Navi Mumbai-based Prabhat Dairy, for instance, had reportedly expressed its interest in the whey business, alongside a cheese business launch three years ago. But managing director Vivek Nirmal confirmed that the company hadn’t taken on the segment. He didn’t say why.
The lack of a large cheese market, says Hyderabad-based Dodla Dairy’s managing director Sunil Reddy, is an impediment. As per industry estimates, the per capita consumption of cheese in India is a mere 200 gm as opposed to the global average of 7 kg per annum. In urban India, this consumption goes up to 700 gm with the country’s four metros (Mumbai, Delhi, Kolkata, and Chennai) consuming almost 60% of all the cheese sold in India.
Given the market for cheese itself is relatively small, making whey out of the leftover liquid doesn’t make sense in small quantities after heavy investment in machinery, says Reddy. “That is why the majority of us are not into cheese or whey. If Indian paneer (cottage cheese) moves up in sales, only then can we think of producing whey,” he adds.
Requirements of the sport nutrition
The few players already in the game, therefore, have a steady cheese business. “There is good quality milk but you need to look at how much of it is being made into cheese,” says Reddy. However, sports nutrition requires a higher grade of whey protein, which requires a standard of milk Indian dairy hasn’t optimized for.
Maheshwari remarks, “Fundamentally, what I understand is productivity here is not that great and quality of feed to cattle also affects whey production.”
HealthKart has been making finished products out of whey protein in its blending facilities in India. It’s been four to five years since HealthKart’s facilities have been up and running. Maheshwari refused to reveal the number of blending facilities.
Maheshwari admits that he hasn’t found a good source of whey protein domestically and, therefore, has stuck to importing so far.
But after a recent infusion of funds from Belgian company Sofina (to the tune of $25 million), the company is now in talks to set up a manufacturing plant, which will allow for better quality control and quicker product development.
When it comes to sports nutrition, e-commerce platforms like Amazon and Flipkart see the highest sales in imported whey-based products like Optimum Nutrition (American) and Muscletech (Canadian-Chinese). Maheshwari’s MuscleBlaze, though, figures in the top three. While Amazon did not respond to Ken’s email, Flipkart refused to participate.
Of course, with the heavy import duty, Indian manufacturers of whey-based health supplements like MuscleBlaze are stuck in a Catch-22 situation. Imports promise better quality, but there’s a possibility that they could get a lot more expensive.
Milking a duck
So far, companies like MuscleBlaze don’t have an option but to import because they can’t source whey concentrate and isolate with 80%-90% protein content anywhere in India. It just isn’t available domestically, the company claims.
Higher grade whey
When whey powder is processed further whey concentrate is obtained with 80% protein content. When it is processed even further, one gets the isolate version of the product. Isolate is the purest form with 90% protein.
It’s exactly the Catch-22 domestic dairy producers like Amul and Parag want these companies in.
When the Indian government hiked the import duty last year, these Indian dairy giants rejoiced. A hike in imports meant higher reliance on domestic players. But 40% didn’t do the trick; they’ve since demanded that the import duty be further hiked to 60%.
Following a commerce ministry meeting with 60 dairy players last month, where disallowing cheap dairy imports was discussed, Amul Chief RS Sodhi is convinced that Indian companies needn’t import at all. He further alleges that imported whey powder is being adulterated in India.
“Imported whey powder is being misused by mixing it with skimmed milk powder. Imports are cheap, that’s why it’s being imported. With 1,800-2,000 tonnes of whey production per month, Amul can single-handedly meet India’s whey requirement,” claims Sodhi. Parag’s top executives did not respond to Ken’s emails.
Domestic manufacturers are forced to sell whey cheaper than they’d like “because even if 2,000 tonnes of whey comes from outside, it impacts the prices,” says Sodhi. Amul and Parag have also launched whey-based juices that have been well-received by consumers, the companies claim.