Got milk?

With Indian cold chains so dodgy, TetraPak UHT milk is streaming in, but only to skim the market's surface.

The urban shift from doodhwala milk to pasteurised milk in bottles and plastic packets was a clear case of value addition. It combined hygiene with convenience. But what about Tetrapak Ultra High Treated (UHT) milk? Is it the next stage of market evolution?

Such milk is fast crowding shopshelves in Delhi, with brands such as Amul, Nestle, Mother Dairy and Vijaya vying for attention, and while it represents only a fraction of India's milk market, offtake is rising.

Of the 96 million tonnes of milk India produces (2005-06 figure, by the Indian Dairy Association), only a fifth is had as processed milk every year, with only a very small portion of this "" about 4 per cent "" finding its way into UHT packs.

"The market is currently of 2,44,000 litres per day," estimates Paul Thachil, CEO, Mother Dairy India. "The category is growing at a steady rate of 20 per cent."

The advantage of UHT milk packs is shelf life: an unopened pack of can be kept at room temperature for six months without spoiling or loss of nutritional value (opened, two days).

In theory, this not only permits the penetration of non-fridge households, it allows wide distribution without the need of a cold chain.

In fact, it's the latter fact that's pushing up volumes, according to D P Tripathi, former secretary, ministry of food processing industry, government of India, and presently an advisor with the Aseptic Food Processing and Packaging Association of India.

"No proper cold chain infrastructure in the country is one of the major reasons for UHT milk becoming popular, apart from its advantage of convenience in urban centres."

If the original idea of food packaging is to offer higher value at lower cost, though, that's not happening. In milk-scarcity zones (in northeast India, for example), UHT packs have reached dhaba level, but otherwise, they're barely skimming the market's surface.

Prices remain at a premium to regular packet milk: about Rs 28 per litre for toned milk, Rs 10 higher than a plastic pack. And brands such as Nestle (a steep Rs 35 per litre) and Amul are looking at the upper-end consumer.

"We are planning to have value addition in Amul UHT Milk in terms of fortification with various minerals and vitamins," says R S Sodhi, chief general manager, Amul, which claims over two-thirds of the Indian UHT market.

The job of market penetration, then, remains with regular packet milk, and this would depend on how soon India gets its cold chains in place.