Research on Baroda dairy product Essay

Executive Summary This project has been undertaken in order to understand the Customer Perception and liking towards Baroda Dairy Products. The task is to know and measure its effectiveness in terms of Price , Quality , Quantity , Packaging , Product availability, Product delivery, Product maintenance (storage), merits and demerits of the existing distribution chain, areas and scope of improvement and finding ways to make the Product more user friendly and Available. There are various ways to carry out this project and reach desired objectives for e. g. , Expert Opinion, In-depth interview with Customers, primary data collection and analysis etc. but out of all these options available for data collection, the method chosen was primary data collection and analysis i. e. questionnaire based data collection and analysis. The reasons for choosing this technique for project are as under: This method gives the opportunity to directly interact with the Customers and helps in knowing what they actually think of the Baroda Dairy Products. The most reliable source of information from all the other mentioned above. Gives a better insight of Customer perception as compared to other technique. This technique will yield an Unbiased, To the Point and Reliable result. It is best to know from the Customers as to what they think about the Existing Product and Satisfaction Level. From this project I came to know about co-operative sector, dairy industry, distribution and handling of highly perishable product like milk. I also came to know what Customers think of current Products and Services of Baroda Dairy. Customer loyalty to Baroda Dairy and its products. I got to know various merits of the existing distribution channel. I also discovered some areas of distribution channel which if worked upon can yield more profitable gains and can also increase the availability of Products. I critically analyzed the answers that were provided by Customers. In order to get quality information, I used questionnaire as a tool which helped me in this project. After collection of the desired data, the data has been critically analyzed to draw conclusion out of mathematical data. The collected data has been categorized and presented in to the meaningful diagrammatic presentations following its proper classification. All these analytical information is subjected to the conclusions following justified interpretation of the results drawn from the statistical tools. Introduction Dairy industry is one of the growing sectors in the Indian Food Processing Industry. This sector Grew at CAGR of 3. 7 % in the last decade. An everyday useful industry which was into rags during 1940s is now one of the most performing industry in the country, courtesy – White Revolution. But still the market is dominated by unorganized sector which contributes about 80% of the total milk marketing in the country. Thus lies a very large scope for the organized sector to enter in this industry. Dairy contributes to 16% of consumer spend on food – 18% in Urban areas of the country and 15% in rural areas. It is one of the most important and exceptionally well performing industries. Each and every state has its own Federation that governs various co-operatives in each state which are into processing of milk and other milk products and the Governing body for these state federations is National Dairy Development Board. One of the main reasons for the progress of dairy industry in India was the white revolution and the Co-operative movement. Also what has added to its development is the linkage it has created between producers and consumers which has eliminated the middle man. Also strengthening of production, procurement, infrastructure and technology has made dairy farming India’s largest self-sustainable rural employment generator. Also it is notable that dairy sector has gained prominence over the years as it delivers one of the most important food product i. e. Milk and its by-products without which it is really very difficult to live. Thus looking at the current scenario, following things can be analyzed: On the production side: Slow growth in productivity likely to increase demand- supply gap There is a need to promote interventions that would increase production efficiencies. Need to secure availability of fodder and high quality breeds. Promoting entrepreneurship in large herd dairy farming – through PPP. There is increasing interest in Intensive dairy farming – increasing demand & farm gate price. On the demand side: Indian dairy market offers diverse opportunities to tap into. Unique nature of the market requires entrepreneurs to study it carefully before entry. India has the credit of being the largest producer as well as the biggest consumer of milk in the world. It also has the world’s largest dairy herd (comprised of cows and buffalos). In 2010-11, livestock generated output worth INR 2,075 billion (at 2004-05 prices) which comprised 4% of the GDP and 26% of the agricultural GDP. India’s milk production accounts for 16% of total global output. The dairy industry is expected to grow 4-5% per annum. A budgetary outlay of INR 31, 560 Crores is recommended by the working group for 12th Five Year Plan of Planning commission of India for animal husbandry and dairy sector to achieve growth rate of 6%. In the past 20 years, milk production in India has doubled and has reached the 116. 2 million tonnes a year thus becoming India’s No. 1 farm commodity. The current market size of the dairy industry is INR 2. 6 trillion and is estimated to grow up to INR 3. 7 trillion by 2015. The matters relating to livestock production, preservation, protection and improvement of livestock & dairy development comes under Department of Animal Husbandry, Dairying & Fisheries of the Ministry of Agriculture, GoI. Value-added products like Whole milk powder, Skimmed milk powder, Condensed milk, Ice cream, Butter and Ghee have immense potential for export. As per the latest statistics of National Dairy Development Board (NDDB), the dairy cooperative network in the country includes 177 milk unions covering 346 districts and over 1, 33,000 village-level societies with a total membership of nearly 14 million farmers. All the statistics given above are indicators of a flourishing dairy sector in India providing suitable opportunities to the industries engaged in the dairy business. India: Milk’s New Horizon A growing population and increased incomes from an economic boom are the driving forces behind a surge in dairy product demand in India. One key to the success of recent consumption trends has been an American standby: the refrigerator. Dairy Demand in an Emerging Economy A new study reports that the demand for milk in India will rise by a compound annual growth rate of about 4% over the next few years (RNCOS, 2012). Research shows that as incomes increase consumption of animal products, specifically milk and dairy products, intensifies (Wenge Fu et al. , 2012). In fact, India’s upturn in demand for dairy products far outweighs the growth in demand for animal products such as meat and eggs. India owes this large demand for milk to its largely vegetarian population. Dairy product demand in India has increased dramatically in both rural and urban sectors. However, as a larger population is emigrating from rural areas to cities an even greater demand may be placed on dairy products. Between 1980 and 2010, India’s level of urbanization increased from 23 to 30 percent of the population. The second largest country in the world, India is projected to grow from 1. 2 billion people in 2010 to just under 1. 7 billion by 2050 with 55% of that population being urban. This increase in buying power allows consumers to purchase durable goods such as refrigerators that enable larger consumption of dairy products than ever before. Moreover, a more urban population also offers the increased opportunity for cultural exchange, leading to increased consumption of meat and dairy products not only in India but across Asia. All of these factors coupled together lead to growing international market opportunities for milk and dairy products in India previously unnoticed in the global dairy industry. India is the world’s largest producer of milk. However, the majority of that milk is buffalo, followed by cow and goat milk as shown in Table 1 (FAOSTAT, 2013). Since 2005, 53% of the fluid milk produced in India has come from buffalo, 43% from cows and 4% from goats. In 2011, India produced 34% more milk than the U. S. up from 19% more in 2005 (Table 2). For dairy cow production, the United States produced 70% more milk in 2011 than India. One study by the OECD-FAO in 2011 suggests that India will have sufficient production to meet demand for milk and its products (excluding butter) through 2020. Nevertheless, as Wenge Fu et al. note, the rapid increase in population and changes in consumption patterns make such estimations difficult. Fluid milk demand is projected to grow at 10. 2% per year, while production is projected to grow by 3. 7% based on 1994 to 2004 growth rates. Competition for land to produce grains and feed products for animal production may limit agricultural growth in all sectors. This pressure on natural resources and its effect on production could lead to a greater reliance on imported dairy products. In the short run, India’s dairy sector is well positioned to accommodate the rapid growth in dairy product consumption. An increasingly urbanized population with a greater disposable income will drive demand leading to opportunities from the global milk market to supply this new generation of Indian consumers. Table 1. India’s Milk Production by Species from 2005 to 2011 in Tonnes (FAOSTAT, 2013) Year Item 2005 2006 2007 2008 2009 2010 2011 Avg Buffalo Milk (whole, fresh) Production in Tonnes 52,070,000 54,382,000 56,630,000 57,132,000 59,201,000 62,350,000 62,350,000 % of total production 54% 55% 54% 53% 53% 53% 52% 53% Cow Milk (whole, fresh) Production in Tonnes 39,759,000 41,148,000 44,601,000 47,006,000 47,825,000 49,960,000 52,500,000 % of total production 42% 41% 42% 43% 43% 43% 44% 43% Goat Milk (whole, fresh) Production in Tonnes 3,790,000 3,818,000 4,481,000 4,478,000 4,467,000 4,594,000 4,594,000 % of total production 4% 4% 4% 4% 4% 4% 4% 4% Total Production in Tonnes 95,619,000 99,348,000 105,712,000 108,616,000 111,493,000 116,904,000 119,444,000 Table 2. Milk Production in India and the United States from 2005 to 2011 (FAOSTAT, 2013) Year Country 2005 2006 2007 2008 2009 2010 2011 All Milk Production in Tonnes India 95,619,000 99,348,000 105,712,000 108,616,000 111,493,000 116,904,000 119,444,000 USA 80,254,500 82,463,000 84,189,100 86,177,400 85,880,500 87,474,400 89,015,200 % Difference between India and U. S. 19% 20% 26% 26% 30% 34% 34% Cow Milk Production in Tonnes India 39,759,000 41,148,000 44,601,000 47,006,000 47,825,000 49,960,000 52,500,000 USA 80,254,500 82,463,000 84,189,100 86,177,400 85,880,500 87,474,400 89,015,200 % Difference between U. S. and India 102% 100% 89% 83% 80% 75% 70% As we have already seen how the production of milk and its consumption have increased over the past decade thus the problem of it distribution and availability also arises. This brings the problem of Effective distribution channel into light. For the same purpose the study has been undertaken in order to Measure the Effectiveness of the Distribution System of Baroda Dairy. Introduction to Gujarat Cooperative Milk Marketing Federation Ltd. The GCMMF is the largest food products marketing organisation of India. It is the apex organisation of the Dairy Cooperatives of Gujarat. Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an economic network that links more than 3. 1 million village milk producers with millions of consumers in India. The cooperatives collect on an average 9. 4 million litres of milk per day from their producer members, more than 70% of whom are small, marginal farmers and landless labourers and include a sizeable population of tribal folk and people belonging to the scheduled castes. The turnover of GCMMF (AMUL) during 2010–11 was 97. 74 billion (US$1. 7 billion). It markets the products, produced by the district milk unions in 30 dairy plants. The farmers of Gujarat own the largest state of the art dairy plant in Asia – Mother Dairy, Gandhinagar, Gujarat – which can handle 3. 0 million litres of milk per day and process 160 MTs of milk powder daily. GCMMF is a unique organization which is created by farmers, managed by competent professionals serving a very competitive and challenging consumer market. It is a true testimony of synergistic national development through the practice of modern management methods. GCMMF Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India’s largest food product marketing organisation with annual turnover (2012-13) US$ 2. 54 billion. Its daily milk procurement is approx 13 million lit per day from 16914 village milk cooperative societies, 17 member unions covering 24 districts, and 3. 18 million milk producer members. It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly known as ‘AMUL’, which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. Its success has not only been emulated in India but serves as a model for rest of the World. It is exclusive marketing organisation of ‘Amul’ and ‘Sagar’ branded products. It operates through 48 Sales Offices and has a dealer network of 5000 dealers and 10 lakh retailers, one of the largest such networks in India. Its product range comprises milk, milk powder, health beverages, ghee, butter, cheese, Pizza cheese, Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc. GCMMF is India’s largest exporter of Dairy Products. It has been accorded a â€Å"Trading House† status. Many of our products are available in USA, Gulf Countries, Singapore, The Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 13 years. For the year 2009-10, GCMMF has been awarded â€Å"Golden Trophy† for its outstanding export performance and contribution in dairy products sector by APEDA. For its consistent adherence to quality, customer focus and dependability, GCMMF has received numerous awards and accolades over the years. It received the Rajiv Gandhi National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India’s Most Respected Company Award instituted by Business World. In 2003, it was awarded the The IMC Ramkrishna Bajaj National Quality Award – 2003 for adopting noteworthy quality management practices for logistics and procurement. GCMMF is the first and only Indian organisation to win topmost International Dairy Federation Marketing Award for probiotic ice cream launch in 2007. The Amul brand is not only a product, but also a movement. It is in one way, the representation of the economic freedom of farmers. It has given farmers the courage to dream. To hope. To live. GCMMF – An Overview