Dairy is a major part of the Indian food palette, appearing in both food service and packaged goods, whether as a finished product (such as milk or curd) or as a key ingredient in items like butter, cheese, and paneer. Dairy is a microcosm of the food industry due to its inherent presence in our daily diet, with dairy customers' choices generally influenced by the same trends influencing the broader food market.
The COVID-19 pandemic appears to be ushering in a new age for the world economy, one that will affect the dairy industry. The pandemic of COVID-19 has had a significant impact on how people shop, eat, and live. Lockdowns and restaurant closures have contributed to an increase in the number of meals cooked and consumed at home, resulting in significant volume growth in dairy products like butter (up more than 3% year over year) and fluid milk (more than a two-percentage-point rise, year over year). While these consumer patterns have benefited retail-facing dairy enterprises, the future of dairy consumption in a post-COVID-19 environment is less certain.
While financial assistance from the government is critical in the short term to help many dairy farms and processors survive the pandemic, the dairy industry and governments must collaborate to develop long-term strategies and policies that balance the industries' efficiency and flexibility, product specialization and diversification, supply chain integration and local food systems, market mechanisms, and policy regulations and interventions.
As per the recent survey conducted by McKinsey, the major insights drawn were -
1. Dairy demand is stabilizing at a higher rate than pre pandemic demand.
2. Dairy alternatives will continue to gain popularity as health and wellness ideas take hold, but not at the expense of traditional dairy.
3. During COVID-19, experimentation with new dairy products and brands surged and is likely to continue.