• India has the largest milk and milk products market in the world.

• State co-operatives & privately owned Indian companies dominate the liquid milk sector

• India has around 70,000 village dairy co-operatives, 22 co-operative dairy federations at state level & 170 milk producer unions at district level

• Infant Milk Food, Milk Powder, Whitener, Condensed Milk, Malted Milk Food, Butter, Cheese, Ice Cream and Ghee are the major value added products from the Indian dairy sector

Milk & Dairy Products : Industry Structure In India

GROWTH RATE

ProductProjected Growth Rate

Per cent per annum

Milk production 3

Ghee consumption 9

Table Butter consumption 10

Paneer (cottage cheese) 10

Processed cheese 14

Dairy whiteners and condensed milk 8

Market Environment

• India has the largest milk and milk products market in the world.

• If the growth of this sector is extrapolated, it is observed that in the next ten years production will increase to about three times today’s numbers.

Growing Industry

• Due to increasing population, per capita availability of milk will increase by only about 1.5 per cent per annum.

• For an economy growing at about 6 per cent per annum, this increase in availability will be grossly inadequate.

• Production growing at only 3 per cent and consumption growing at more than double the rate is obviously going to lead to a mismatch between demand and supply..

Amul India and Nestle India has been the TWO major players in the milk products industry

since a very long time

COMPANY OVERVIEW

• Nestle India Limited; a subsidiary of Nestle; was founded by Henri Nestle in Switzerland in the year 1867. The company was established in India in 1961.

• The first production unit was launched in Punjab

• Nestle developed a milk economy in Punjab (per the request of Punjab government )

• Amul was set up in 1945 as Gujarat Cooperative Milk Marketing Federation (GCMMF).

• It is a state level apex body of milk cooperatives in Gujarat that helps farmer get good remuneration on his produce.

• Milk economy was set up in Gujarat by Amul

Company overview

• Amul has a more Indian appeal than brand.

• Its turnover was 67.11 billion Indian Rupees in 2008-09.

• It has over 50 products on the Indian market.

• Nestle has its identity has a International Brand

• In 2009 Nestle recorded a net profit of CHF 10.43 billion, 16% of which was from Asia

• It has a total of six thousand brands.

MILK PRODUCTS AND NUTRITION

PREPARED DISHES AND COOKING AIDS

BEVERAGESCHOCOLATES AND CONFECTIONARY

Market Position • In butter, cheese and saturated fats, Amul has

remained the undisputed market leader in India since its inception in 1955.

• Today the market share of Amul ice cream is 38% share against the 9% market share of HLL, thus making it 4 times larger than its closest competitor.

• Nestle markets its products in130 countries across the world.

• Nestlé has 80% market share in the baby cereal segment ( Infant food)and is clearly a market leader.

• Nestlé is the Indian market leader in instant coffee , with 55% market share and NI has about 80% market share in the instant noodle segment.

• NESTLE brand has had a great distribution.• Nestle to start with launched its Nestle Milkmaid

and Nestle Everyday range. The Everyday milk powder which is popular even now among people all over India especially in rural India.

• Then Maggi Noodle was launched• Another most popular brand they have is range

of beverages ( Nescafe classic , sunrise)• The other range is chocolates and confectioner

• Solely on the basis of the quality products and not a very “Indian” image of the brands, they have surely endured and have been quite popular.

• Nestle has great marketing strategies that maintains good distribution reaching out to the mass. However the number and variety of products and category ranges are limited here.

• Amul launched its butter way back in 1945• Amul first became famous for its butter

among the mass and slowly began to expand itself in other milk products category. It has now about 8 different categories

• Bread Spreads, Milk Drinks, Powder Milk, Fresh Milk, Cheese, For Cooking, Desserts, Health Drink

• This organization has a very Indian feel to it and this is more emphasized by its positioning as “the taste of India” as well as its Indian products range like Malai paneer, Amul Lassee, Shrikhand and many more.

• Amul also bags the image as “savior of farmers”, “a milk revolution” and this got only more popularity with a movie made on the organization

Expansion

• Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1050 million (06–07) .

• Besides India Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries.

• Future plans to enter Japan and Sri-Lanka Market

Expansion

• Milk products and nutrition account for around 45per cent of Nestlé India’s total revenues.

• hence now company has expanded their product line to attract Indian market more extensively by adding in their portfolio yoghurt segment consists of Fresh ’n Natural Dahi, Slim Dahi, Jeera Raita and fruit-flavoured yoghurts.

• Tied up with Andhra Pradesh-based Heritage Foods India Ltd in the South, Bengal Nester in the East and Dynamix Dairy Industries Ltd in the West not only for sourcing milk but also processing, packaging and supplying

Market Responsiveness

• Amul has responded very quickly to the various niches in the market locally as well as internationally by launching products like Amul Kool (targeting the youth) and Amul Masti (Buttermilk educating youth against carbonated drinks).

• Nestle is slowly traversing this path by launching Nestle Jeera Raitha

Market Responsiveness• Amul is slowly transforming from the very

“cute” image to the “yo” and “yippie” image reaching out to the young crowd stirring them up with their confectionery range.

• Nestle has reached out to the masses by quietly maintaining its international image but with a great taste and quality. It has some of the most popular brands (Maggi Noodles) for long which does not had any challengers.

Marketing Strategy

• Amul has this “desi brand” image with extensive marketing activities like– sponsoring various programs– hosting many competitions ( TV reality shows such as

Voice of India, Master Chef)– own exclusive parlors.– Advertising in simple – Advertisement in akashavani to reach more people in

rural India– Introduction of IT in milk collection, processing and

distribution area from rural level itself.

Marketing strategy• Nestlé supports initiatives to create awareness

about the right to education • Company veterinarians and agronomists

supervise the milk routes and advise farmers on various issues including proper feed for the herds. Milk storage facilities have been set up close to the farmers. Veterinary services are provided free, and medicines provided at wholesale cost

• Nestlé India supports local schools, helps in the maintenance of public parks and green belts, facilitates blood donation camps and health awareness programs

Sales Turnover

• sales of our Federation registered a quantum growth of 19.3% to reach Rs. 8005.36 crores (Rs. 80 billion).

• The Company has posted a net profit of Rs 2185.60 million for the quarter ended September 30, 2010 nestle.

Awards

• Nestle India was recognized with the top Exporter Award for export of Instant Coffee, and for export of all coffees to Russia and CIS Countries.

• Amul has won various national awards which includes the Rajiv Gandhi National Quality Award and the Ramakrishna National Quality Award.

Market Competitors

• Mother Dairy , National Dairy Development Board (NDDB)

• Cadbury • Local Brands : regional wise Nandini (K), Vijaya

(AP), Aravind(TN)• HLL (Kwality Walls)

SWOT ANALYSIS

SWOT ANALYSIS OF INDIAN DAIRY INDUSTRY

STRENGHTS•Demand •Margins•Flexibility of product mix: •Availability of raw material: •Technical manpower:

WEAKNESS•Perishability•Lack of control over yield: • Logistics of procurement: •Problematic distribution: • Competition:

OPPORTUNITIES•Value addition•New products•utilization of resources •geriatric foods and nutritionals.( milk proteins)•Export potential

THREATS •un-organized sector

SWOT ANALYSIS OF AMUL

STRENGHTS •Has a National image•Variety of products to cater to all customer groups•Brand image•Affordable price•Effective ad campaign

WEAKNESS•Not focused on other food product lines• Inadequate transportation•Problems in distribution

OPPORTUNITIES•Export potential•Entry in retailing•Packaged sweets, sports drink new market

THREATS•Increasing requirements•Adulteration•Competition •No supporting units

STRENGHTS•International Company•Strong brands (market leader)•Expanded product line•Wide distribution network•Quality maintenance•R&D support

WEAKNESS•Complex supply chain management•Lacking in promotion•Prices are high•Less consumer research

OPPORTUNITIES•Expansion: Potential to expand smaller towns ( rural market)•Global hub •Product offerings

THREATS•Immense competition from the organized as well as the unorganized sector•Changing consumer trends•Increasing prices of raw material

SWOT ANALYSIS OF NESTLE