Why Big Dairy Companies Struggle In India

With its dairy-heavy diet of curries and yogurt drinks, India seemed a likely place for the French dairy company Danone to find success when it entered the country in 2011. But by 2018, Danone ceased operations of its Indian dairy division.

India is the world's top producer and consumer of dairy — in 2018 alone, the country's 75 million dairy farmers produced 410 billion pounds of milk, about 22% of global production. With this and its dairy-heavy diet of curries and yogurt drinks, the giant French dairy company Danone hoped to find success in the country, opening its own production line in 2011.

This division failed to account for more than 10% of its sales in India, the vast majority instead coming from its 'specialized nutrition' segment. Analysts say that India's highly localized, fractured dairy industry confounded Danone, a company accustomed to the relatively more consolidated dairy industries of the US and its native France.

Moreover, Danone isn't the only large dairy producer that's had trouble in the Indian market. Indian companies like Amul and Mother Dairy and multinational companies like Nestle have less than an estimated 10% of overall market share despite being in the company much longer than Danone.

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Why Big Dairy Companies Struggle In India