expected to generate 75% of India's national income. Providing the requisite urban infrastructure is a significant challenge. 70 to 80 percent of the infrastructure required by 2050 has not yet been developed, and the predicted investment gap amounts to around 827 billion US dollars. As more people migrate to urban areas for work and education, there is a significant increase in the demand for convenient and ready-to-consume dairy products. Urban consumers have a higher preference for packaged, processed, and branded dairy items, such as milk, yogurt, cheese, and butter, due to their easy availability, longer shelf life, and consistent quality. The growth of modern retail formats, including supermarkets, hypermarkets, and online grocery stores, has further facilitated access to a wide range of dairy products, enabling consumers to make more informed choices.

Also, the rise of e-commerce platforms has allowed for greater convenience in purchasing dairy products, especially in tier-2 and tier-3 cities where traditional retail outlets may be limited. The increasing number of convenience stores and local retailers in urban areas is also helping expand the reach of dairy products. As a result, these retail advancements are making dairy products more accessible and driving consumption across urban India. Also, the changing lifestyle, with a focus on health-conscious eating and convenience, is prompting consumers to opt for fortified dairy products, plant-based alternatives, and premium dairy items, contributing to the market's growth.

Growing Innovation by Key Players

Growing innovation by key players is a significant driver in the India dairy products market. As consumer preferences evolve, dairy companies are increasingly focusing on product innovation to cater to a diverse and health-conscious population. As a part of this, as of June 2023, Aashirvaad Svasti, one of West Bengal's major dairy brands, has announced the regional launch of its latest milk offering, 'Aashirvaad Svasti Daily'. The new product is designed to provide women with access to high-quality milk that will meet their family's daily milk requirement without breaking the bank. Mothers are reducing their monthly budget for necessities, including milk, as food prices have risen over the past year. While the trend appears to be similar across India, according to an independent research firm, the monthly average milk consumption per household in Kolkata has decreased by 9.6 percent over the last year. Innovations such as fortified milk, probiotic yogurts, low-fat and sugar-free dairy products, and plant-based dairy alternatives are becoming more popular. These products are being developed to meet the rising demand for healthier and more sustainable options, particularly among urban and health-conscious consumers.

Leading dairy companies are also leveraging advanced technologies in processing, packaging, and distribution to improve product quality, shelf life, and convenience. For instance, innovations like vacuum packaging, ultra-high-temperature (UHT) milk, and resealable packaging are enhancing the convenience and freshness of dairy products, which is appealing to busy consumers. Also, companies are experimenting with new flavors, textures, and formulations, such as flavored milk, cheese varieties, and ready-to-eat dairy snacks, catering to the growing demand for variety and taste. These innovations not only help companies differentiate their offerings but also expand their customer base. By responding to the evolving preferences and needs of consumers, dairy brands are driving market growth and gaining a competitive edge in an increasingly crowded market.

Expansion of Foodservice Sectors

The expansion of the foodservice sector is a key driver in the growth of the India dairy products market. As a part of this, as of September 2024, Speciality locations, India's first publicly listed restaurant firm, which owns and manages brands such as Mainland China, Asia Kitchen by Mainland China, and Oh! Calcutta, expects to open 40-50 locations in the next three years and will expand both in India and worldwide. As the Indian foodservice industry continues to evolve, with an increasing number of restaurants, cafes, and quick-service restaurants (QSRs), the demand for dairy products has surged. Dairy ingredients such as milk, cream, butter, cheese, yogurt, and paneer are integral to various food preparations across different cuisines, driving their increased usage in the foodservice industry.

With the rise of dining out and the growing trend of Western and fusion cuisine, there is a greater demand for a wide variety of dairy products, particularly cheese, yogurt, and milk-based beverages like lassi and smoothies. Also, the rise of fast-casual dining, delivery platforms, and cloud kitchens has further contributed to this demand. As foodservice providers focus on offering healthier options, there is also an increased demand for low-fat, organic, and fortified dairy products. Also, the expansion of the foodservice sector has led to innovations in product offerings, with manufacturers developing dairy-based ingredients tailored for foodservice needs, such as ready-to-use paneer, flavored dairy-based sauces, and pre-packaged desserts. This trend not only supports the growth of the dairy products market but also boosts the availability of these products in the foodservice sector, helping meet the growing consumption of dairy-based dishes in India.

Key Market Challenges

Supply Chain Issues

Supply chain issues present a significant challenge to the India dairy products market. Dairy products are highly perishable, requiring efficient and robust supply chains to ensure that products reach consumers in a fresh and safe condition. However, India's supply chain infrastructure faces several hurdles, including inconsistent cold storage facilities, transportation delays, and limited rural infrastructure. These issues can lead to spoilage, reduced product quality, and increased costs for manufacturers and consumers alike.

Also, fluctuations in milk production due to factors like weather conditions, seasonal variations, and feed shortages can disrupt the supply of raw materials for dairy products. This variability can cause price volatility and challenges in maintaining a steady supply of popular dairy products like milk and cheese. Small and medium-sized dairy producers, especially those operating in rural areas, often struggle with supply chain inefficiencies, further exacerbating the problem. The logistical challenges are compounded by the growing demand for packaged and processed dairy products, which require timely and efficient distribution across urban and rural markets. Inadequate cold storage and refrigerated transportation systems increase the risk of product spoilage during transit, leading to waste and potential financial losses. Addressing these supply chain inefficiencies is crucial for sustaining growth in the dairy products market and ensuring product availability at affordable prices.

Increased Competition Among Players

Increased competition among players is a significant challenge in the India dairy products market. With the rising demand for dairy products, both established and new brands are entering the market, intensifying competition. Large multinational companies, along with domestic players, are fighting for market share, driving up marketing and promotional costs. This competitive pressure often leads to price wars, which can erode profit margins, especially for smaller players who may not have the resources to offer significant discounts or invest in brand-building activities.

Also, the influx of private label brands and unbranded local dairy producers is further intensifying the competition. These players often provide lower-priced, unbranded products that appeal to budget-conscious consumers, particularly in rural areas. While these low-cost options can capture significant market share, they create difficulties for established brands that rely on premium pricing strategies. The intense competition also forces companies to continuously innovate and differentiate their products. Manufacturers must stay ahead by offering new flavors, value-added products, and improving quality to meet changing consumer preferences. The pressure to remain competitive leads to increased research and development costs, as well as investments in marketing, distribution networks, and packaging innovations. This competitive environment can challenge profit stability, especially for smaller players unable to compete at scale.

Key Market Trends

Rising Dairy for Organic Dairy Products

The rising demand for organic dairy products is a notable trend in the India dairy products market, driven by increasing consumer awareness about health, sustainability, and the desire for natural, chemical-free products. As consumers become more health-conscious, they are opting for dairy products that are free from pesticides, hormones, and antibiotics, which are commonly found in conventional dairy farming practices. Organic milk, ghee, yogurt, paneer, and other dairy products are increasingly sought after due to their perceived health benefits, including higher nutritional content and fewer artificial additives. This trend is particularly strong in urban areas, where consumers have greater disposable incomes and are more exposed to global health trends. Also, as environmental sustainability becomes a growing concern, organic dairy farming practices, which emphasize animal welfare, sustainable farming, and eco-friendly production methods, are gaining popularity among eco-conscious consumers.

Increased Consumption of Fast-Food Across the Region

The increased consumption of fast food across India is a significant trend influencing the dairy products market. As a part of this, as of November 2023, according to a World Health Organization (WHO) report, India's total consumption of ultra-processed foods has climbed by more than 90% since 2011.As urbanization and changing lifestyles continue to shape consumer behaviour, fast food consumption has risen dramatically, particularly among younger demographics and working professionals. Dairy-based products such as cheese, butter, milk, and cream are essential ingredients in a variety of fast-food items, including burgers, pizzas, pastas, and milkshakes. The growing popularity of quick-service restaurants (QSRs) and casual dining chains has led to an increase in demand for these dairy products.

This trend is further supported by the rise of delivery services and food aggregators like Zomato and Swiggy, making fast food more accessible to a broader consumer base, including those in smaller towns and cities. Fast food chains and restaurants are constantly innovating their menu offerings, incorporating dairy products like flavored yogurts, cheese-based snacks, and milk-based beverages to cater to changing tastes and preferences. Also, there is a rising demand for indulgent, comfort food that incorporates dairy, such as creamy sauces, desserts, and dairy-based beverages.

Rising Demand for Clean-Labelled Products

Rising demand for clean-labeled products is a prominent trend in the India dairy products market. As consumers become more health-conscious and seek transparency about what they are consuming, there is a growing preference for dairy products that feature clean and simple labels. Clean labeling refers to products that contain natural, minimally processed ingredients with no artificial additives, preservatives, or chemicals. This trend is particularly strong among urban and younger consumers, who are more informed about the potential health risks of consuming products with additives and artificial ingredients.

The demand for clean-labeled dairy products spans a variety of items, including milk, yogurt, cheese, butter, and ghee. Consumers are increasingly looking for dairy products that are free from synthetic hormones, antibiotics, and genetically modified organisms (GMOs). Brands that offer organic, grass-fed, or hormone-free dairy options are seeing higher sales, as these products align with consumers' desires for healthier, more natural food choices. This trend is also being driven by the increasing awareness of food safety and quality, with consumers becoming more cautious about the sourcing and production practices behind their food. As a result, dairy companies are innovating by simplifying their ingredient lists, promoting transparency in sourcing, and highlighting product quality to meet consumer expectations for clean-label products. This shift is reshaping the dairy market, as manufacturers adapt to the rising demand for purity and simplicity in food labeling.

Segmental Insights

Sales Channel Insights

Supermarket/Hypermarket dominated the India Dairy Products market, due to their extensive reach and convenience. These retail formats offer a wide range of dairy products under one roof, allowing consumers to access everything from milk and yogurt to cheese, butter, and premium dairy items. With an increasing number of urban consumers preferring one-stop shopping experiences, supermarkets and hypermarkets have become the go-to destinations for purchasing dairy products. Also, the availability of various local and international dairy brands, along with promotional offers and discounts, has made these retail outlets highly popular. The growing number of organized retail stores in urban and semi-urban areas continues to drive the dominance of supermarkets and hypermarkets in the market.

Regional Insights

The North region dominated the India Dairy Products market, driven by its large population, urbanization, and higher disposable incomes. Major cities like Delhi, Chandigarh, and Jaipur have a high demand for dairy products, with consumers increasingly opting for packaged milk, cheese, yogurt, and other dairy-based items. The region's established dairy infrastructure, including large-scale milk production and processing plants, further supports this dominance. Also, North India's growing middle class and the rise of modern retail outlets like supermarkets and hypermarkets contribute to the higher availability and accessibility of dairy products. As consumer preferences shift towards convenience and premium dairy options, the North region remains a key driver of market growth.

Key Market Players

• Britannia Industries Limited
• Dodla Dairy Limited
• Gujarat Co-operative Milk Marketing Federation Limited
• Hatsun Agro Product Limited
• Karnataka Milk Federation
• Mother Dairy Fruit & Vegetable Private Limited
• Nestle India Limited
• Parag Milk Foods
• Ananda Dairy Ltd
• Alpha Milk Foods Pvt. Ltd.

Report Scope:

In this report, the India Dairy Products Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

India Dairy Products Market, By Product Type:

• Butter
• Cheese
• Cream
• Dairy Desserts
• Milk
• Sour Milk Drinks
• Yogurt

India Dairy Products Market, By End User:

• Residential
• Commercial

India Dairy Products Market, By Sales Channel:

• Supermarket/Hypermarket
• Convenience Stores
• Online
• Others

India Dairy Products Market, By Region:

• North
• South
• East
• West

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the India Dairy Products Market.

Available Customizations:

India Dairy Products Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).