India Fresh Cream Market Outlook to 2028

India Fresh Cream Market Overview

• The India fresh cream market has experienced significant growth in past five years and is valued at USD 5 billion. This growth is primarily driven by increasing demand from both household and commercial sectors, reflecting a compound annual growth rate over the past five years.
  
• Maharashtra emerges as the leading market for fresh cream in India, holding a majority share. This dominance is due to the state's robust dairy industry, well-established distribution networks, and a high concentration of urban consumers with evolving dietary preferences. The presence of major dairy cooperatives and private players in Maharashtra has further strengthened its position in the fresh cream market.
• The White Revolution 2.0, launched on September 19, 2024, aims to modernize Indias dairy sector by establishing 200,000 new cooperatives, enhancing milk production and processing. The initiative supports Automatic Milk Collection Units (AMCU), bulk milk coolers, and testing equipment. It targets increasing milk procurement from 660 lakh kg/day to 1,007 lakh kg/day by 2028-29, boosting rural livelihoods and cooperative efficiency.

India Fresh Cream Market Segmentation

• By Sales Channel: India's fresh cream market is segmented by sales channel into online and offline platforms. The offline segment holds a dominant market share, primarily due to the extensive presence of supermarkets, hypermarkets, and local retail stores across the country. These outlets offer consumers the advantage of immediate purchase and the ability to assess product quality firsthand, fostering trust and convenience. The widespread availability of fresh cream in offline stores, even in smaller towns and rural areas, ensures accessibility for a broad consumer base. In-store promotions, discounts, and sampling further attract customers, reinforcing the prominence of the offline segment.

• By Application: The fresh cream market is also segmented by application into commercial and household sectors. The commercial sector, encompassing restaurants, bakeries, and cafes, accounts for a significant share of the market. This is driven by the extensive use of fresh cream in various dishes and desserts, meeting the high demand for quality and consistency in food service establishments. The growing food service industry further amplifies this demand, solidifying the commercial sector's leading position.

India Skim Milk Powder Market Competitive Landscape

The India fresh cream market is characterized by the presence of several key players, including Gujarat Cooperative Milk Marketing Federation Ltd. (Amul), Mother Dairy, and Parag Milk Foods. These companies have established strong brand recognition and extensive distribution networks, allowing them to maintain significant market shares.

India Skim Milk Powder Market Analysis

Growth Drivers

• Rising Demand in Food and Beverage Industry: The growing food and beverage sector in India is significantly driving cream consumption. Over 60% of cream sales come from hotels, restaurants, and cafs (HoReCa), where it is widely used in desserts, sauces, and gourmet dishes. Also, the rising popularity of bakery and confectionery products, with an annual growth rate of 12-15%, is further fueling demand for fresh cream in the market.
• Expansion of Retail and Institutional Sectors: The Fresh Cream market in India is segmented into retail and institutional sectors, with the retail sector currently holding the largest market share. The proliferation of supermarkets, hypermarkets, and convenience stores has made fresh cream more accessible to consumers, contributing to market growth. Additionally, the institutional sector, encompassing hotels, restaurants, and cafes, has seen increased demand for cream products, further propelling the market.
• Rising Disposable Income and Urbanization: Indias urban population is expected to reach 600 million by 2036, accounting for 40% of the total population, up from 31% in 2011. This shift, along with increasing disposable incomes, has led to a higher demand for premium dairy products, including fresh cream. As urban consumers prefer convenience and diverse food choices, the market for fresh cream in ready-to-eat meals, desserts, and bakery products is expanding significantly.

Market Challenges

• High Initial Costs: Establishing modern dairy processing facilities requires significant capital investment, which can be a barrier for small-scale producers. The cost of setting up equipment, adhering to compliance standards, and maintaining quality control can be substantial. This financial burden may deter new entrants and limit the expansion of existing players, affecting the overall supply of fresh cream in the market. Additionally, high operational costs can lead to increased product prices, potentially reducing consumer demand.
• Technical Challenges: The dairy industry faces technical challenges such as maintaining cold chain logistics, ensuring consistent product quality, and managing shelf-life. Inadequate infrastructure can lead to spoilage and financial losses. Moreover, variations in milk quality due to factors like feed and animal health can affect the consistency of fresh cream products. Addressing these technical issues requires investment in technology and training, which may not be feasible for all producers.

India Skim Milk Powder Market Future Outlook

Over the next five years, the India fresh cream market is expected to show significant growth, driven by continuous urbanization, increasing disposable incomes, and the expansion of the foodservice industry. The growing popularity of Western cuisines and bakery products is also anticipated to contribute to the rising demand for fresh cream.

Market Opportunities

• Product Innovation and Diversification: The flavored dairy market is expanding as consumers seek healthier and tastier options. The introduction of flavored and low-fat cream variants has gained traction, with the segment expected to grow at a CAGR of over 2% in the coming years. Increasing demand for value-added dairy products is projected to drive a 5-7% rise in flavored cream sales, reinforcing the markets upward trajectory.
• Expansion into Rural Markets: Rural consumer spending in India has been rising, with per capita expenditure growing by 9.2%, surpassing urban areas. This increase in purchasing power is driving greater dairy consumption, including fresh cream. With rural dairy product sales expected to grow by 10-12% annually, expanding distribution networks in these areas presents a major opportunity for dairy companies to boost fresh cream sales and market penetration.