New Delhi: Dairy prices are expected to remain elevated and could rise further during the festive season, according to Srideep Madhavan Kesavan, CEO of Heritage Foods. He said prices of milk, ghee, paneer, curd, yoghurt, butter and ice cream have increased significantly compared with last year, while demand across the category remains firm.
“Prices are going to be higher than last year across the categories where we play,” Kesavan said, attributing the increase to a combination of higher milk procurement costs, animal-feed expenses and other input pressures.
Milk production and feed costs under pressure
Kesavan said milk production has slowed this year, contributing to higher milk prices. According to him, cow milk prices have increased by around 13–14% year-on-year, while buffalo milk has become more difficult to procure.
He also pointed to a sharp increase in protein-related feed costs, saying the cost of protein inputs has risen substantially over the past 18 months to two years.
The CEO identified several factors contributing to higher dairy input costs, including geopolitical disruptions in West Asia, the government’s E20 ethanol-blending programme and weak monsoon conditions.
According to Kesavan, increased demand for feedstocks such as maize and de-oiled rice bran (DORB) linked to ethanol production has added pressure to animal-feed costs. A weak monsoon, meanwhile, has affected the availability of green fodder and water in some dairy-producing areas.
Festive demand remains strong
Despite higher prices, Kesavan said demand for dairy products remains robust.
Milk contributes around 52% of Heritage Foods’ revenue, while the remainder comes from value-added dairy products. The company sees seasonal demand for products such as curd and other drinkable dairy products during summer, while paneer, ghee, butter and sweets see stronger demand during the festive period.
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Heritage Foods procures milk from more than 3 lakh farmers across nine states. Kesavan said the company is working with its farmer network to improve herd productivity and manage increasing feed costs.
Shift towards branded dairy products
Kesavan also highlighted structural changes in India’s dairy market. He said stricter labelling and packaging requirements have encouraged consumers to move from loose and unbranded dairy products towards packaged and branded offerings, which he described as positive for the organised dairy sector.
He also pointed to growing consumer interest in high-protein, probiotic, low-fat and A2 milk products, reflecting a greater focus on nutrition and functional attributes.
The expansion of quick-commerce platforms, he added, has further improved consumer access to packaged and value-added dairy products.
With milk procurement and feed costs remaining elevated, the festive season is likely to test how consumers respond to higher dairy prices while demand for traditional and value-added dairy products remains strong.
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