The dairy industry in a nutshell

Over the past 10 to 15 years, Sri Lanka has been identified as a country where the demand for Full Cream Milk Powder (FCMP) was growing. But the picture is changing within the last 3 years.

Dairy industry as a whole has been shrinking by approximately 10 to 15% during the last 3 years. One could find a mixed bag of over 12 companies competing heavily to market nearly 15 brands of Full Cream Milk Powder, in the dairy industry. Out of these 12 companies, two are multinationals supported by their respective principals.

The others are local entrepreneurs and among them there are big players well established and long-standing in the industry. Together, all these companies generate a volume of approximately 5,000 metric tons of business per month. That is basically the consumption of FCMP in Sri Lanka which includes the consumption of milk tea, other milk based drinks, biscuits, cookies and cakes.

Fresh cows milk, although so much is spoken to be the best for consumption, has not proven to be popular as the marketers are unable to satisfy the strong customer needs like quality, price and convenience.

Manufacturers, Marketers of Full Cream Milk Products in Sri Lanka face numerous challenges and they can be primarily categorized into local factors and international factors.

The local factors are more to do with 'customer perception' and to make aware of the milk they consume. They are very concerned about 'the price' of what they wish to buy; and how it would help or affect 'their health' and day to day life'.

The open economy has taught the public many lessons and opened their eyes on their choices and rights as well.

It has also promoted 'private entrepreneurship' from very small scale to larger scale.

Boutiques, shops and bazaars have proliferated wherever there is community.

Now people have got used to buying their daily needs from the closest shop or boutique to their homes. Milk Food companies too have a task in 'ensuring the availability' of their brands at all levels all the time. They have a serious challenge to 'plan and utilize their resources' in a profitable manner while remaining competitive in the market place. Analyzing the situations; understanding the traders and consumer needs; comprehension of the opportunities and threats; will always give an astute marketer to continue being 'pro - active and preempt' his strategy to ensure a win - win situation for everybody involved in this operation.

The international scenario has a multitude of factors contributing; The floating price of the US Dollar have no control over, the ever increasing price of the full cream Milk Powder in the world market, the fluctuating duty component and the government taxes on imports.

Maliban Milk, have pioneered a unique project, instead of campaigning on Television. In this endeavour they reserve a contribution from the sale of every pack of milk powder to give amnesty to cows from butchery. This program is held on every Poya Day somewhere in the country.

Cash is paid to get these cows released and hand them over to families of the low income group of people having obtained the promise from them that they would look after these cows well and use the milk to start a home based dairy business.

Those who were gifted with these cows so far have all started making and trading in fresh milk, yoghurt and curd and improve their living conditions.

Until five months ago, there was only one brand available - Maliban Full Cream Milk. But now, the scenario is different. 2 brands of FCMP (Maliban and Puredale), A Junior Brand.

Maliban Milk, always keep-up to a special agenda of their own. Instead of going after the competitors; Maliban Milk goes after the consumer.

The focus is on how best the consumer can be serviced. No attempts are made on taking the competitor head on. With the result, Maliban Milk was not even considered by the big players as a potential threat to their rankings in the market.