Friday, March 29, 2024

Urban consumption driving India’s cheese demand

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In a report by USDA’s Foreign Agricultural Services, new market opportunities are observed in India’s cheese market. The report says Indian cheese production is growing at about 15% a year, driven partially by India’s young demography and growing urban middle class whose food trends are leaning more towards a Westernised diet. Euromonitor estimates retail sales of cheese grew from $99 million in 2010 to $244 million in 2014. In volume terms it is estimated that retail cheese sales in 2014 were 47,600t and total restaurant and hotel cheese purchases were 51,800t.
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Only a handful of companies dominate the organised cheese sector, one with 50% market share. Cheese sold is typically either paneer (traditional) or processed. The emergence of semi-hard or hard cheese corresponds with Western dietary adoptions catering  mainly for accommodation, restaurants, institutions and the growing class of middle-high income consumers.

The young demographic and India's urban middle class are seen to be driving demand for non-traditional cheese. It is believed this sector of Indian society are more experimental and have been exposed to Western diet more so than older people or low income earners.

A portion of 60% of total Indian cheese sales comes from urban India. In organised retail, most sales are of paneer and processed cheese due to price. However, 80% of the total cheese market is processed cheese which is also  often used in the increasingly popular fast food industry for burgers and pizza.

The level of cheese imports is relatively low but it is mostly influenced by demand from restaurants, hotels and institutions.

While the world average cheese consumption per capita is 7kg a year, India's national average is just 200g. Its urban consumption is 700g per capita. This shows the potential of further growth in this sector as incomes are raised and the urbanisation trend continues. Further influence of Westernised diets will also add to this growth as other cheese types become a normal part of living.

A limitation in the Indian cheese industry is the underdeveloped and inconsistent cold chain sector. This creates challenges around distribution of cheese products around the country. 

Download the full report here

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