India is the largest producer and consumer of milk globally. The Indian dairy sector grew by 12% year-on-year in FY 12 and is expected to record a growth of 15.6% year-on-year in FY 16. While traditionally the dairy sector was largely engaged in producing liquid milk, the past two decades have seen a change in demographic and dietary patterns and now value added products have gained importance. Ice cream, yogurt, cheese,flavoured milk etc.,are seeing wide acceptance in the market.
During the last financial sector milk prices have increased due to rise in cost of cattle feeds. The milk inflation has adversely affected the margins of the players. The dairy sector in India is largely controlled by small players who supply milk to cooperative dairies as well as to government agencies. The unorganized sector accounts for close to 80% of the sector. Recent years have seen the entry of many international and domestic organized players into the sector and the year 2015 will see several new players entering the market