1 week ago
India’s Dairy Firms Pursue Higher Returns Through Value-Added Products
Dairy companies in India usually sell a lot of ordinary liquid milk.
Ordinary milk is difficult to make very profitable because prices are competitive.
Companies are now turning milk into products such as cheese, paneer, yoghurt, ice cream and protein drinks.
These products can sell for more money and last longer.
They may also help companies manage times when too much milk is available.
Better cold storage, packaging and online delivery are helping these products reach more customers.
However, making them requires good-quality milk, advanced factories and reliable refrigeration.
Some customers may also find the products too expensive.
Indian dairy companies are expanding beyond liquid milk into cheese, paneer, yoghurt, ghee, ice cream and protein products.
Value-added products can generate higher prices, longer shelf lives and protection from seasonal milk gluts.
Milky Mist reported FY26 revenue of Rs 3,138 crore and net profit of Rs 127.01 crore.
Parag Milk Foods plans to double cheese-making capacity to 120 tonnes a day by FY28.
Cold-chain improvements, premiumisation and quick-commerce are supporting growth, but affordability and processing requirements remain challenges.
- Who
- Indian dairy companies, including Milky Mist Dairy Food, Parag Milk Foods, Heritage Foods and Mother Dairy.
- What
- They are expanding value-added dairy products to improve margins and extract more value from each litre of milk.
- Where
- India.
- When
- The shift is occurring as the industry reports current growth; cited company plans extend through FY28.
- Why
- Value-added products offer higher realisation, stronger differentiation and longer shelf lives, while health awareness, urbanisation and convenience demand support consumption.
Value-Added Expansion
Core-Milk and Affordability Concerns
Profitability Strategy
Value-Added Expansion
Companies can earn more by processing milk into cheese, paneer, whey, protein products and other differentiated categories.
Core-Milk and Affordability Concerns
Liquid milk remains important for procurement, consumer reach and distribution, while fresh products still account for most organised consumption.
Market Growth
Value-Added Expansion
Health awareness, premiumisation, urbanisation and online commerce are increasing demand for specialised and branded dairy products.
Core-Milk and Affordability Concerns
India remains price-sensitive, and higher-priced products may face affordability limits.
Operational Requirements
Value-Added Expansion
Modern processing, UHT treatment, aseptic packaging and cold chains can extend shelf life and expand geographic reach.
Core-Milk and Affordability Concerns
Protein-led and specialised products require consistent milk quality, sophisticated processing and reliable cold-chain infrastructure.
Key facts
- Milky Mist FY26 revenue
- Rs 3,138 crore, up 34% year over year.
- Milky Mist FY26 net profit
- Rs 127.01 crore, up 175.7% year over year.
- Milky Mist IPO
- The Rs 1,553-crore initial public offering listed at an 18% premium.
- Parag cheese capacity
- The company plans to double capacity to 120 tonnes a day by FY28.
- Value-added margins
- Cheese and whey can generate margins of around 25% to 45%, according to Parag Milk Foods executive Akshali Shah.
- Protein derivatives
- Converting milk into protein derivatives can deliver roughly 1.5 to 3 times higher value, according to Akshali Shah.
- Mother Dairy premium ice cream
- Premium offerings contribute around 10% of the company’s ice-cream business.
Quotes
Jayatheertha Chary
Managing director of Mother Dairy
“The shift towards protein-rich, value-added products improves profitability by enabling higher value realisation per litre of milk. Product differentiation is also stronger”
financialexpress.com
“Premiumisation in dairy is increasingly about creating greater value for consumers through differentiated products, experiences and occasions”
financialexpress.com
Sources
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