Yoghurt in India-Market Report
Headlines
·
Yoghurt and sour milk drinks
posts current value growth of 23% in 2008 to reach Rs5.8 billion
·
Health benefits dominate
promotions and positioning
·
Sour milk drinks the strongest
performer with current value growth of 26% in 2008
·
Unit price of spoonable yoghurt
increases in 2008 in line with global and domestic milk price rises
·
Karnataka Cooperative leads
with a 26% value share
·
Yakult enters the Indian market
·
Forecast growth expected to
bring strong constant value CAGR of 17%
Trends
·
Indians, especially urban
Indians, are increasingly becoming more health-conscious about the food they
eat and are willing to pay a premium for health benefits. Yoghurt
manufacturers, whether dairy co-operatives or private players, have tapped into
this trend successfully. Awareness of pro biotic products has also increased in
the country, thus aiding the development of pro biotic yoghurt brands. Yoghurt
is not a new concept in India and it its health benefits are well known.
However, the bulk of yoghurt consumed is prepared at home, offering huge scope
for growth for manufacturers as consumers seeking convenience and quality are
shifting from the unorganised to the organised market.
·
Current value and volume growth
rates of spoonable yoghurt in 2008 were stronger than their respective review
period CAGRs, while the volume growth of sour milk drinks was lower than the
review period CAGR. As mentioned above, spoonable yoghurt is benefiting from
the shift from the unorganised to the organised market. The slowdown for sour
milk drinks can be attributed to increased competition from other beverages,
both dairy and non-dairy based.
·
Yoghurt is consumed on a
regular basis by most Indians and is part of the daily diet in most parts of
the country. However, as social structures change and more urban families are
becoming nuclear, consumers are switching to the convenience of packaged
yoghurt. Packaged yoghurt also offers consistency in quality, which can be
sometimes difficult to obtain at home depending on the weather conditions.
·
Yoghurt is sold in two forms in
India - either as ‘set’ yoghurt sold in cups, or sold as ‘loose/stirred’
yoghurt packaged in plastic pouches. Packaging adds to the cost, and set
yoghurt is almost twice the price of loose/stirred yoghurt. Loose/stirred
yoghurt is consumed on a daily basis in South India, and the region accounted
for almost 75% of the retail volume sales of spoonable yoghurt in 2006. Set yoghurt,
on the other hand, is sold and consumed in North and West India, where it is
mostly mixed with sugar and consumed as a dessert. All yoghurt sold in the
country was either set or stirred, with no drinking yoghurt brands available as
of 2008.
·
As milk procurement costs
increased, the unit price of yoghurt, and especially of spoonable yoghurt,
increased in 2008. However, the unit price of sour milk drinks did not see such
a rapid rise.
·
Soy-based yoghurts are not
common in India as awareness of soy milk remains low. Given the easy
availability and the nutritional value attached to dairy products, consumers
are more used to dairy-based offerings, and thus there was no demand for
soy-based yoghurt in 2008.
·
Fruited and flavoured yoghurts
are present but have a far lower penetration than plain spoonable yoghurt.
Indians traditionally consume plain yoghurt and fruited and flavoured yoghurts
do not generally appeal to the Indian palate. On the other hand, shrikhand – a
traditional flavoured yoghurt variant – is extremely popular in parts of West
and North India. However, most of its sales are in the unorganised market, with
the presence of sole national brand Amul from GCMMF in the organised market.
·
Yakult Danone India introduced
the first ever RTD pro biotic drink in New Delhi in December 2007. The product
is sold by the unique ‘Yakult ladies’ via door-to-door campaigns as well as
traditional distribution channels. Mother Dairy expanded its pro biotic
portfolio with the launch of Nutrifit, a fermented pro biotic milk available in
New Delhi and NCR in April 2008, after the previously successful launch of its
b-Activ probiotic curd and lassi. Targeted mainly at children, Nutrifit is
available in two flavours - mango and strawberry.
·
Although pro biotic yoghurts
have been introduced by Mother Dairy Fruit & Vegetable Ltd and Nestlé India
Ltd, their penetration remains very low and they remained niche products in
2008.
·
There is no segmentation by age
or gender in yoghurt, but there are regional differences in the manner in which
it is consumed. For example, while curd is consumed salty with rice or used in
curry preparation, in other parts of the country, such as North and East and
Northeast India, curd is eaten with sugar or with other wheat-based rotis or
pancakes.
Competitive Landscape
·
Karnataka Cooperative Milk
Producers Federation Ltd continued to lead retail sales of yoghurt and sour
milk drinks in 2007 with its Nandini brand. The brand benefits from being
present in the southern state of Karnataka where per capita consumption of
yoghurt is very high. Thus, even with a negligible presence in other states of
the country, it accounts for over a quarter of total retail value sales in the
organised market.
·
Both Karnataka Cooperative and
GCMMF improved their share in yoghurt and sour milk drinks in 2007. Mother
Dairy also saw strong retail value growth and maintained its share. Growth for
Mother Dairy came on the back of increasing demand in urban Delhi, where Mother
Dairy is based and has a strong distribution network and loyal consumers.
·
Mother Dairy continued its
focus on Delhi and reaped the benefits as urban consumers opted for the
convenience of packaged yoghurt. Nestlé India Ltd introduced Nesvita, its pro
biotic yoghurt brand, in the cities of Delhi, Mumbai and Bangalore. Given the
niche nature of the product, it is apt that the product was launched in these
cities first before a national roll-out.
·
As yoghurt and sour milk drinks
can be considered emerging dairy categories, there were no major advertising
campaigns implemented by leading players such as Karnataka Cooperative or
GCMMF. Advertising for most co-operatives was restricted mainly to print
advertisements in newspapers.
·
There are two formats of
yoghurt available - loose/stirred yoghurt and set yoghurt. Loose/stirred
yoghurt is sold in plastic pouches and is considered a standard mass-market
product. On the other hand, typically set yoghurt is sold in cups, is priced
higher and considered premium. The co-operatives enjoy better milk procurement
and as such their brands are cheaper than the more premium offerings of private
players like Nestlé.
·
There were no private label
brands in yoghurt and sour milk drinks in India in 2008.
·
Japanese pro biotics
manufacturer Yakult entered the Indian market in 2008 with a 50:50 joint
venture with French food major Danone. Yakult Danone India has set up a Rs1,360
million factory in Haryana, and has set a target of selling one million bottles
a day by 2010.
·
Domestic players dominate short
shelf life yoghurt. Nestlé and Yakult are the only multinational players in
yoghurt in India, with all others being domestic manufacturers. With the short
shelf life of traditionally consumed curd, it was necessary that the processing
facility was located close to consumers. The state-level dairy co-operatives
benefit in this regard. However, both GCMMF and Nestlé are present across the
country unlike the state-level cooperatives.
·
Yoghurt and sour milk drinks
did not see any major acquisitions or divestments over 2007-2008. With
state-level dairy cooperatives such as GCMMF and Karnataka Cooperative having
dairy farmers as members, these are generally not considered to be on a par
with players such as Nestlé, Heritage Foods (India) Ltd, etc in terms of
company equity.
Prospects
·
Plain spoonable and plain
stirred yoghurt are likely to remain the mainstay of yoghurt even though rising
health consciousness may help niche products like pro biotic yoghurt to develop
at a greater rate in leading metropolitan areas.
·
Yoghurt volume sales are likely
to increase thanks to new product developments and promotional activities. An
increasing number of consumers are predicted to move away from preparing
yoghurt at home, choosing to buy it instead. As a result, spoonable yoghurt is
expected to post a volume CAGR of 16% over the forecast period. Although
growing from a smaller base and thereby open to higher growth prospects, sour
milk drinks is not expected to maintain its review period CAGR of 25%, instead
posting a lower volume CAGR of 16% due to growing competition from both other
dairy and non-dairy based beverages.
·
With mounting upward price
pressure being felt across milk products, yoghurt too is expected to see unit
prices rise unless costs stabilise. A steep price hike would, however, benefit
local unorganised markets.
·
A sharp rise in the price of
yoghurt would be a threat as some consumers would switch to the unorganised
market as well as homemade products. Sour milk drinks will continue to be
threatened by other dairy/fruit-based beverages.
·
The unit prices of yoghurt and
sour drinks are expected to increase over the forecast period much like the
review period. With the highly fragmented competitive environment and consumer
loyalty for most brands already established, discounting is unlikely to be
used.
·
The rising health consciousness
in urban areas may act as the perfect backdrop for the launch of pro biotic
yoghurt and sour milk drinks. Based on the success of these brands, more
players are likely to enter this niche category.
Sector Data
2003 2004 2005 2006 2007 2008
Drinking yoghurt - - - - - -
(million litres)
Spoonable Yoghurt
('000 112.1 122.1 133.7 150.0 172.3 200.3
tonnes)
Yoghurt (not
calculable) - - - - - -
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
Rs million
2003 2004 2005 2006 2007 2008
Drinking yoghurt - - - - - -
Spoonable Yoghurt 2,637.0 2,886.0 3,175.6 3,604.4 4,511.1 5,520.9
Yoghurt 2,637.0 2,886.0 3,175.6 3,604.4 4,511.1 5,520.9
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% volume growth
2007/08 2003-08 CAGR 2003/08 TOTAL
Drinking yoghurt - - -
Spoonable Yoghurt 16.3 12.3 78.7
Yoghurt - - -
Source: Official statistics, trade associations,
trade press, company research, store checks, trade interviews, Euromonitor
International estimates
% current value
growth
2007/08 2003-08 CAGR 2003/08 TOTAL
Drinking yoghurt - - -
Spoonable Yoghurt 22.4 15.9 109.4
Yoghurt 22.4 15.9 109.4
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% value analysis
Soy-based Dairy-based Total
Yoghurt - 100.0 100.0
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
2004 2005 2006 2007 2008
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
2004 2005 2006 2007 2008
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% retail value
rsp
Company 2003 2004 2005 2006 2007
Karnataka
Cooperative 22.5 22.5 25.5 26.0 26.5
Milk Producers
Federation Ltd
Gujarat
Co-operative 11.0 11.0 12.5 13.8 15.0
Milk Marketing
Federation Ltd
Tamil Nadu
Cooperative 8.5 9.0 9.0 9.0 9.0
Milk Producers
Federation Ltd
Nestlé India Ltd 8.5 8.5 8.5 8.7 9.0
Kerala
Cooperative Milk 7.5 8.0 8.0 8.0 7.5
Marketing Federation Ltd
Mother Dairy
Fruit & 6.5 6.0 6.0 7.4 7.5
Vegetable Ltd
Orissa State 1.0 2.0 2.5 2.6 2.6
Cooperative Milk
Producers Federation
Ltd, The
Andhra Pradesh
Dairy 2.0 2.0 2.0 2.0 2.0
Development Cooperative
Federation Ltd
Heritage Foods
(India) 2.0 2.0 2.0 1.8 1.8
Ltd
Bihar State Co- 1.5 1.4 1.6 1.7 1.7
operative Milk
Producers Federation Ltd
Others 29.0 27.6 22.4 19.0 17.4
Total 100.0 100.0 100.0 100.0 100.0
Source: Trade associations, Trade press,
Company research, Trade interviews, Euromonitor International estimates
% retail value
rsp
Brand Company 2004 2005 2006 2007
Nandini Karnataka
Cooperative 22.5 25.5 26.0 26.5
Milk
Producers
Federation
Ltd
Amul Gujarat
Co-operative 11.0 12.5 13.8 15.0
Milk
Marketing
Federation
Ltd
Aavin Tamil
Nadu Cooperative 9.0 9.0 9.0 9.0
Milk
Producers
Federation
Ltd
Fresh'n' Natural
Dahi Nestlé India Ltd - - 8.7 9.0
Milma Kerala
Cooperative Milk 8.0 8.0 8.0 7.5
Marketing
Federation Ltd
Mother Dairy Mother Dairy
Fruit & 6.0 6.0 7.4 7.5
Vegetable
Ltd
Omfed Orissa
State 2.0 2.5 2.6 2.6
Cooperative
Milk
Producers
Federation
Ltd,
The
Vijaya Andhra
Pradesh Dairy 2.0 2.0 2.0 2.0
Development
Cooperative
Federation
Ltd
Heritage Heritage
Foods (India) Ltd 2.0 2.0 1.8 1.8
Sudha Bihar
State Co- 1.4 1.6 1.7 1.7
operative
Milk
Producers
Federation Ltd
Dahi Nestlé
India Ltd 8.5 8.5 - -
Others 27.6 22.4 19.0 17.4
Total 100.0 100.0 100.0 100.0
Source: Trade associations, Trade press,
Company research, Trade interviews, Euromonitor International estimates
2008 2009 2010 2011 2012 2013
Drinking yoghurt - - - - - -
(million litres)
Spoonable Yoghurt
('000 200.3 235.0 277.8 323.4 372.9 424.8
tonnes)
Yoghurt (not
calculable) - - - - - -
Source: Official statistics, trade
associations, trade press, company research, trade interviews, Euromonitor
International estimates
Rs million
2008 2009 2010 2011 2012 2013
Drinking yoghurt - - - - - -
Spoonable Yoghurt 5,520.9 6,581.0 7,768.7 9,093.5 10,538.9 12,100.2
Yoghurt 5,520.9 6,581.0 7,768.7 9,093.5 10,538.9 12,100.2
Source: Official statistics, trade
associations, trade press, company research, trade interviews, Euromonitor
International estimates
% volume growth
2012/13 2008-13 CAGR 2008/13 TOTAL
Drinking yoghurt - - -
Spoonable Yoghurt 13.9 16.2 112.1
Yoghurt - - -
Source: Official statistics, trade
associations, trade press, company research, trade interviews, Euromonitor
International estimates
% constant value
growth
2008-13
CAGR 2008/13
TOTAL
Drinking yoghurt - -
Spoonable Yoghurt 17.0 119.2
Yoghurt 17.0 119.2
Source: Official statistics, trade
associations, trade press, company research, trade interviews, Euromonitor International
estimates
