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  • You know who's got milk?

  • India. India is the world's biggest producer and consumer of dairy.

  • In 2018 alone, India produced 186 million metric tonnes of milkabout

  • 410 billion pounds and 22 percent of the milk produced globally.

  • Almost all of that is consumed domestically thanks to India's dairy-heavy

  • dietthink creamy curries, yogurt drinks, and a popular type of butter

  • called ghee.

  • A quick note before we proceed: this includes milk from buffaloes, which

  • are an important source of milk in many developing countries.

  • the point is that India loves milk.

  • In 2011, the French dairy company Danone hoped to capitalize on this by

  • opening a division in India.

  • Danone opened its own processing plant in Haryana and tried to capture

  • some of India's 1.2

  • billion dairy lovers.

  • But less than a decade later, Danone shuttered their dairy business in

  • India. That same year, the company made 28 billion dollars worldwide and

  • was in the top three global dairy companies.

  • With all this success, elsewhere, why did Danone's dairy business sour in

  • India?

  • Let's start with some background on Danone.

  • Their business is broken down into three categories: specialized

  • nutrition, like supplements and formula for babies; bottled waters and

  • seltzers; and dairy and plant-based alternatives.

  • That one makes up over half of their global sales, but it's also the one

  • that failed in India.

  • Danone does still sell specialized nutrition products in the country, but

  • they don't break out those sales figures separately.

  • Oh, and yesthis is the same company as Dannon in the U.S.

  • The company decided to rebrand to make the spelling less confusing for

  • American consumers.

  • Anyway, now for some background on India's dairy industry.

  • There are about 75 million dairy farmers in India.

  • Most of them are women who own one or two buffaloes or cows to supplement

  • the family's income.

  • Nearly half of India's milk is not sold, but consumed by the farmers

  • household. This makes India's dairy industry far more fractured and

  • localized than other countries where Danone operates.

  • Take the company's native France and one of its biggest customers, the

  • U.S. Each has far fewer dairy farms with herds that dwarf India's one or

  • two animal average.

  • This was Danone's first big problem in India: sourcing milk is difficult.

  • Of the half not consumed by farmers' households, only about 15 percent

  • goes to big organized companies or government run cooperatives.

  • The rest goes to hundreds of small, local milk processors.

  • Even the largest companies like Amul, Mother Dairy, and Nestlé have tiny

  • percentages of the market, and they've been there for decades.

  • Market research firms Mintel and Euromonitor declined to release specific

  • market share numbers to CNBC.

  • However, a 2016 piece in The Economic Times of India citing Euromonitor

  • put the figures at about 7 percent for Amul, 3.7

  • percent for Mother Dairy, and 2.9

  • percent for Nestlé.

  • In short, tapping into the existing dairy infrastructure is effective but

  • time consuming.

  • Imagine the effort of contacting dozens or hundreds of local and regional

  • dairies, processors, or individual farmers.

  • But establishing a separate supply chain altogether is very expensive

  • a lesson Danone learned the hard way.

  • And when Danone did get milk, the company focused on the wrong products.

  • Danone pushed plain yogurt and flavored yogurt drinkspopular in places

  • like the U.S.

  • and France with high profit margins to boot.

  • But in India around the time when Danone arrived, yogurt comprised only 7

  • percent of the dairy consumed.

  • The real money was in ghee, a type of clarified butter, and plain old

  • fluid milk, a product with razor-thin margins dominated by those hundreds

  • of local small-scale producers.

  • Analysts explained to CNBC the simple reason why Indian consumers shunned

  • Danone's prepackaged yogurt.

  • And if Indian consumers did want to buy premade yogurt, they had a slew of

  • cheaper options than Danone.

  • Dairy never accounted for more than 10 percent of Danone's sales in India,

  • a far cry from its global 50 percent.

  • Its specialized nutrition arm picks up the slack, and the company

  • announced a renewed focus on that division when it shuttered its dairy

  • operation. Meanwhile, two of their biggest competitors, Amul and Nestlé,

  • made nearly five billion and 750 million from dairy, respectively.

  • But not all hope is lost for Danone's dairy in India.

  • In January 2018, the same time that Danone ended its dairy production

  • there, the investment arm of the company announced its part in a 26.5

  • million dollar investment in Epigamia, an Indian yogurt startup.

  • This could be a sustainable move for Danone in India's dairy industry

  • because Epigamia offers consumers products that add value onto the plain

  • yogurt they can make cheaply at home.

  • But perhaps most importantly is this: while much of the population still

  • makes yogurt the old-fashioned way, analysts predict that a growing number

  • of consumers will want to buy premade options as they move into corporate

  • jobs in developing urban centers.

  • Very

  • large numbers indeed.

  • If only 5 percent of India's 1.35

  • billion people decides to buy prepackaged yogurt, that's over 67 million

  • consumersmore than the entire population of Danone's native France.

You know who's got milk?

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大型乳品公司为何在印度苦苦挣扎(Why Big Dairy Companies Struggle In India)

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    joey joey 發佈於 2021 年 04 月 21 日
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