How to Start a Profitable Dairy Products Manufacturing Business

Dairy products manufacturing business in India is a very lucrative and growing sector as India is the world’s largest milk producer and contributes 25% of global milk production. Apart from that, it also boosts the rural economy and creates many job opportunities. Yes, there will always be a huge demand for dairy products due to the increase in per capita consumption of milk and dairy products, changing food preferences and growing urbanization. Moreover, this sector is mainly promoted by the government through various skill development programs for dairy entrepreneurs in India. Therefore, starting this dairy manufacturing business will always be a successful business for you. So, if you are thinking of getting into this dairy business, this article will help you understand the various aspects and set up a successful venture.

Market Scope of Business

Dairy products are not just a household essential in India, it is a daily routine. Yes, everyone in the country associates every tea, every meal, every sweet dish with dairy products in some way or another. Yes, it is from milk to ghee, curd, paneer, cheese, butter and flavored drinks. The uses of dairy products are endless. Moreover, the demand for packaged, healthy dairy products in India is growing rapidly. Yes, this dairy industry is expected to cross ₹18 lakh crore by 2027. So, this is a huge opportunity for entrepreneurs. Yes, this market is not only big, it is thriving.

Choose Your Product Line

Before starting a dairy business, you should know about the products made from milk. Generally, milk can be converted into various consumables, and you don’t have to make them all at once. So, start with easy-to-make, high-demand products like raw milk, curd, butter, ghee or flavoured milk. Later, once you have built a local brand and supply chain, you can expand into premium products like cheese, paneer, ice cream or probiotic drinks and dairy desserts. Also, you no longer need a formal degree to start a business, but can join 1 week to 1 month courses offered by local private and government dairy boards to learn about hygiene, milk handling and basic processing.

Business Investment

Friends, the start-up capital you need to start this dairy product manufacturing business depends on the dairy products you want to produce. Yes, roughly speaking, setting up a small-scale dairy business will cost you an investment of Rs 3 to 5 lakhs. And a complete processing unit may require an investment of Rs 10 lakh to Rs 50 lakhs or more, but this investment amount is only an estimate and may vary at any time. Another great thing is that the Government of India and the state governments run bank loans, grants and technology schemes to improve the dairy business, so, by availing these schemes, you can significantly reduce your investment burden.

Location and Space Requirements

Next, when choosing a location for a dairy production unit, the location should be close to adequate water and continuous milk suppliers and have continuous electricity, as these are essential for the production of many dairy products. Next, the space requirement, generally, a small unit comprising a milk collection area, processing area, packaging area, storage area and office space can be started from 1000 sq ft. Also, if you are planning to start a large-scale unit, it will require more space. Most importantly, you should choose a location that has transportation facilities so that you can transport the finished products to the market.

Get Raw Material

The most important raw material for producing dairy products is fresh and high-quality milk, and your entire business depends on the quality of your milk, so, you can source milk from trusted local dairy farmers or dairy cooperatives. Apart from this, you need other raw materials for various products such as starter culture for yogurt, rennet or lemon juice for cheese, sugar, flavors and colors for ice cream, so it is important to source raw materials only from reliable suppliers.

Required Machineries

Now let’s look at the equipment required for your business, which is selected based on the range of products you want to produce. However, the basic machines include milk separators, milk collection tanks, pasteurizers to sterilize milk, cream separators to make butter and cream, cooling units to keep milk cool, homogenizers to concentrate milk, packaging machines, yogurt and cheese making equipment, ice cream machines and goya making machines. All these machines can be purchased from machinery suppliers in your town or can be found on sites like Indiamart and TradeIndia.

Get Licensing and Regulations

This is a food business, so safety and hygiene compliance is very important. So, first of all, you need an FSSAI license which ensures that your products meet safety standards. Next, you will need a GST number and local municipal permits. Additionally, depending on the size and nature of your business, you may need other licenses related to factory operations, health and safety. But don’t worry, it is very possible with the right help from local legal counsel.

Manufacturing Process

Next, to produce the dairy products you are going to make, first the milk is procured from the dairies or local collection centres and checked for quality. Next, it is cooled and taken to the processing unit, After that, the processing is mainly pasteurization, whereby the milk is heated to a high temperature to kill harmful bacteria. After this, further processing is done according to the type of product you are making.

To take an example, when you want to produce yogurt, milk is cooled down, starter culture is added and allowed to ferment. Or when you produce paneer, the milk is turned into curds and the solids are extracted. Also, for butter and ghee, the milk is processed, then the cream is separated and blended. Lastly, they pack the products at the right temperature and it is ready to be in storage however, hygiene and control quality are essential at this stage.

Marketing Tips

Your first customers in this business will come from your local community. So, distribute samples to them and local small tea shops, cafes and restaurants to attract them. Apart from that, milk can also be sold by listing on local online platforms like BigBasket, Swiggy Instamart or Blinkit. Next, be active on social media and highlight your quality by posting a video showing the process of making your paneer. Also, participate in local fairs and public events and then offer promotional offers and discounts to attract customers who come there. By following these, you can easily attract your customers and grow your brand.

Get the best price at Indiamart for:

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Butter Making Machine – https://IndiaMART.in/v/Av4q3bo8

Paneer Making Machine – https://IndiaMART.in/v/7q1Jv50p

Ice Cream Machines – https://IndiaMART.in/v/57PLEnn6

Dairy Products Manufacturing Training – https://tinyurl.com/2bbnggo2

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