Dairy market opportunity in India.
Investment thesis
· Large market opportunity, with milk & milk products market expected to grow at 9% CAGR to reach US$ 128B in year 2028 on the back of increasing consumption, product innovation, shift towards organized players and increased availability of milk
· Players having fully integrated supply chain have strong control over quality resulting in competitive advantage
· Standardized processes which can be replicated across locations with strong tech capabilities and well-formed operational practices
· Attractive adjacencies: Right to play in adjacent categories such as fruits and vegetables, eggs & bread and milk products with synergies across customers, channels, and infrastructure
· Opportunities to capture new micro markets: Potential to tap into new micro markets and serve areas that are currently served by existing unorganized and organized players
· Strong customer value proposition due to flight to quality, convenience offered and assurance of freshness without any adulteration
· Superior unit economics: Target has better unit economics compared to its peers on the back of lower COGS and variable cost
