A Study on Dairy products distribution and Marketing

1.1 Industry Profile:

Origin of Industry
Dairying is the production and marketing of milk, usually cows milk product. It includes the
case of cow of cows breeding, feeding, management product. The milk must be collected,
processed into dairy products and markets. All these operations have been improved by
physiological, genetic, nutritional, chemical, microbiological, technological, economical and
marketing research and development.
Cattle, goat and sheep have kept by man for the production of milk since immemorial. Milk
butter and cheese were common food of the people in those days. Hindu Vedas written before
1200 BC mentioned the use of butter as food. The Mongols in the middle ages prepared
concentrated milk in the past and probably dairy form and used them as a time of civil war by
Americans. Grim odes British patent for producing dried milk was issued 1855. But large
production of dried milk did not being until 50 years.
Growth and Development of the Industry
Early man found that the goat and sheep produced enough milk for his family. As the need of
milk increased, the cow becomes established as a producer of milk in large scale. By 18th
century, the practice of selective breeding was established. It has been said that cow is machine
that converts raw materials (plant) into food in a surprisingly deficient manner. The method by
which cattle are managed in order to produce milk can be accomplished in many ways.
Milk may be defined as the whole fresh, clean, lacteal secretion obtained by the complete
milking of one or more healthy milch animals (cow, buffalos). Milk is the only food, which is
designed by nature solely as a food. It serves as the foundation of an adequate diet. As milk
Contains protein, vitamin and fats, it is very important for pregnant mothers, growing children,
adolescent, adult, convalescents and patients alike. In the 20th venture the diary.
The dairy industry is witnessing rapid changes. In search of better returns, the industry is
widening its focus to include traditional milk products, and these are emerging as new profit
centres for the organised sector.
As of now, ethnic dairy products account for 90 per cent of all dairy products consumed in India,
according to Mr P.R. Gupta, Editor, and Technology of Indian Milk Products.
A Dairy India publication, this handbook on process technology modernisation has been
authored by dairy professionals such as Dr R.P. Aneja, former Managing Director of National

Dairy Development Board (NDDB) and President of the Indian Dairy Association; Dr B.N.
Mathur, Director, National Dairy Research Institute, Karnal; Dr R.C. Chandan, President of
Global Technologies Inc; and Mr A.K. Banerjee, Dairy Consultant and former Managing
Director of the Bihar State Dairy Corporation.

Present Status of the Industry

Over the last two decades, institutes such as the National Dairy Research Institute and NDDB
have made possible assembly line production of ethnic dairy products such as shrikhand, gulab
Jamoon, paneer, kulfi, mishti doi, dahi and lassi.
While established names in the Indian dairy industry such as Amul, Nestle, Britannia and Mother
Dairy have made deep inroads into this booming market, small companies are following by
example in regional markets.
Some examples are Aarey in Maharashtra, Aavin in Tamil Nadu, Nandini in Karnataka, Vijaya
and Visaka in Andhra Pradesh, Milma in Kerala, KC Das in Kolkata and Bangalore, Sugam in
Vadodara, Mahanand in Maharashtra, Verka in Punjab, Parag in UP, Sneha in MP and Parsi Dairy
Farm in Mumbai.

Organization Profile:
Aavin
The Dairy Development Department was established in 1958 in Tamilnadu. The
administrative and statutory controls over all the milk cooperatives in the State were transferred
to the Dairy Development Department on 1.8.1965. The Commissioner for Milk Production and
Dairy Development was made as the functional Registrar under the Tamilnadu Cooperative
Societies Act. With the adoption of 'Anand pattern' in the State of Tamilnadu, Tamilnadu Cooperative Milk Producers' Federation Limited was registered in the State on 1st February 1981.
The commercial activities of the Department such as Milk Procurement, Processing, Chilling,
packing and sale of milk to the consumers etc., hitherto dealt with by the Tamilnadu Dairy
Development Corporation Ltd., were transferred to the newly registered Tamilnadu Co-operative
Milk Producers' Federation Limited, popularly known as "Aavin".
In the wake of liberalization policy, private dairies have also entered into the field of dairying. As
per the directions of the Hon'ble Chief Minister of Tamilnadu high priority has been given for
improving the performance of milk Co-operatives by adopting a systematic approach and proper
strategy in Milk Co-operatives. Significant achievement has been made by Milk Producers'
Cooperative Societies, Unions and Federation in the State of Tamilnadu.
The cattle population in India is approximately 15% of total cattle population in the world. India
stood no. 1 position in milk production. Tamilnadu is one of the leading states in milk
production. The milk production in Tamilnadu per day is 145.88 Lakh liters.
Hatsun:
In just over four decades has become India's largest private sector company in the Dairy Industry
Milk from Select Fine Quality cows is collected from over 3 Lakh+ farmers, chosen with care in
8500 villages. Dairies in 10 locations possessing State-of-the-Art facilities, International Know
how and Personnel with Sound Experience & Expertise enable creation of products of excellent
quality meeting the very highest norms of Hygiene and Health. Dairy ingredients exported to 38
countries in the American, Middle East and South East Asian Markets. Holds various Quality
Standard Certifications including the prestigious ISO 9001 & ISO 22000.
Producing and marketing a wide range of Dairy Products Dairy Whitener, Skimmed Milk
Powder, Agmark Certified Ghee, Butter, Cooking Butter, Milk, Varieties of Curd, Paneer and
Buttermilk through the Brand Hatsun Milk & Milk Products. Arun Icecreams and Arokya Milk,
India's largest private sector milk brand , immensely popular across millions of households are
also produced and marketed by Company. Arun Icecreams, the Largest Selling Ice Cream in
South India was also the Winner of the Best Ice Cream in the Country award in The Great Indian
Ice Cream Contest 2008 & 2009 (National Level).

Agi Milk:
Agi Milk, a Proprietary concern, established by Mrs.G.Agilandeswari w/o D.Murugesan, No.66,
Prathabasimmapuram Srinivasapuram, Thanjavur who is a graduate in Microbiology. She is
having working experience in various dairy as a quality control Manager. The interest and
involvement in the dairy field convert her as entrepreneur. She is earning lot of knowledge
regarding dairy machinery, milk procurement, milk marketing, milk product manufacturing and
their market demand. Based on her study more than a year, she established a Dairy Processing
unit at Vallam Puthur Village near Thanjavur. For this purpose she has bought about 1.5 acres of
Industrial purpose land for the project. The sincere and dedication in her work made her a
successful entrepreneur. The plant capacity installed is 2 KLPH and the procurement is restricted
within 50 km radious to ensure the selflife of the product. AGI MILK is covering Thanjavur,
Thiruvarur, Nagapattinam, Pudhukkottai and Trichirapalli districts for marketing their products.
Tulya:
TULYA started its operation in the year 2003 with Dairy and Dairy products as its core business
under the Brand name CHAKRA. Milk and Milk products like Flavored Milk, Butter Oil,
Yoghurt, Butter and Peda are the Key products.
KC Milk:
KC MILK, The Dairy is located at Seethamara Naal Road, Vedasandur, Dindigul District,
Tamilnadu. The Company has been exploiting the potential of Hygienic and High Quality Milk
& Milk Products to the Society. The initial period, a diminutive quantity of Cow Milk procured
around the villages and sold the raw milk to various places of the district. The initial installed
capacity of the plant was 20,000 litres Milk per day, which was then increased to 50,000 litres at
two-shift basis. The capacity has further been enhanced to 1,00,000 litres milk per day in 2008.
The capacity expansion was necessitated by the excellent quality and services of all the products,
particularly the Toned Milk, Standardized Milk and Full Cream Milk. The expansion process
also included expansion of the covered area in the plant from 25000 sq.ft to 50,000 sq.ft.
KC Milk has certified for ISO 9001:2008 (Quality Management System), ISO 14001:2004
(Environment Management System) and ISO 22000:2005 (Food Safety Management
System) Certification and also obtained FSSRs (Food Safety and Standards
Regulations) Certification from Central Licensing Authority of India under Food Safety and
Standards Act 2006. The company also commissioned 2nd Unit at S.F.No. 482/6A1, Usilampatti
Main Road, Kunnuvarayan Kottai Village, Batlagundu District. The Unit is designed for
handling of 3,00,000 litres Milk per day. The Brand KC MILK is Registered as a Trade Mark
under Copy Right Act.

1.2 Background of the Study:

The importance of dairying in a country like India hardly needs emphasizing. India has vast
resources of livestock, which play an important role in the national economy and also in the
socioeconomic development of millions of rural households. India has one of the largest stocks
of cattle and buffaloes: more than 50 percent of the world's buffaloes and 20 percent of its cattle.
The Indian dairy sector contributes a large share of the agricultural gross domestic product
(GDP). Although the contribution of agriculture and allied sectors to the national GDP has
declined during the past few decades, the contribution of the livestock sector has increased from
less than 5 percent in the early 1980s to over 6 percent in the late 1990s. Milk and milk products
constitute a major share of the value of output from the livestock sector; their share increased
from less than 50 percent in 1950-51 to about 65 percent in the late 1990s.
During the 1950s and 1960s, India was one of the largest importers of dairy products, importing
over 40 percent of milk solids in the total throughput of the dairy industry. The commercial
import of milk powder reached its peak at about 53 thousand tons in 1963-64 (Kanitkar, 1999).
This concerned policy makers, and a decision was made to achieve self-sufficiency in milk
production. The major step forward, which has had a far-reaching impact, came in mid-sixties
with the establishment of the National Dairy Development Board (NDDB) to oversee dairy
development in the country. The Operation Flood (OF) program, one of the worlds largest and
most successful dairy development programs, was launched in 1970; its main thrust was to
organize farmers' cooperatives in rural areas and link them with urban consumers. Operation
Flood has led to the modernization of India's dairy sector and has created a strong network for
procurement, processing, and distribution of milk by the cooperative sector. In 1989, the
Government of India launched the Technology Mission on Dairy Development (TMDD)
program to support and supplement the efforts of Operation Flood and to enhance rural
employment opportunities and income generation through dairying.
India is currently the largest producer of milk in the world, overwhelmingly thanks to the output
of millions of smallholder farms. The OF cooperative movement has been important in dairy
marketing in different parts of the country and undoubtedly has played an important role in
keeping smallholders involved with this fast-growing sector. During the past three decades, milk
production in the country has increased from about 22 million tons in 1970-71 to 84 million tons
in 2001-02 (GOI, 2003). The per capita availability of milk, which had decreased during the preOF period, not only kept pace with the growing population but increased from 107 grams in
1970 to 220 grams in 2000-01.
The Indian dairy industry is poised for dramatic growth in the coming decades. The population
growth, urbanization, income growth, high income elasticity of demand, and changes in food
habits that fueled the increase in milk consumption are expected to continue well into the new
millennium, creating a veritable Livestock Revolution. As these events unfold, not all the
changes are good, and they have major implications for poverty alleviation, environmental

sustainability, public health, and ethical concerns about the treatment of animals as sentient
beings. The rapid increase in demand for dairy products in developing countries has led to the
growth of milk-production activities in peri-urban areas, which are essentially detached from
their supporting land base. The demand for milk and dairy products is increasingly being met in
urban and peri-urban areas by industrial dairy farms, which often generate large amounts of
waste.
Traditionally, milk production in India has been closely integrated with crop production.
However, environmental problems escalate with the scale and intensity of operations, ranging
from the least worrisome in traditional systems to highly threatening in large-scale farms. The
pollution problem in rural areas is internalized, as the small amount of manure produced is used
as fuel or organic fertilizer to improve the soil for crop and fodder cultivation. In the commercial
production system, a large amount of waste is generated, which needs to be treated before its
disposal or use. Doing so requires not only careful planning but also large capital investments to
create the infrastructure for waste treatment and its economic disposal. The establishment of
large commercial dairy farms in urban areas may create some social problems. The growth
stimulus coming from the strong demand for livestock products is not transmitted to the rural
areas, where it could encourage rural development, more equitable distribution of income, and
poverty alleviation. Small producers find it difficult to compete with large commercial units due
to policy distortions. Milk production in rural areas generates supplementary income and
employment opportunities, which are adversely affected by the growth of commercial dairy
farms.

1.3 Objectives of the study:

The main objectives of the project are:The study consists of two folded objectives i.e. main objectives and additional objectives. The
main objective is to acquire practical knowledge about Dairy Distribution and Marketing. The
additional objectives are follows:

To identify the existing problem in Distribution, Marketing and Sales.

To identify the impact of new marketing channel communication on dairy industry

through online and mobile app.

To focus on SWOT technique to create new dairy business.