Acknowledgement
Project Details
Analysis of Milk Industry
Indian Dairy Industry – Facts & Figures
Analyzing the product – Milk
Operation Flood
Cooperative Unions
National Dairy Development Board
About Mother Dairy
Other Major Players
Delhi’s (NCR) Milk Market
Objectives of Research
SWOT Analysis of Mother Dairy & Others
Recommendations
Project Submitted By: Vikash Kr. Singh
Page 1
Acknowledgement
At the very outset we would like to express our heartfelt gratitude to ‘Mother Dairy India Ltd.’
for allowing us to contribute, though modestly, in the functioning of WT-5, which has the
unique distinction of being the most competitive milk market of Asia by way of our research
project which we all found very interesting & challenging.
Our thanks are due to Mr.K.P.S. Chauhan who was very kind in explaining to us the challenge
that lay ahead of us & also for allowing us to make liberal use of his knowledge, resource &
patience.
We feel grateful to Mr. Venkatramani, for allowing & encouraging us to pursue our research
with utmost objectivity, fairness & flexibility.
We feel indebted to Mr. Kumar & Mr. Anil Grover for explaining to us the intricacies &
peculiarities of milk business which came handy on various occasions & allowed us to retain our
focus & finish our research with the satisfaction of a job well done.
We would also like to thank all those people at ‘Mother Dairy India Ltd.’ who though being
total strangers to us lifted our spirit with their cheerful smiles & gave us the courage &
inspiration to work zealously on the project assigned to us & do justice to it.
I am extremely thankful to my Faculty Guide Dr. Anurika vaish at Indian Institute of Information
Technology for her invaluable Guidance and Suggestions during my Training.
We all would also like to express our gratitude towards our parents from whom we have
inherited all the desired virtues & to whom we look up to as living inspirations.
Last, but by no means the least, we would like to pay obeisance to the Almighty God for
bestowing on us his blessings & also for being on our side when the challenge seemed
insurmountable & the going was tough. Our unshakeable faith in Him allowed us to take this
research to its logical conclusion.
Project Submitted By: Vikash Kr. Singh
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Project Details
Name of the company:
“Mother Dairy India Ltd.”
Title of the project:
Probing the reason(s) for low sales & suggesting
remedial measures thereof.
Type of project:
Research based marketing project.
Duration of project:
1 week (from June 10 to June 17, 2011)
Number of team members:
5
Area under research:
Mother Dairy, Patparganj, Delhi
Project Submitted By: Vikash Kr. Singh
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Analysis of Milk Industry
Traditionally, in India dairying has been a rural cottage industry. Semi-commercial dairying
started with the establishment of military dairy farms and co-operative milk unions throughout
the country towards the end of the nineteenth century.
In earlier years, many households owned their own ‘family cow’ or secured milk from a
neighbor who had one. With the increase in urban population fewer households could afford to
keep a cow for private use & moreover there were other problems also like the high cost of
milk production, problems of sanitation etc. restricted the practice; and gradually the family
cow in the city was eliminated and city cattle were all sent back to the rural areas.
Gradually farmers living near the cities took advantage of their proximity to the cities & began
supplying milk to the urban population; this gave rise to the fluid milk-sheds we see today in
every city of our country.
Prior to the 1850s most milk was necessarily produced within a short distance of the place of
consumption because of lack of suitable means of transportation and refrigeration.
The Indian Dairy Industry has made rapid progress since Independence. A large number of
modern milk plants and product factories have since been established. These organised dairies
have been successfully engaged in the routine commercial production of pasteurized bottled
milk and various Western and Indian dairy products. With modern knowledge of the protection
of milk during transportation, it became possible to locate dairies where land was less
expensive and crops could be grown more economically.
In India, the market milk technology may be considered to have commenced in 1950, with the
functioning of the Central Dairy of Aarey Milk Colony, and milk product technology in 1956 with
the establishment of AMUL Dairy, Anand.
Indian dairy sector is still mainly an unorganized sector as barely 10% of our total milk
production undergoes organized handling.
Project Submitted By: Vikash Kr. Singh
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Indian Dairy Industry –Facts & Figures
Beginning in organized milk handling was made in India with the establishment of Military Dairy
Farms.
Handling of milk in Co-operative Milk Unions established all over the country on a small scale in
the early stages.
Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945
Pasteurization and bottling of milk on a large scale for organized distribution was started at
Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961), Madras (1963) etc.
Establishment of Milk Plants under the Five-Year Plans for Dairy Development all over India.
These were taken up with the dual object of increasing the national level of milk consumption
and ensuing better returns to the primary milk producer. Their main aim was to produce more,
better and cheaper milk.
Milk Production
India's milk production increased from 21.2 million MT in 1968 to 88.1 million MT in
2003-04.
India is the largest producer of Milk in the World (replacing USA)
Per capita availability of milk presently is 231 grams per day, up from 112 grams per day
in 1968-69.
India's 3.8 percent annual growth of milk production surpasses the 2 per cent growth in
population; the net increase in availability is around 2 per cent per year.
Marketing
In 2004-05, average daily cooperative milk marketing stood at 155 lakh litres, registering
a growth of 4.2 percent over 148.75 lakh litres in 2003-04.
Dairy Cooperatives now market milk in about 200 class cities including metros and some
550 smaller towns.
During the last decade, the daily milk supply to each 1,000 urban consumers has
increased from 17.5 to 52.0 litres.
Innovation
Bulk-vending - saving money and the environment.
Project Submitted By: Vikash Kr. Singh
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Milk travels as far as 2,200 kilometers to deficit areas, carried by innovative rail and road
milk tankers.
Ninety-five percent of dairy equipment is produced in India, saving valuable foreign
exchange.
Macro Impact
The annual value of India's milk production amounts to about Rs. 880 billion.
Dairy cooperatives generate employment opportunities for some 12 million farm
families.
Dairy Farming is the single largest contributor to the economy(5% of GDP &13% of
employment)
Dairy industry represents a huge opportunity being the largest single FMCG Market:
Urban Mkt size Rs 33000 Crores and organized sector Rs 11000 Crores representing a
huge opportunity for conversion and growth.
Key challenges before Indian Dairy Industry are as follows:
• Ensuring Quality
• Procurement and efficiencies in supply chain
• Product differentiation and value addition
Per Capita Monthly Consumption Expenditure on Broad Groups of Items
NSS Round
Milk and
Milk
Products
(in Rs.)
Meat, Egg, Total
Fish
Food
Total
Total
Non- Food Exp.
Average
Size of
Household
27th (1972 - 1973)
Rural
3.22
1.09
32.16
12.01
44.17
5.22
Urban
5.91
2.07
40.84
22.49
63.33
4.72
1.84
44.33
24.56
68.89
5.22
32nd (1977 - 1978)
Rural
5.29
Project Submitted By: Vikash Kr. Singh
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Urban
9.16
3.33
57.67
38.48
96.15
4.89
Rural
8.45
3.40
73.73
38.71
112.45 5.20
Urban
15.15
5.92
96.97
67.06
164.03 4.85
38th (1982)
42nd(1986 - 1987)
Rural
13.48
5.25
92.55
48.38
140.93 5.26
Urban
23.32
9.25
128.99 93.66
222.65 4.79
43rd(1987 - 1988)
Rural
13.63
5.11
100.82 57.28
158.10 5.08
Urban
23.83
8.85
139.75 110.18
249.93 4.71
44th(1988 - 1989)
Rural
15.65
6.12
111.80 63.30
175.10 5.17
Urban
26.74
10.59
152.49 114.36
266.85 4.87
45th(1989 - 1990)
Rural
18.35
6.84
121.78 67.68
189.46 4.96
Urban
29.53
11.42
165.46 132.54
298
4.66
46th (1990 - 1991)
Rural
19.04
7.08
133.34 68.78
202.12 4.81
Urban
32.37
12.27
185.77 140.00
326.75 4.55
47th (July - Dec. 1991)
Rural
21.90
8.20
153.59 89.91
243.50 5.00
Urban
37.21
13.49
207.77 162.57
370.34 4.73
48th (Jan. - Dec. 1992)
Rural
23.00
8.00
161.00 87.00
247.00 5.20
Urban
42.00
14.00
224.00 175.00
399.00 4.80
9.00
159.00 85.00
244.00 5.10
49th(Jan. - June 1993)
Rural
23.00
Project Submitted By: Vikash Kr. Singh
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Urban
41.00
14.00
221.00 162.00
382.00 4.60
50th(July 1993 - June 1994)
Rural
27.00
9.40
178.00 104.00
281.00 4.90
Urban
45.00
15.50
250.00 208.00
458.00 4.50
51st (July 1994 June 1995)
Rural
27.00
10.00
189.00 121.00
309.00 4.90
Urban
49.00
17.00
271.00 237.00
508.00 4.60
52nd (July 1995 June 1996)
Rural
32.38
10.94
207.75 136.53
344.29 5.00
Urban
56.45
19.11
299.98 299.28
599.26 4.60
53rd (Jan-Dec 1997)
Rural
39.31
11.79
231.99 163.02
395.01 5.00
Urban
62.75
19.58
320.26 325.19
645.44 4.60
54th (Jan- June 1998)
Rural
36.54
12.65
232.40 149.67
382.07 5.00
Urban
64.63
21.94
339.71 344.57
684.27 4.70
55th (July 1999 June 2000)
Rural
42.56
16.14
288.80 197.28
486.07 5.00
Urban
74.18
26.77
410.10 444.10
854.96 5.00
Source: Basic Animal Husbandry Statistics, 2004, GOI.
Project Submitted By: Vikash Kr. Singh
Page 8
Share of Agriculture and Livestock Sector in GDP
(At current prices in Rs. Billion)
Year
GDP
(Total)
GDP (Agriculture)
Rs.
GDP (Livestock Sector)
%
Share
Rs.
%
Share
1980-81
1,224
425
34.72
59
4.82
1985-86
2,338
700
29.94
139
5.95
1986-87
2,600
744
28.62
156
6.00
1987-88
2,949
835
28.31
183
6.21
1988-89
3,527
1,041
29.52
217
6.15
1989-90
4,087
1,154
28.24
275
6.73
1990-91
4,778
1,352
28.30
308
6.45
1991-92
5,528
1,593
28.82
375
6.78
1992-93
6,307
1,779
28.21
432
6.85
1993-94
7,813
2,218
28.39
507
6.49
1994-95
9,170
2,552
27.83
577
6.29
1995-96
10,733
2,778
25.88
650
6.06
1996-97
12,435
3,340
26.86
747
6.01
1997-98
13,901
3,535
25.43
819
5.89
1998-99
15,981
4,064
25.43
911
5.70
1999-00
17,618
4,224
23.98
992
5.63
2000-01
19,030
4,235
22.25
1093
5.74
2001-02
20,910
4,730
22.62
1187
5.68
2002-03
22,495
4,560
20.27
1209
5.37
* Provisional; ** Quick Estimate; Source : Central Statistical Organization, Dept. of
Statistics, GOI
Project Submitted By: Vikash Kr. Singh
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Dairy Cooperatives- Progress on Key Parameters during 2003-04 *
States/UT
Andhra Pradesh
Assam
Bihar
Chhattisgarh
DCS #
Women
Members
('000)
Procurement
Marketing
(Nos)
Farmer
Members
('000)
(TKGPD) $
(TLPD) $
5072
756
143
950
898
65
3
0
4
8
4657
240
36
396
288
424
19
4
18
28
DELHI
Goa
1937
169
19
3
43
89
Gujarat
11400
2360
540
5102
2101
Haryana
4219
230
30
331
153
Himachal Pradesh
283
21
6
25
15
Jammu & Kashmir
**
**
**
**
Jharkhand
80
2
0
6
163
Karnataka
9293
1737
444
2243
1518
Kerala
3208
706
125
614
738
Madhya Pradesh
4699
231
33
294
296
18349
1582
366
2680
2629
76
3
0
2
4
1654
122
54
127
132
96
32
14
54
53
Punjab
6892
402
42
745
496
Rajasthan
9643
534
111
1036
855
189
7
0
9
7
7631
1988
717
1664
1206
84
4
1
2
9
Uttar Pradesh
18104
824
237
814
436
West Bengal
2287
172
59
324
816
108574
11994
2963
17483
14875
Maharashtra
Nagaland
Orissa
Pondicherry
Sikkim
Tamil Nadu
Tripura
All - India Total
Project Submitted By: Vikash Kr. Singh
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Milk Production
The Upside
Increasing awareness:
As India enters an era of economic reforms, agriculture, particularly the livestock sector, is
positioned to be a major growth area. The fact that dairying could play a more constructive role
in promoting rural welfare and reducing poverty is increasingly being recognized. For example,
milk production alone involves more than 70 million producers, each raising one or two
cows/buffaloes. Cow dung is an important input as organic fertilizer for crop production and is
also widely used as fuel in rural areas. Cattle also serve as an insurance cover for the poor
households, being sold during times of distress.
Supply matches demand:
Efforts to increase milk production by dairy farmers are strongly influenced by the degree to
which demand signals are transmitted through the marketing system. Cooperatives have played
an important role in transmitting the message of urban market demand to them. Since the
demand in the urban scenario is rapidly increasing so is the supply generated by the farmers.
Surplus capacity:
Further, the new dairy plant capacity approved under the Milk & Milk Products Order (MMPO)
has exceeded 100 million lpd. The new capacity would surpass the projected rural marketable
surplus of milk by about 40 per cent by 2005 AD.
The Downside
Technological gaps:
Several areas of the dairy industry can be strengthened by the induction of state-of-the-art
technologies from overseas. Those who bring in new technologies or sign joint ventures with
foreign companies stand to benefit the most. To make the best out of the present situation, the
following areas require immediate remedial action on the part of dairy entrepreneurs:
Project Submitted By: Vikash Kr. Singh
Page 11
Raw milk handling needs to be upgraded in terms of physiochemical and microbiological
attributes of the milk collected. The use of clarification and bactofugation in raw milk
processing can help improve quality of the milk products.
Better operational efficiencies are needed to improve yields, reduce waste, minimize
fat/protein losses during processing, control production costs, save energy and extend shelflife. The adoption of Good Manufacturing Practices (GMP) and HACCP would help manufacture
milk products conforming to international standards and thus make their exports competitive.
Latest packaging technology can help retain nutritive value of packaged products and extend
their shelf-life. For proper storage and transportation, cold chain needs to be strengthened.
Project Submitted By: Vikash Kr. Singh
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Analyzing the product - Milk
Milk- An almost complete food
Milk is not only an excellent source of Calcium, which is vital for strong bones and teeth; it also
contains many other vital nutrients like:
Protein: For growth and repair of body tissues.
Carbohydrates: In the form of lactose.
Fat: For energy.
It also contains Vitamins needed for good health; Vitamin A, B1, B2, B3, B12, FOLIC ACID and
Vitamin D are all found in significant quantities in milk.
A glass of milk provides 50% of the daily intake of calcium required by teenagers.
Demand & Supply Equations:
Supply:
Supply of milk is affected by the seasonal influences, in summers the milk supplies dip & in
winters it soars. Therefore, dairies generally make use of the surplus milk available with them
during winters for manufacturing milk powder so that they can meet the increased demand
during summers.
Demand:
Demand for milk is not very stable either, during festivals its demand increases exponentially .In
2003,for example, the demand during festivals surpassed even Mother Dairy’s projections & its
booth had to encounter a rare problem of being out of stock, a blot indeed on an otherwise
impeccable distribution system of Mother Dairy. Since then, to its credit Mother Dairy brought
efficiency in the system & reevaluated its strategy to encounter this problem & to be fair to
them they have lived to the expectations of its consumers by making milk easily available.
Project Submitted By: Vikash Kr. Singh
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Operation Flood
Launched in 1970, Operation Flood has helped dairy farmers direct their own development,
placing control of the resources they create in their own hands. A National Milk Grid links milk
producers throughout India with consumers in over 700 towns and cities, reducing seasonal
and regional price variations while ensuring that the producer gets a major share of the
consumers' rupee.
The bedrock of Operation Flood has been village milk producers’ cooperatives, which procure
milk and provide inputs and services, making modern management and technology available to
members. Operation Flood's objectives included:
o Increase milk production ("a flood of milk")
o Augment rural incomes
o Fair prices for consumers
Program implementation
Operation Flood was implemented in three phases
Phase I
Phase I (1970-1980) was financed by the sale of skimmed milk powder and butter oil gifted by the
European Union then EEC through the World Food Program. NDDB planned the program and
negotiated the details of EEC assistance.
During its first phase, Operation Flood linked 18 of India's premier milk sheds with consumers in
India's four major metropolitan cities: Delhi, Mumbai, Calcutta and Chennai.
Phase II Operation Flood's Phase II (1981-85) increased the milk sheds from 18 to 136; 290 urban markets
expanded the outlets for milk. By the end of 1985, a self-sustaining system of 43,000 village
cooperatives covering 4.25 million milk producers had become a reality. Domestic milk powder
production increased from 22,000 tons in the pre-project year to 140,000 tons by 1989, all of the
increase coming from dairies set up under Operation Flood. In this way EEC gifts and World Bank loan
helped to promote self-reliance. Direct marketing of milk by producers' cooperatives increased by
several million liters a day.
Phase III Phase III (1985-1996) enabled dairy cooperatives to expand and strengthen the infrastructure required
to procure and market increasing volumes of milk. Veterinary first-aid health care services, feed and
artificial insemination services for cooperative members were extended, along with intensified
member education.
Project Submitted By: Vikash Kr. Singh
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Operation Flood's Phase III consolidated India's dairy cooperative movement, adding 30,000
new dairy cooperatives to the 42,000 existing societies organized during Phase II. Milk sheds
peaked to 173 in 1988-89 with the numbers of women members and Woman’s Dairy
Cooperative Societies increasing significantly.
Phase III gave increased emphasis to research and development in animal health and animal
nutrition. Innovations like vaccine for Theileriosis, bypass protein feed and urea-molasses
mineral blocks, all contributed to the enhanced productivity of milk animals.
From the outset, Operation Flood was conceived and implemented as much more than a dairy
programmed. Rather, dairying was seen as an instrument of development, generating
employment and regular incomes for millions of rural people. "Operation Flood can be
viewed, as a twenty year experiment confirming, the Rural Development Vision" (World Bank
Report 1997c.)
Project Submitted By: Vikash Kr. Singh
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Cooperative Unions
Over almost half a century ago, the life of a farmer in Kaira District was very much like that of
his counterpart anywhere else in India. His income was derived almost entirely from seasonal
crops. The income from selling milk was undependable. The marketing and distribution system
for the milk was controlled by private traders and middlemen. As milk is perishable, farmers
were compelled to sell it for whatever they were offered. Often, they had to sell cream and
ghee at throwaway prices. In this situation, the one who gained was the private trader.
Gradually, the realization dawned on the farmers that the exploitation by the trader could be
checked only if they market their milk themselves. In order to do that they needed to form
some sort of an organization. This realization is what led to the establishment of the Kaira
District Cooperative Milk Producers' Union Limited (popularly known as Amul) which was
formally registered on December 14, 1946.
Backward integration of the process led the cooperatives to advances in animal husbandry and
veterinary practice.
o
o
o
o
o
More than 900 village cooperatives have created jobs for people in their own villages
and that too without disturbing the socio-agro-system and thereby the exodus from the
rural areas has been arrested to a great extent.
The yearly elections of the management committee and its chairman, by the members,
are making the participants aware of their rights and educating them about the
democratic process.
Perpetuating the voluntary mix of the various ethnic and social groups twice-a-day for
common causes and mutual betterment has resulted in eroding many social
inequalities. The rich and the poor, the elite and the ordinary come together to
cooperate for a common cause.
Live exposure to various modern technologies and their application in day-to-day life
has not only made them aware of these developments but also made it easier for them
to adopt these very processes for their own betterment. One might wonder whether
the farmer who knows almost everything about impregnating a cow or buffalo, is also
equally aware of the process in the humans and works towards planning it.
The income from milk has contributed to their household economy. Besides, women,
who are the major participants, now have a say in the home economy.
This income is helping these people not only to liberate themselves from the stronghold of
poverty but also to elevate their social status.
The system succeeded mainly because it provides an assured market at remunerative prices for
producers' milk besides acting as a channel to market the production enhancement package.
What's more, it does not disturb the agro-system of the farmers. It also enables the consumer
Project Submitted By: Vikash Kr. Singh
Page 16
an access to high quality milk and milk products. Contrary to the traditional system, when the
profit of the business was cornered by the middlemen, the system ensured that the profit goes
to the participants for their socio-economic up liftment and common good.
o Produce an appropriate blend of the policy maker’s farmer’s board of management
and the professionals: each group appreciating its roles and limitations.
o Bring at the command of the rural milk producers the best of the technology and
harness its fruit for betterment.
o Provide a support system to the milk producers without disturbing their agroeconomic systems.
o Plough back the profits, by prudent use of men, material and machines, in the rural
sector for the common good and betterment of the member producers.
o Even though, growing with time and on scale, it has remained with the smallest
producer members. In that sense, Cooperative Movement is an example par
excellence, of an intervention for rural change.
Recently the Indian cooperative movement got a much needed facelift. With competition
snapping at its heels, the sector which has been governed by arcane laws until the recent past
will see a special provision inserted in the Companies Act, 1956. All the cooperative unions will
be re-christened cooperative companies; they will come under the purview of the registrar of
companies, instead of the registrar of cooperatives.
While they will have to adhere by the audit procedures like any corporate, they will differ from
ordinary companies in many ways. Not everyone can join a cooperative. Only users can enroll
as members at a fixed membership fee. Quantum of business and not equity capital will see an
election to the board. And there will be flexibility to raise capital from members and outside.
Dairy Cooperatives account for the major share of processed liquid milk marketed in the
country. Milk is processed and marketed by 170 Milk Producers' Cooperative Unions, which
federate into 15 State Cooperative Milk Marketing Federations.
The Dairy Board's programmers’ and activities seek to strengthen the functioning of Dairy
Cooperatives, as producer-owned and controlled organizations. NDDB supports the
development of dairy cooperatives by providing them financial assistance and technical
expertise, ensuring a better future for India's farmers.
Over the years, brands created by cooperatives have become synonymous with quality and
value. Brands like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan). Nandini
(Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among those that have earned customer
confidence.
Some of the major Dairy Cooperative Federations include:
Project Submitted By: Vikash Kr. Singh
Page 17
Andhra Pradesh Dairy Development Cooperative Federation Ltd (APDDCF)
Bihar State Cooperative Milk Producers Federation Ltd (COMPFED)
Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF)
Haryana Dairy Development Cooperative Federation Ltd. (HDDCF)
Himachal Pradesh State Cooperative Milk Producers Federation Ltd (HPSCMPF)
Karnataka Cooperative Milk Producers Federation Ltd (KMF)
Kerala State Cooperative Milk Marketing Federation Ltd (KCMMF)
Madhya Pradesh State Cooperative Dairy Federation Ltd (MPCDF)
Maharashtra Rajya Sahakari Maryadit Dugdh Mahasangh (Mahasangh)
Orissa State Cooperative Milk Producers Federation Ltd (OMFED)
Pradeshik Cooperative Dairy Federation Ltd (UP) (PCDF)
Punjab State Cooperative Milk Producers Federation Ltd (MILKFED)
Rajasthan Cooperative Dairy Federation Ltd (RCDF)
Tamilnadu Cooperative Milk Producers Federation Ltd (TCMPF)
West Bengal Cooperative Milk Producers Federation Ltd. (WBCMPF)
The Dairy Cooperative Network:
o
o
o
o
includes 170 milk unions
operates in over 338 districts
covers nearly 1,08574 village level societies
is owned by nearly 12 million farmer members
Apart from making India self sufficient in milk, these dairy co-operatives have established our
country as the largest milk-producing nation in the world!
Project Submitted By: Vikash Kr. Singh
Page 18
National Dairy Development Board
The National Dairy Development Board was created to promote, finance and support producerowned and controlled organizations. NDDB's programmers’ and activities seek to strengthen
farmer cooperatives and support national policies that are favorable to the growth of such
institutions. Fundamental to NDDB's efforts are cooperative principles and the Anand Pattern
of Cooperation.
A commitment to help rural producers help themselves has guided the Dairy Board's work for
more than 30 years. This commitment has been rewarded with achievements made by
cooperative dairies in milk production, employment generation, and per capita availability of
milk, foreign exchange savings and increased farmer incomes.
The National Dairy Development Board (NDDB) has replaced exploitation with empowerment,
convention with modernity, stagnation with growth and transformed dairying into an
instrument for the development of Indian farmers.
The National Dairy Development Board was created in 1964 in response to the Prime Minister
Lal Bahadur Shastri's call to "transplant the spirit of Anand in many other places". He wanted
the Anand model of dairy development - with institutions owned by rural producers, which
were sensitive to their needs and responsive to their demands - replicated in other parts of the
country.
The Board's creation was routed in the conviction that our nation's socio-economic progress
lies largely on the development of rural India.
Thus NDDB's mandate is to promote, finance and support producer-owned and controlled
organizations. NDDB's programmers’ and activities seek to strengthen farmer cooperatives and
support national policies that are favorable to the growth of such institutions.
NDDB believes that the Rs 7,000-crore (Rs 70-billion) milk cooperative market is getting much
more competitive and wants to strengthen the position of cooperatives through a multipronged action plan with an outlay of Rs 800 crore (Rs 8-billion). This includes using MDFL to
enter into 51:49 joint venture companies with state cooperative federations to assist them with
marketing value added products and to help them in other ways to become self-reliant
enterprises.
Project Submitted By: Vikash Kr. Singh
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Mother Dairy India Limited
‘Mother Dairy’ is the largest liquid milk brand in Asia. It started its operations in 1974 under the
Operation Flood program of the National Dairy Development Board. Operation Flood is one of
the largest dairy development projects in the world. Mother Diary, Delhi is IS/ISO- 9002 & IS15000 (HACCP) certified organization.
‘Mother Dairy’ is the single largest brand of milk in Delhi, India as well as in Asia, marketing
about 1.9 million liters of milk per day. Mother Dairy commands 40% market share in the
organized sector in and around Delhi, primarily because of consistent quality and service
reliability.
‘Mother Dairy’, which markets over 15 lakh LPD of milk procured from various State
federations in Delhi, has now entered the Mumbai market.
In addition to toned milk through Bulk vending, Mother Dairy also markets full cream milk,
standardized milk, toned milk, double toned milk and Skimmed milk (liter) in poly packs.
Mother Dairy, Delhi is an IS/ISO-9001:2000 and Hazard Analysis Critical Control Points (HACCP)
and IS-14001:1996 Environment Management System (EMS) Certified organization.
Mother Dairy was the first industry in country to implement ISO-14031(Environment
Performance Evaluation) project.
This provides assurance to the consumer in respect of Quality and Safety of products
manufactured and marketed by Mother Dairy.
The National Dairy Development Board (NDDB) commissioned Mother Dairy in the first phase
of Operation Flood in 1974. Considering the success of Dairy industry NDDB established Fruit &
Vegetable Project in Delhi in 1988 with "SAFAL" as its umbrella brand. With a view to separating
the commercial activities from developmental activities, the NDDB merged Mother Dairy and
the Fruit & Vegetable project into a wholly owned company named Mother Dairy Fruit
&Vegetable Ltd (MDFVL) in April 2000. This becomes the holding company of Mother Dairy
India Ltd (MDIL)- a marketing company and Mother Dairy Foods Processing Ltd (MDFPL)- a
processing company.
The company is a highly trusted household name for its wide range of milk products like Milk,
Flavored Milk, Ice-Cream, Dahi, Lassi, Table Butter, Dairy Whitener, Ghee etc.
Mother Dairy sources its entire requirement of liquid milk from dairy cooperatives.
Project Submitted By: Vikash Kr. Singh
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The objective of Mother Dairy is to:
(a) ensure that milk producers and farmers regularly and continually receive market prices by
offering quality milk, milk products and other food products to consumers at competitive prices
and;
(b) Uphold institutional structures that empower milk producers and farmers through processes
that are equitable.
At Mother Dairy, processing of milk is controlled by process automation whereby state-of-theart microprocessor technology is adopted to integrate and completely automate all functions of
the milk processing areas to ensure high product quality/ reliability and safety.
In addition to its market leadership in India, Mother Dairy is also active in the global arena,
exporting its range of dairy products to various international markets.
Process of Procurement & Distribution of Milk:
Farmers and the Milk Co-operative Society
The Operation Flood program helps both farmers as well as the city consumers. The program
ensures that the farmers get a fair price for their cow & buffalo milk and the consumers get
best quality milk at reasonable prices.
In order to maintain freshness, this milk is chilled and then transported to Mother Diary in
insulated milk tankers by road and by rail.
Checking the quality of milk
At the Dairy stringent hygienic standards are maintained. The milk in the tankers is first checked
for quality and freshness and then unloaded into huge insulated stainless steel storage tanks.
These tanks have a capacity of 1 lakh liters each. The presence of adulterants (impurities) like
urea, neutralizers, preservatives and germs like bacteria are checked. All these tests ensure that
only good quality milk is accepted. Once empty, the tankers are thoroughly cleaned and
sanitized using acid and alkali. The tankers are then finally rinsed with water.
Project Submitted By: Vikash Kr. Singh
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Processing of milk
Unprocessed milk may contain small dirt particles invisible to the naked eye. In order to remove
these particles the milk has to be processed.
To process milk at Mother Dairy, the milk is first clarified. This is done in a clarifier which spins
the milk at a very high speed, as a result of which the dirt particles are thrown out and drained.
The milk is then pasteurized to make it safe for human consumption. This process destroys any
disease causing bacteria and also increases the shelf life of the milk. During pasteurization the
milk is heated to 72 degree Celsius for 15 seconds and then rapidly cooled down to 7 degree
Celsius. This process, unlike boiling, does not affect the nutritional value of the milk.
Pasteurized milk is safe to drink without boiling as long as it is kept cool at all times.
Fortification with Vitamin A
Toned milk during processing is fortified with Vitamin A. The deficiency of Vitamin A can lead to
night blindness and skin horning.
Homogenization
At Mother Dairy the milk is also homogenized. This ensures that the customers get uniform
amount of cream in their milk.
In this process the milk is pumped at a very high pressure turning the cream into tiny droplets
thus distributing the fat through out the milk. These droplets do not float to the surface to form
a creamy layer. That is why no creamy layer appears when Mother Dairy milk is boiled at home.
Mother Dairy shops sell homogenized toned milk which contains minimum 3% fat even though
you cannot notice it.
Dispatching of milk
After processing, the milk is chilled and stored in silos and further chilled to about 2 C. by the
glycol chilling system, and then dispatched to the Milk Shops in insulated road milk tankers.
Prior to the milk being dispatched in tankers, it is tested for quality to make sure that it meets
the quality standards. When the tanker arrives at the shop the milk is transferred into a large
refrigerated tank.
Project Submitted By: Vikash Kr. Singh
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Making the milk available
The control room is very vital to the efficient distribution of milk to the 900 shops across the
city. It organizes the tanker routes and its staff is responsible for ensuring that shops do not run
out of milk. Each milk tanker is fitted with a wireless set. As soon as the in charge at the control
room learns that a particular shop is running out of milk, he contacts the tanker nearest to the
shop on the wireless which then delivers the extra milk to it
Quality control all the way
A final quality check of the mill is also made at the shop itself. This ensures that milk reaching
the customers is of same quality as dispatched from the Dairy.
Consumer Information
To raise the consumers awareness regarding Adulteration of milk, Mother Dairy has thrown
open its testing facilities. In its laboratories consumers can see for themselves how impurities
and adulterants are easily detected. Mother Dairy also has two "mobile labs" that can test milk
in the residential colonies. All this is part of a commitment to provide the consumers with the
purest milk nature has to offer.
Keeping milk cool
Mother Dairy takes care to keep milk cool at every stage-it is chilled before transporting in
insulated tankers; it is stored in insulated silos and kept in refrigerated tanks at the shops.
Keeping milk cool slows down the rate at which bacteria multiply. This also increases its shelf
life.
Caring for the environment
Solar Panels: In an effort to conserve fuel, Mother Dairy utilizes the abundant solar energy to
preheat the water going into the boilers. This also minimizes the pollution caused by burning of
fuels like coal, oil etc.
Project Submitted By: Vikash Kr. Singh
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Effluent treatment plant
The water used for cleaning equipment and tankers is treated at the effluent treatment plant in
the Dairy before being discharged into the sewage system.
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Other Major Players
AMUL
Amul is the latest entrant in the highly competitive milk market of NCR where Mother Dairy had
an almost monopoly. Amul is the brand owned by GCMMF is handling almost 80 lakh liters’ of
milk daily.
PARAS Dairy
It sells 3 lakh LPD
DMS
GOPALJEE
PARAM
COMPARITIVE ANALYSIS OF MAJOR MILK BRANDS
MILK BRANDS
Mother
Dairy
Amul
Delhi Milk Scheme
Gopaljee
Paras
Full Cream
19
19
19
19
19
15
15
15
15
15
13
NA
NA
NA
NA
17
NA
NA
NA
NA
11
NA
NA
NA
NA
Toned
Double Toned
Standard
Skimmed
Project Submitted By: Vikash Kr. Singh
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Delhi’s (NCR) Milk Market
Delhi National Capital Region (NCR), among the biggest milk markets in the country, is
dominated by Mother Dairy currently.
The Delhi market comprises 40 lakh liters’ currently and is dominated by NDDB owned Mother
Dairy, which sells 10 lakh LPD. The other organized sector players are Paras Dairy, which sells 3
lakh LPD, state-owned Delhi Milk Scheme (2.5 lakh LPD), Gopaljee (1-1.5 lakh LPD) and Britannia
30-40,000 LPD.
Amul and NDDB's non-compete agreement has prevented the former from launching its liquid
milk in the Delhi market till 2003.With the non-compete agreement having run out, Amul
launched its fresh milk in Delhi in two variants — full cream and toned — priced at par with
that of Mother Dairy .Amul, to its delight, has seen the demand for its milk going up by leaps
and bounds in the city and is now planning to enter into alliances with dairies located around
Delhi such as Indian Potash and Modern Dairy to cater to the demand.
Amul already has a lease agreement with Kwality Dairy's unit in Faridabad where it is planning
to increase capacity and has also decided to set up a new 5-lakh litre per day dairy plant at an
investment of Rs 40 crore in Haryana to cater to the northern market.
GCMMF officials say the company's milk capacity has already touched 80,000 liters’ per day
(LPD) and have plans to take it to 3 LPD. Amul is now selling through 2,500 retail outlets and will
increase this to 7,500 apart from covering outlets which are selling Amul butter.
Another player gearing up to unseat Mother Dairy from the leadership throne is the Rs 400crore Paras group. The company has hit upon an innovative strategy of introducing milk
vending machines which dispense token milk at Rs 13 per liters. Paras says this strategy targets
the unbranded milk segment which accounts for 45 per cent of the total milk consumed in Delhi
NCR.
The company plans to put up Paras Milk Point (PMP) machines at various fast-moving consumer
goods outlets all over the capital. Over 50 machines — each costing over Rs 2 lakh — will be
installed in phases over the next four months to cater to toned milk users.
The PMP machines carry about 250 liters of milk and have an in-built refrigerator. Paras brand
currently reaches 9,000 outlets in and around Delhi, and the group is looking at penetrating
fresh markets in the northern region. Paras' total processing capacity of its three units, one at
Haryana and two at Sahibabad in Uttar Pradesh, is 14 lakh LPD.
Project Submitted By: Vikash Kr. Singh
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Objectives of Research
o
o
o
o
Assessing the milk market of Mother dairy, Patpargang
Assessing Mother Dairy’s position in the territory vis-à-vis other brands.
Assessing the reasons of low sales volume of Mother Dairy’s milk in WT-5.
Suggesting remedial course of action for Mother Dairy India Ltd.
Project Submitted By: Vikash Kr. Singh
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SWOT Analysis of Mother Dairy
STRENGTHS
o The major strength of the
Mother Dairy is the different
variety of Milks and a recognized
BRAND name.
o The increasing demand for these
products presents a great
opportunity for the Mother Diary
to increase and scale up the
production.
OPPORTUNITIES
o There is a scope of business as
there is a demand for dairy
products.
o Mother Dairy should open more
outlets to get the maximum
advantage of the demand.
o Need to put more stress in the
face-to-face direct marketing to
reach to the customers.
o The increasing demand for these
products presents a great
opportunity for the Mother Diary
to increase and scale up the
production.
Project Submitted By: Vikash Kr. Singh
WEAKNESS
o Scarce Mother Dairy Outlets.
o Fewer Margins given to the Outlet
owners to match the existing
competitors.
THREATS
o Increasing competition from the
other brands.
o Strong supply chain management
by the competitors.
o Strong marketing strategy by
competitors by offering the
discount coupons to consumers and
providing healthy commissions to
the retailers.
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Recommendations
HOUSEHOLDS:
Areas of Narayana Vihar and Patel Nagar
o People have a high consideration for QUALITY and they think MD Milk is low in quality
and is also yellowish in colour.
Recommendation:
o Company should try to conduct camps and awareness programs in these areas to
overcome this thinking of people.
Areas of Karol Bagh and Regar Pura
o People in these areas have PRICE as the most important factor which effects their
decision to consume.
Recommendation
o If the company can achieve, its target in this area, by keeping low margin and by
reducing the price then the sales in this area can improve drastically because in this area
the income level of households is not very high.
Areas of Anand Parvat and Baljit Nagar
o This area being a HILLY Area is the most challenging job for any company to serve.
People want MD Milk here but there are no booths in this area.
Recommendation
o If the company can open its Booth in this area it can be the leader as no other company
has its booth in this area except GOPALJEE. The sales can improve to a very big extent
from this area alone since there is demand but no availability.
Project Submitted By: Vikash Kr. Singh
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o MOTHER DAIRY should also launch certain schemes for Households. It has schemes for
Retailers but not for households. This section being the major user of milk and in order
to enter into a new area such starting schemes can be very helpful.
o Demand and Visibility go hand in hand. If MD can do certain promotions as its
competitor AMUL does, then it can attract sales. Promotions, with the help of boards
and hoardings.
o Lastly incase of Households the company should maintain a proper communication with
the Localities or Areas facing problem.
RETAILERS AND MD RETAILERS
o The major problem faced by Retailers and MD Retailers is the SUPPLY problem i.e.
problem with the distribution. The company should aim at improving its SUPPY CHAIN
MANAGEMENT.
o The company should increase incentives that can increase Retailers Nominal Income.
This can be done through certain Schemes that increase the overall sales.
o The company should lay emphasis on proper PROMOTION of the brand at the Retail
Outlet.
o The company should get a proper FEEDBACK from Retailers time to time. Incase they are
facing any problem it can be solved timely, without delays.
o There is a problem of DATE also being faced by Retailers. The date printed is one day
previous. If retailers get the same day’s milk in the evening (which is not so), the
Retailers can sell some of the same day’s milk in the evening itself and the remaining
would be happily acceptable by people in the Morning, next day.
Project Submitted By: Vikash Kr. Singh
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