Growing at a compound annual growth rate (CAGR) of about 40 per cent to 45 per cent annually, the organised yogurt industry is likely to touch Rs 1,200 crore by 2015 from the current level of Rs 750 crore as a low-fat – even no-fat – alternative, according to a report titled 'Yogurt Market in India', by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the country's apex trade bodies.
The report revealed that yogurt, which made its foray into the Indian market just a few years ago, has taken over the decades-old dahi in metros, semi-metros due to health-consciousness, rising disposable incomes, quality dependence and more awareness about the product and has given tremendous boost to food processing sector.
According to the paper, which was released recently by D S Rawat, secretary general, ASSOCHAM, there are three factors that have fuelled the growth of the organised yogurt industry, namely the wide availability of raw material (milk); a growing willingness among consumers to experiment, and increasing disposable incomes.
He said, “In India, yogurt has been positioned as a healthy dessert option, so the increasing health and wellness awareness will help yogurt to gain popularity with same momentum. Consumers are becoming increasingly concerned about hygiene and fat and nutritional content, so the demand for packaged yoghurt is expected to rise robustly in coming years”.
ASSOCHAM's paper said that the branded yogurt market in India has huge potential, with consumers increasingly demanding greater hygiene and quality. Flavoured yogurt is rapidly becoming a part of regular grocery purchases for many affluent urban households in tier-II and tier-III cities.
“Drinking yogurt may compete with flavoured milk drinks and fruit or vegetable juices, while spoonable fruit yoghurt may emerge as competition for ice-cream as a dessert. Low/no-fat and low/no-sugar yogurts are new trends in the market,” Rawat said.
The paper highlighted that the mango, strawberry and pineapple variants, which are common to all brands, are finding takers. Mother Dairy also has yogurt in raspberry, blueberry and plum flavours.
Rawat said, “Frozen yogurt (plain and flavoured) has already started to replace ice cream to a certain extent. Consumers have already started to look at it, not only as a healthy snack, but also as a healthy replacement for meals.”
“Companies are also tying up with corporates to target office employees, which will also help in increasing consumption by making it a quick, convenient and healthy substitute for meals. The demand for the frozen yogurt market sees growth of 70 to 80 per cent each year over the next three years,” the ASSOCHAM paper said.
“Several health-conscious mothers and youngsters are switching to frozen or flavoured yogurt from drinks or ice-cream. Consumption in India still stands at a nascent 0.3kg per capita every year as compared to 17.8kg in France,” it added.
The paper said that organised retail formats are also fuelling the growth, adding that big players like Amul, Mother Dairy and Nestle are eying the frozen yogurt segment. Further, premium brands like Red Mango and Cocoberry are also trying to capture the growing market.
The choices in the frozen yogurt market have already started opening up with probiotic, vitamin-fortified, stirred, creamy and pulp-laced. There are also a number of flavours offered, including vanilla, mango, pineapple, strawberry, raspberry and plum. The price range offered by Nestle, Amul, Mother Dairy, Danone etc., ranges between Rs 18-20 for a 100ml cup of yogurt.
Rawat said, “The Indian consumer is in a transition phase from home-made food to packaged food products. As food habits are changing, they are now becoming more health-conscious.”
“Frozen yogurt is finding its place as a substitute to regular desserts amongst the health-conscious population. Packaged yogurt brands are essentially about healthy options at any time of the day and can be consumed as a light snack or a meal,” the survey added.
“The lack of adequate cold chain infrastructure is the biggest roadblock, which restricts distribution to cities and towns away from the manufacturing facilities. Similarly, if brands are able to create some parallels for frozen/flavoured yogurt that could help increase adoption,” the paper added.
