For years, the Delhi-NCR region, one of India’s largest liquid milk markets, was dominated by the two big players – Amul and Mother Dairy – with the presence of a few smaller brands and the neighbourhood doodhwala from the unorganised sector. However, all this is set to change, with the entry of two major players in the past few months, and another player repackaging itself, all in the hope of garnering a share of 5.5-6 million litres a day liquid milk market in Delhi and its adjoining cities. First it was Namaste India that entered the market, then Kwality Group’s new brand – Kwality Milk – and now Wholly Joy Milk. Mother Dairy has also started its own cow milk brand. Many other players are also expected to enter the market in the next few months to cash in on the winter demand. Though many old-timers said it is not the first time that Delhi has seen entry of new players or old ones with new branding, the difference this time seems to be the rush to capture the pouch milk market. Mother Dairy managing director S Nagarajan says Delhi-NCR market has space for everyone and it is good that new players are coming, which will be beneficial for both the consumers and farmers. Others feel because of the slump in global commodity prices, export of skimmed milk powder, casein and other products has dropped sharply, forcing manufacturers to look towards this domestic market. Skimmed milk powder (SMP) prices in the global markets had dropped to Rs 1,400-1,600 per tonne before settling at around Rs 2,200-2,300 per tonne, much lower than the peak rate of Rs 3,800-4,000 per tonne seen a few years back. The international price of SMP is around Rs 135-140 per kg, while the domestic market is hovering around Rs 170-175 per kg and the cost of production is around Rs 210-220 per kg. To recover the cost, industry players said many big players are looking at the home market. Kuldeep Saluja, managing director of Sterling Agro Industries, makers of Nova Milk brand, feels the new players are joining the market because its demand is fairly constant as compared to other milk products like icecreams and ghee, and it is also growing at the rate of 9-10 per cent. New players are foraying into this space in Pune and other cities as well. However, he warns those who want to join this market to be ready to face high logistics costs. R S Khanna, chairman of Kwality Dairy (India ) says the market is among the fastest growing segments in milk and is also a stable area to enter. Kwality was earlier present in the liquid milk market under the brand name ‘Dairy Best’. Khanna says the development happening in the international market is separate and is not a big reason for major players showing renewed interest. Only those players who have a strong direct milk procurement system will be able to survive in this market, as without their own procurement it is difficult to manage the logistics, he adds. 

(Source : Business Standard, 8 November 2016)