Erode-based dairy company sees strong demand for branded paneer as consumers shift away from unorganised and analogue products
Chennai: Paneer has emerged as the key growth driver for Milky Mist Dairy Food Ltd as the recently listed dairy company enters a new phase of expansion. The Erode-based company sees significant potential in the paneer category as consumers increasingly move from loose and unbranded products towards packaged dairy offerings.
The opportunity could expand further as food-safety authorities increase scrutiny of analogue paneer, which is produced using vegetable fats instead of milk fat. Milky Mist expects this shift to encourage consumers to choose branded and standardised paneer products.
Paneer remains Milky Mist’s growth engine
Milky Mist CEO K Rathnam said paneer would continue to be the company’s “star product”. The company currently has the capacity to produce around 150 tonnes of paneer per day, which it describes as the largest paneer manufacturing capacity under one roof in India.
However, the company is operating its paneer capacity at only around 50%-60% utilisation, leaving considerable scope to increase production without immediately investing in additional capacity.
The company estimates that approximately 90%-94% of India’s paneer production remains in the unorganised sector, while organised players account for only around 6%-7%. Milky Mist currently holds an estimated 20% share of the organised paneer market.
Large market offers substantial headroom
India’s overall paneer market is estimated at approximately ₹97,500 crore, although the organised segment represents only about 5% of the total market.
The paneer category is growing at around 20% annually, while the transition away from analogue paneer could potentially push volume growth towards 25%.
Milky Mist is significantly outperforming the broader category. Its paneer volumes are growing at approximately 34%, highlighting the company’s ability to capture market share as organised dairy consumption expands.
| Key Milky Mist & Paneer Indicators | Estimate |
|---|---|
| Daily paneer production capacity | 150 tonnes |
| Current capacity utilisation | 50%-60% |
| Unorganised paneer sector | 90%-94% |
| Organised paneer sector | 6%-7% |
| Milky Mist organised market share | ~20% |
| Overall paneer market | ~₹97,500 crore |
| Paneer market growth | ~20% annually |
| Milky Mist paneer volume growth | ~34% |
Protein consumption supports value-added dairy
Growing consumer interest in protein-rich foods is providing an additional boost to paneer demand. Milky Mist estimates that India’s value-added dairy market is expanding at around 15%-18%, while its own value growth is significantly higher at approximately 35%-38%.
Beyond paneer, the company sees opportunities in categories including yoghurt and ice cream as consumers increasingly demand convenient and value-added dairy products.
Strong financial performance
Milky Mist reported a substantial improvement in profitability during the first quarter of FY27. Net profit increased to ₹65 crore, compared with ₹7 crore in the corresponding quarter a year earlier.
Revenue rose 44% year-on-year to ₹973 crore, compared with ₹678 crore in the year-ago period.
The company expects to maintain growth of more than 30%, supported by increased capacity utilisation, expansion into new geographies, deeper penetration in existing markets and an improved product mix.
Expansion beyond Tamil Nadu and Karnataka
Milky Mist has built a strong presence in Tamil Nadu and Karnataka, supported by brand recognition and a broad product portfolio.
Its offerings include paneer, cheese, curd, ghee, ice cream, yoghurt, sweets and condensed milk. The company is now expanding into additional Indian markets as it seeks to strengthen its national footprint.
According to industry estimates, liquid milk represents approximately 65% of India’s ₹21,318 billion dairy market. Paneer accounts for around 4.6%, while yoghurt, ghee and ice cream contribute approximately 7%, 8% and 2.5%, respectively.
With India’s dairy sector gradually moving towards greater value addition and branded consumption, Milky Mist’s strong position in paneer could provide a significant growth opportunity. Rising protein consumption, greater food-safety awareness and the formalisation of the dairy market could further accelerate the shift towards organised paneer and other value-added dairy products.
