Milk Market in India & Opportunities for private players like Hatsun Agro Products
India is the largest milk producer in the world having nearly 45 crores liters of milk being produced daily. Out of this, an estimated 22 crores liters of milk per day is self-consumed and/or does not have the necessary infrastructure to reach the markets. This leaves around 23 crores liters of milk for being procured by co-operatives, un-organized private dairies and organized private dairies.
When we think about milk, the one name that comes to our mind is that of AMUL. AMUL is the largest co-operative milk federation having a huge number of co-operative societies connected and thereby procuring more than 1.8 crore liters of milk per day. Even after having such high procurement daily, Amul is only procuring 4% of India's total milk production or 9% of milk commercially available. Out of these 1.8 crore liters of milk that Amul procures, more than 40% of it comes only from the state of Gujarat.
Against this, the total procurement done by private dairies procuring over 2 lakh liters of milk per day is still far smaller at around 2 crores liters per day. Additionally, milk is such an industry that will continue to see consistent long-term growth in terms of volume and premiumization leaving large opportunities to scale for few players having ambition and capacity to grow beyond the small territory of their own.
Hatsun Agro Products, the largest private dairy in India, is one of the few companies in the sector to achieve large scale in direct milk procurement, create required infrastructure, and establish good consumer product brands. Based on its track record, ambition and execution capabilities, we think that Hatsun will be able to achieve greater success in multiple states and grow very well over the next decade or so.
To find more details, please see the presentation: Prospero Tree Dhruvesh Sanghvi 28Jul18 Presentation
The above presentation was recently presented at AlphaIdeas 20-20 event having Bloomberg Quint as the media partner. Here is the recorded presentation link as well.