Ice-cream and the dairy industry could see some short-term demand constraints as consumers’ attention on essentials amid a fresh round of restrictions to curb the spread of covid-19.
Ice cream consumption will likely remain impacted due to the lockdown, reduction in out-of-home consumption and reduction in the number of functions, parties, and events. The consumption of milk-based beverages such as buttermilk, lassi, and flavoured milk has also been impacted due to a reduction in the number of visits to retail outlet.
Analysts also highlighted a go-slow in consumption of new dairy segments such as whey protein powder, custards and premium cheese variants.
The dairy sector had registered good demand in FY21 as milk and milk products are deemed essential commodities. Though companies lost out on business linked to hospitality, in-home consumption remained strong.
India’s dairy sector is vast with the participation of homegrown dairy cooperatives as well as large multinationals with good demand for milk and other dairy products such as butter, ghee and paneer.
Dairy benefited through market share gains in FY2021 and the trend is likely to sustain. Direct distribution of dairy products to large societies using own logistics and apps developed by dairy companies, and higher support to trade will help companies improve market share. Prolonged stay-at-home orders are likely to benefit consumption of tetra packs of milk and dairy whiteners.