Demand Planning at Coca-Cola

The sign in the elevator banks at Coca-Cola Refreshments reads:

"There is a person at the end of our supply chain." Well, that's a
start.
If only it were that simple to sell 1.7 billion servings of sugared water a day.
But, like just about every big corporation with a complex, global supply
chain, Coca-Cola battles constantly to align its various disciplines and their
diverging priorities.
"Plants want to run as much as possible. Sales wants to sell more. Marketing
assumes huge successes. Logistics and procurement are on their own.
Finance is saying no to everything," said Rob Haddock, group director of
planning with Coca-Cola Refreshments (CCR). Sound familiar?
To be sure, The Coca-Cola Company has sought to streamline and simplify a
supply chain that historically was fragmented by its very nature, with
production and bottling carried out by separate entities. CCR was formed in
2010, when Coca-Cola acquired the North American business of Coca-Cola
Enterprises, its largest bottler. The sales and operations side was branded as
CCR, which also took in the majority of The Coca-Cola Company's U.S. and
Canadian businesses.
In the process, the company began paring back the number of bottling
operations, both owned and independent. The 353 ownerships that existed
at the time of CCRs formation have been gradually reduced to 100 plants
and 76 ownerships, Haddock told the San Francisco Roundtable of
the Council of Supply Chain Management Professionals, at a recent meeting
of the group in the Bay Area. (There were more than 1,000 bottling plants in
1960, Haddock noted. The formation of Coca-Cola Enterprises in 1982
marked the beginning of the company's efforts to get that number down.)
Today, the Coca-Cola production and distribution network consists of 742
facilities, and more than 650 distribution centers. The company is still
working to "clean up" the system so that individual units have more
contiguous territory, Haddock said.
Complicating matters is the huge number of products that are sold under the
banner of Coca-Cola and its subsidiaries. "Coke" itself comes in multiple
flavors, with and without caffeine and sugar. But the entire line comprises
some 3,500 products. And the company is hardly immune to the trend of
SKU proliferation. "It's been total chaos since the introduction of Diet Coke in
1989," Haddock joked. Or was it a joke?

It begins, of course, with planning, and that's where Haddock and its
colleagues come in. "My people are telling all the assets what to do when
to make it, how to move it, when to buy it," he said.
Their guiding principle is the need for integrating demand and supply, as
summed up by the acronym DOIP, for demand, operations and inventory
planning. Demand involves daily interaction with marketing and
sales. Operations focuses on the financial implications of optimizing
production and distribution. Inventory planning assesses the impact of
striking the right inventory levels. All three areas are synchronized through
the company's sales and operations planning (S&OP) effort, the forum for
making and sharing key decisions.
None of this had led to a completely reliable forecast, as even the most
successful demand planner will tell you. "World-class" accuracy these days is
around 70 percent, Haddock said, meaning the company has to absorb that
remaining 30 percent, usually by building inventory.
The actual number can be even worse than that. Take that 70-percent grade
for forecast accuracy. Now assume that production will meet requirements
around 85 percent of the time, and that customer-service levels will be in
the range of 95 percent. Put it all together and the accuracy rate is closer to
57 percent, Haddock said.
Companies fight constantly to push that number upward. Breaking down
corporate siloes, said Haddock, is a crucial first step.
When devising a forecast, its essential that everyone aligns to one number,
he said. Still, its not easy to extract the truth from a lot of people who
dont really want to divulge what the real plans are. The minute that sales
and marketing quotes a figure to senior leadership, that number gets
etched in stone somewhere up on the highest floor of the building. So dont
blame the sales and marketing person for not being specific.
Imperfect though it might be, the forecast has to be propagated both
upstream and down. Suppliers are waiting for a demand signal, which
controls master production scheduling. Then theres outbound
transportation, which operates on tight margins yet is in danger of
overspending its budget when it has to scramble to fill unanticipated
demand. Thats one of our big challenges right now, said Haddock. How
do I know that Ive got enough trucks, day in and day out?
Individual service-level agreements will have an impact on the forecast as
well. Then theres the issue of forecast bias, caused by a failure to adjust to

changing circumstances. Inventory, for example, might be positioned to

handle a one-week spike. But what if it regularly stretches to two? It could
be time for a rethinking of inventory strategy.
Good forecasting and demand planning is all about combining the notion of a
perfect order with the realities of the marketplace. Even the best plan is
probably outdated by the time its put into practice, Haddock said. If Ive
got 85 percent of the solution, Ill just go with it. Its never going to be 100
percent.
The acknowledgment that error is inevitable is no excuse for failing to
integrate the various disciplines within the organization. In addition, said
Haddock, all departments must be ready to tweak the plan in line with actual
events.
Were constantly readjusting our supply chain in response to changes in the
forecast and live orders, Haddock said.
The lesson for all manufacturers and distributors: Plan and replan. The
dynamics of the business change daily, Haddock added, and require subtle
course corrections.

Demand estimate of milk for institutional sales,

iN dharwar
1.

DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in

DharwarCOMPANY PROFILE:Kalpataru dairy has been started in the year
1998 and in the year 2004 it has beenpurchased by the young entrepreneur of
Dharwar, Mr. Vijay Mane. Now kalpataru dairyis running under the keen
observations of Mr. Vijay Mane. It is located nearkhalaghatagi city. It is
operating in Dharwar and Dharwar regions. It is also one oflargest milk
producers in the market. The company is very enthusiastic and
moreambitioned to cater and carve the new markets in the North Karnataka.
The company hasgood market share in the Dharwar and dharwar regions.
They are achieving highermarket share in that region by practicing good
marketing strategies.Kalpataru dairy has a good number of satisfied
customers in the market. The company isusing many new product
.

development strategies to satisfy the customers. Its one amongthe many

dairies which are producing good quality standard toned milk. It has
manyinstitutional and domestic customers for their milk. The company has
widened its marketshare about 5% this year. They are now looking for the
Belguam market as aninstitutional segment.

2. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar

INDIAN DAIRY INDUSTRY PROFILEINTRODUCTIONIndias high-value, highvolume market for traditional dairy products and delicacies is allset to boom
further under the technology of mass production. This market is the largestin
value after liquid milk and is estimated at US $3 billion in India.More and more
dairy plants in the public, cooperative and private sectors in India aregoing in
for the manufacture of traditional milk products. This trend will
undoubtedlygive a further stimulus to the milk consumption in the country and
ensure a better priceto primary milk producers. Simultaneously, it will also
help to productively utilizeIndias growing milk surplus.Milk production in India
increased from 17 million tons in 1950-51 to 89.6 million tonsin 2004-05. India
has rapidly positioned itself as the worlds largest producer of milk.Producing
milk in rural areas through smallholder producer cooperatives and
movingindustrially-processed milk from these smallholder sources to urban
demand centersbecame the cornerstone of government dairy development
policy. This policy initiative.

3. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in

Dharwargave a boost to dairy development and initiated the process of
establishing the much-needed linkages between rural producers and urban
consumers.The performance of the Indian dairy sector during the past three
decades has been trulyimpressive. Milk production grew at an average annual
rate of 4.6 percent during the1970s, 5.7 percent during the 1980s, and 4.2
percent during the 1990s.Despite its being the largest milk producer in the
world, Indias per capita availability ofmilk is one of the lowest in the world,
although it is high by developing countrystandards. The per capita availability
of milk expanded substantially during the 1980sand 1990s and reached about
226 grams per day in 2003-04 the per capita consumptionof milk and milk

products in India is among the highest in Asia, but it is still growing. Itis still
below the world average of 285 grams per day, and also the minimum
nutritionalrequirement of 280 grams per day as recommended by the Indian
Council of MedicalResearch (ICMR).Several factors have contributed to
increased milk production. First, milk and dairyproducts have cultural
significance in the Indian diet. A large portion of the population islactovegetarian, so milk and dairy products are an important source of protein in
thediet. The demand for milk and dairy products is income-responsive, and
growth in percapita income is expected to increase demand for milk and milk
products.Despite the fact that dairy production in India is widespread
throughout the country andoverwhelmingly carried out by small-scale
producers, there are still large interregionaland interstate variations in milk
production. Roughly two-thirds of national milk.

4. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in

Dharwarproduction comes from the states of Uttar Pradesh, Punjab,
Rajasthan, Madhya Pradesh,Maharashtra, Gujarat, Andhra Pradesh, and
Haryana. However, there have been someshifts in milk production shares of
different states. In 2001-02, Uttar Pradesh was thelargest milk producer in the
country, with about 16.5 million tons of milk, followed byPunjab (8.4 million
tons), Rajasthan (6.3 million tons), Madhya Pradesh (6.1 milliontons),
Maharashtra (6 million tons), and Gujarat (5.6 million tons). The eastern
region islagging behind in terms of dairy development, and imports milk from
surplus areas in theWest and North.INDIAN DAIRY INDUSTRY A
PROFILE The annual milk production is presently 92 million tonnes,
contributing around Rs.1000 billions to the GDP. Provides assured and
remunerative employment round-the-year to 60 millionsfamilies. The dairy
animals make a substantial contribution to household food security
byproviding income, quality food, energy, fertilizer and assets in over majority
of the ruralhouseholds in India. The Animal Husbandry is the single largest
contributor under the agriculture sectorwhich provides a remunerative
employment round the year at a very small investment.The dairy animals
make a substantial contribution to household food security.

5. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in

Dharwarproviding income, quality food, energy, fertilizer and assets in over
majority of the ruralhouseholds in India. These livestock keepers are
constrained by poor animal health and veterinaryservices, lack of feed and
fodder, water, milk handling, chilling, etc. Besides, there hasbeen lack of
infrastructure facilities such as good roads and access to markets, etc.
Thelivestock keepers also lack access to advanced technologies as well as
properinstitutional support system. The result is that both the production and
productivityremain well below its potentials. Thus the losses and wastages
continue to remain high.Adapted breeds and local feed resources although
available, but need proven technologysupports in its preservation and
processing. Such support would substantially improveproduction and
productivity, which would result in higher income for the livestockkeepers. One
of the problems faced by India is unemployment, despite the rapid growthrate.
The problem is more acute in rural educated and marginally educated youths,
whohave no alternative but to migrate to urban areas. Due to automation in
various coresectors, the employment opportunities have dwindled
considerably whereas the servicesector has its own limitations, especially the
high investment cost per job created. In thiscontext, the dairy industry offers a
plausible opportunity of creation of self-employmentwith minimum investment.
There is a scope for doubling the present milk production,which can be
achieved with marginal investment, such a step would not only enhancemilk
production and productivity, but also would create millions of additional jobs.

6. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar

Dairying is, in fact, a supplementary activity of the marginal farmers and
thelandless laborers. It is therefore suggested that dairy and such other
animal farming beincluded within the legal framework of agriculture and
agriculture products. Thiswould enable the marginal farmers and the landless
agriculture laborers to benefit fromthe various government incentives. Milk is
no more a luxury, but essential nutritional requirements of humanbeing. The
children largely depend on milk for nutrition. Higher milk productiontherefore
will also increase the health status of the farmers and people at large. Due
toseveral inherent reasons, the cost of milk production is high. One of the
importantreasons is low animal productivity. Because of high cost, the milk
and milk products arenot affordable to poor strata of the society. Milk is a

perishable commodity. Hence, itsconversion to products, such as, milk

powder, butter and cheese, etc. is necessary.Considering these factors, it is
reasonable that at par with agriculture produce, the milkproducts be also
exempted from any excise duty, sales tax and such other taxes. Thisgesture
of the government would go a long way in accelerating the growth of the
Indiandairy industry from present annual rate of around 4.5 % to more than
9%.The conversion of excess milk to milk-products is a necessity. The basic
principle here isevaporation of water which changes its physical form only,
whereas there is no changewhatsoever in its chemical composition. One of
the reasons of higher cost of milk andmilk products is the cost of packaging.
To safeguard the quality and safety for humanconsumption, packaging of milk
and milk product is necessary. The milk productmanufacturing therefore
should be construed as processing milk for preservation and it.

7. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarshould

be exempted from all the taxes and duties like excise, central sales tax and
octroietc.To enhance milk production during the next five years as well as to address
the issuesreferred in the foregoing sentences, there is an imperative need of policy
support fromthe government on the following core areas:- Clean and quality milk
production, processing and packaging- Boost the exports of milk and milk productsEnhance milk production and milch animal productivityIndian Dairy: the organized
sector is expanding DailyIndias modern dairy sector has expanded rapidly. From an
insignificant 200,000 litersper day (lpd) of milk being processed in 1951, the
organized sector is presently handlingsome 20 million lpd in over 400 dairy plants.
Already, one of the worlds largest liquidmilk plants is located in Delhi and handling
over 800,000 liters of milk per day (MotherDairy, Delhi). Indias first automated dairy
Mother Dairy has been established.
8. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in
DharwarGandhi agar near Ahmedabad, Gujarat, in Western India and its capacity
is capacity is 1million lpd. It is owned by Indias biggest dairy cooperative group,
in Anand, with anannual turnover in excess of Rs 23 billion (US $500 million).
Amul-III with its satellitedairies, with total installed capacity of 1.5 million lpd has
also been commissioned.Indias first vertical dairy (capacity: 400,000 lpd), owned
by the Pradeshik CooperativeDairy Federation (PCDF) has been commissioned
at Noida, outside DelhiDairy is a place where handling of milk and milk products

is done and technology refersto the application of scientific knowledge for

practical purposes.In India, dairying has been practiced as a rural cottage
industry since the remote past.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.The Indian Dairy Industry has
made rapid progress since Independence. A large numberof modern milk plants
and product factories have since been established. Theseorganized dairies have
been successfully engaged in the routine commercial productionof pasteurized
bottled milk and various Western and Indian dairy products. With
modernknowledge of the protection of milk during transportation, it became
possible to locatedairies where land was less expensive and crops could be
grown more economically.The Winning Edge Three aspects of Indias modern
dairy sector are particularly noteworthy.
9. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar A
vast market for dairy products is being built as disposable incomes increase.
Itsfocus is the increasingly affluent middle class, numbering some 300 million
almostthe population of the United States which is confined to well-defined
urban pocketsand is easily accessible. Milk occupies pride of place as the most
coveted food in theIndian diet, after wheat and rice. Milk-based sweets are a
culinary delight in all homesthroughout the year. The milk production is predominantly rooted in the cooperative system focus is onthe small rural farmer
having one or two cow/buffaloes, yielding 2-3 liters of milk peranimal. This system
is the basis of operation flood, the worlds largest dairydevelopment program.
The preferred dairy animal is the buffalo. Some 65 per cent of the world buffalo
milkis produced in India. It has 30 per cent higher total solids compared to cow
milk.
10. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in
DharwarDAIRY INDUSTRY PROFILE Human population: 953 million (70 million
dairy farmers) Milk production: 74.3 million tonnes (203.5 million lpd) Average
annual growth rate (1995-2000): 5.6% Per capita milk availability: 214 g/day or
78 kg/year Milch animals: 57 million cows; 39 million buffaloes: Milk yield per
breedable bovine in-milk: 1,250 kg Cattle feed production (organized sector):
1.5 million tonnes Turnover of veterinary pharmaceuticals: Rs. 550 crores
Dairy plants throughput: 20 mlpd Throughput as percentage of total milk output:
10The Dairy Movement in IndiaThe dairy cooperative movement in India
continues to be unparalleled in the world interms of its scope and scale.

Launched in the Kaira district of Gujarat during Indiasindependence, farmers

were encouraged to form a cooperative to counter exploitativelylow prices offered
for their milk by the monopoly milk supplier, Polson Dairy. The Kairacooperative
launched its operations in 1946 and operated at two levels. The primaryvillage
dairy cooperative society of milk producers collaborated with others in thedistrict
to form the milk producers union, which procured and processed the milk.
Theunion processed the milk that was procured from the village dairy
cooperatives at itsprocessing plants. In addition to collecting surplus milk, the
Kaira .

11. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in

Dharwarmembers in expanding production. The father of the Indian dairy
movement wasVarghese Kurien. A mechanical engineer from the Michigan State
University, US,Kurien helped India to become the largest producer of milk in the
world. As the number of district unions increased, the Kaira cooperative was
transformedinto the Gujarat Milk Marketing Federation Ltd (GCMMF) under the
chairmanship ofKurien. GCMMF coordinated the operations of the union and
marketed milk and milkproducts. As the operations were based in Anand,
Gujarat, this came to be known as theAnand model. This model was replicated
across India. In 1965, NDDB was formedunder the chairmanship of Kurien and
was mandated with the task of buildingcooperative dairies across the country.
Operation Flood was launched in 1970, whichsought to establish dairy
cooperatives across India, get rid of middlemen, removeseasonal price variations
and make it economically viable for farmers to undertakeproduction and
distribution of milk. Operation Flood achieved phenomenal success:trebling
Indias annual milk production from 21 million tonnes in 1968 to 89 milliontonnes
in 2004. Nearly 9 million small producers in 74,000 villages began
supplyinghygienic and fair priced milk to 300 million consumers and earning
revenues of Rs 25billion in the process. Of the Rs 2 billion invested by World
Bank in the second phase of OperationFlood, the net return to the rural economy
has been in the region of Rs 240 billion. peryear over a period of ten years or a
total of Rs 2.4 trillion in all. No other developmentprogramme in the world has
achieved such success. Several countries like Sri Lanka,Bangladesh, Nepal, the
Philippines, Malaysia and some African countries have decidedto implement
similar projects. The third phase of Operation Flood, implemented

12. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar198596 aimed at consolidating the achievements of the first two phases.
Infrastructurewas strengthened, production enhanced and animal healthcare and
nutrition improved.The Operation Flood III programme was funded by a World
Bank credit of US $365million and food aid worth Rs 2226 million. By May 1995,
Rs 15.78 billion had beeninvested in the three phases of Operation Flood. By the
time the third phase came to anend, milk processing capacity had grown to 17.2
million liters per day. Chilling capacityof 6.9 million litres per day had been added
and milk powder production capacity of 839tonnes per day had been set up. By
1999, average milk procurement by the cooperativeshad grown to 10.2 million
liters per day, of which 9.4 million liters was marketed asliquid milk. The
remainder was converted into milk powder, butter, cheese, ghee andother
traditional milk products.DDB (National Dairy Development Board) has been
focusing on intensive R&Dactivities in animal husbandry through the late 1990s.
It has set up an embryo transferlab at Sabarmati Ashram Gaushala in
Ahmedabad. NDDB has also been working onimproving nutrition quality of the
normal cattle feed. NDDB has made it possible totransport milk over long
distances by using over 140 insulated rail milk tankers, eachwith a capacity of
40,000 liters. This has enabled the National Milk Grid to supply milkto milkdeficient regions in the country.In the year 2000, NDDB (National Dairy
Development Board) announced a ten-yearplan called Perspective 2010. It is
aimed at strengthening the dairy cooperativemovement.

13. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThe

major objectives include: increasing milk procurement by cooperatives from
5.75 mt in 2000 to 17.8 mt in 2010; increasing the number of dairy cooperative
societies from 84,289 in 2000 to 129,480 in 2010; increasing the membership in
dairy cooperatives from 10.62 million in 2000 to 15.62 million in 2010; and
Increasing the amount of milk to be marketed from 4.7 mt in 2000 to 14 mt in
2010.Specific features of dairy in relation to marketing in developingcountriesThe
dairy industry in the developing countries has a number of specific features
whichdistinguish it from the other sectors of agriculture and have particular
implications formarketing. First, milk consists of over 85% water, and produced
daily.

14. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarhigh

costs of transportation are incurred per unit of output marketed. Also, milk
beinghighly perishable, it needs to be used within a short period or processed
andtransformed into a more stable, longer-storable form. The quality of milk
depends onfarm management practices, and milk is potentially subject to
adulteration, so strict andcomprehensive quality regulations may be necessary
when marketing involves morethan direct delivery by producers to consumers.
Second, the vast majority of the dairy farmers are small-scale producers,
whoproduce milk as a source of regular cash income. Dairy production is a laborintensiveenterprise, and dairy marketing activities often provide substantial
employment.However, because of asset fixity (high percentage of fixed costs),
dairy enterprises oftenrespond to market changes and incentives in a limited and
gradual way. Third, milk can be used to make a wide range of high quality
palatable andnutritious products, which often imply substantial value added over
the cost of the rawmaterial. When production and consumption points are far
apart and demand increaserapidly, processing of dairy products becomes very
important. Fourth, as a consequence of the above features of milk and the
marketvulnerability of its producers, cooperatives may assume a strong position
in milkprocessing. A survey by the International Dairy Federation in 1984
revealed that in 21developed countries together accounting for 55% of the worlds
milk supply, producer.
15. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in
Dharwarcooperatives marketed 86% of total sales of milk from farm to the first
handler. In someof these countries, cooperatives also handled 80-90% of the
total processing activity. Itmay be noted that the history of development of dairy
cooperatives in these countries arenot always similar. However, in most
developing countries, dairy producer cooperativesand cooperative processing are
either non-existent or very weak. The need forcooperatives in these countries is
driven by the need to capture some economies of scalein transportation and
processing where numerous small producers are scattered far awayfrom the
consumption centres. In many countries, this gap has been filled byestablishment
of parastatal dairy enterprises for collection and processing of milk topromote
domestic dairy production. In most cases, these enterprises ended up
processingsubsidized imported dairy products, neglecting the rural dairy sector.
The monopolisticcharacter of these enterprises often led to inefficiency thus they
failed to serve theinterests of domestic producers and consumers.Weaknesses in

physical and marketing links between rural producers and urbanprocessors and
consumers are among the major constraints to dairy development in
thedeveloping countries. It is important to be aware of and understand how such
constraintscan be addressed in order to devise mechanisms that can transfer
growing urban demandinto increased livestock production. Inadequate
infrastructure and inefficient marketingmay lead to increased transactions costs
and/or market failure. By better understandingthese costs and identifying the
ways of reducing their impact, policy prescriptions can bemade to promote
economic development by fostering production and trade.CHARACTERIZING
DAIRY MARKETING SYSTEMS.

16. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarA

dairy marketing system is characterized by: The range of dairy products
marketed; The size, structure and organization of the enterprises participating in
the market for each product and in the entire marketing chain; The conduct and
performance of the marketing system; and The existing marketing policies,
institutions and organizations, and the physical environment within which
marketing takes place.Functional parameters: These are key descriptors of how
the system operates.Examples include dairy products marketed, marketing
agents, marketing outlets, pricesat each marketing node, modes of transporting
marketed products, etc. Functionalparameters combine characteristics related to
market structure and conduct.Performance indicators: These parameters permit
assessment of the performance of thesystem. Examples are the percentage of
total dairy products marketed, the ratio ofstandardized to non-standardized
products marketed; the ratio of marketing to total costs;the ratio of farm gate to
retail price.
17. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in
Dharwarindicators is that they form the baseline against which any changes in
the efficiency orperformance of the system can be measured.Formal market
includes firms and organizations whose daily operations are guided bystatutory
rules and procedures, e.g. a parastatal dairy processing plant or a
companyengaged in dairy marketing. Informal market includes firms whose daily
operations are not guided by statutoryrules and procedures except for any trade
license, e.g. dairy producers and itineranttraders.A marketing chain defines the
flow of commodities from producers to consumers thatbrings into place economic

agents who perform complementary functions with the aimof satisfying both
producers and consumers.A marketing node is defined as any point in the
marketing chain where an exchangeand/or transformation of a dairy product take
place. A marketing chain may link bothformal and informal market agents.The
Liquid Milk & Milk Products Market Out of a total production of 88 mt of milk,
46per cent is consumed as liquidmilk. Less than 30 per cent of milk production
i.e. 26.4 mt is packaged. Currentlybarely 778 out of 3,700 cities and towns are
served by the milk distribution network,dispensing hygienically packed
wholesome, quality pasteurized milk. According to oneestimate, the packed milk
segment would double in the next five years.

18. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar The

effective milk market is largely confined to urban areas, inhabited by over25 per
cent of the countrys population. In urban India, an estimated 50 per cent of
thetotal milk produced is consumed by a population of roughly about 350 million.
Theexpected rise in urban population would be a boon to Indian dairying. Of the
three As of marketing - availability, acceptability and affordability, the dairysector
is at an advantage since Indians are a milk loving people. However what
continuesto be a challenge is the affordability factor. Volume sales could
dramatically increase ifsmall packs of 250 ml or less is made available. Sales of
milk powders in mini-sachets,for two cups of tea or coffee, could also help in
increasing volumes.Flavored Milk is increasingly becoming the toast of the milk
market. The overall marketfor flavored milk in India is estimated to have grown 27
per cent in value terms in 2004-05. Milk-based drinks are the flavor of the season
as consumers seek healthy lifestyles.Nestls Fruit and Milk and Amrit Foods
Gagan are the two brands that have asignificant presence in this segment Ultra
Heat Treatment (UHT) milk or long-shelf-life milk sales are estimated to be inthe
region of 70 million liters and the segment is growing at a healthy pace of 20-25
percent per year.Packaged curd and curd products such as lassi, buttermilk,
chhas, set dahi, mishti doi,etc. are new products and are witnessing a rapid
pace of growth. In terms of volumesthis just comprises 5 per cent of dairy
products, but they are growing at 10 per cent.

19. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in

Dharwarannum. Flavored yoghurt, which is popular in the West, however, has not

beensuccessful in India.Traditional products, such as paneer, mithai, khoa and

khoa-based sweets, which areavailable in the unorganized market, is a huge
segment. Apart from Amul which haslaunched paneer and its Mithaee brand
which offers traditional Indian sweets, theorganised sector has not tapped into
the potential that this sub-category offers.Some facts about organized Milk
market in India:Beginning in organized milk handling was made in India with the
establishment ofMilitary Dairy Farms.

20. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar

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
data1950 17 million tonnes1996 70.8 million tonnes1997 74.3
mT(Projected) 2020 240 mTExpected to reach- 220 to 250 mT 2020India
contributes to world milk production rise from 12-15 % & it will increase up to 3035% (year 2020)SWOT ANALYSIS OF INDIAN DAIRY INDUSTRYStrengths.
21. DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar
Demand profile: Absolutely optimistic. Margins: Quite reasonable, both on
packed and non packed liquid milk. Flexibility of product mix: tremendous
opportunities are present. With balancing equipment, we can keep on adding to
your product line. Availability of raw material: Abundant. Presently, more than 80
per cent of milk produced is flowing into the unorganized sector, which requires
proper channelization. Technical manpower: Professionally-trained, technical
human resource pool, built over last 30 years.Weaknesses: Perishability:
Pasteurization has overcome this weakness partially. Surely, many new
processes will follow to improve milk quality and extend its shelf life. Lack of
control over yield: Theoretically, there is little control over milk yield. However,
increased awareness of developments like embryo transplant, artificial
insemination and properly managed animal husbandry practices, coupled with

higher income to rural milk producers should automatically lead to improvement

in milk yields.