Looming Threats for Indian Dairying

The dairy industry has been undergoing various disruptions in the recent years, driven by evolving consumer preferences, advancements in technology, concerns about environmental sustainability and animal welfare, and the ever-growing threat from the plantbased substitutes/analogues.

The rise of plant-based alternatives to the dairy industry is potentially one of the biggest threats to the dairy industry globally. As plant-based alternatives gain traction in some pockets in India as well, they strive to mimic the taste, texture, and nutritional profile of traditional dairy products. The analogue products and plant-based substitutes often misguide the consumers by positioning themselves as healthier options by emphasizing attributes such as being lactose free, lower in saturated fat or even cholesterol free.

There have been significant measures undertaken to curb the impact of analogue products, especially by IDA. The long-standing debate surrounding the use of terms like "Milk", "Butter", "Cheese", "Ghee" for the plant-based substitutes has now been converted to a full-fledged regulatory mandate from FSSAI for drawing a clear distinction in the minds of the consumer. Additionally, consumer preferences are cyclical in nature and there is still a huge opportunity for the dairy industry to regain market share by successfully reminding the consumer of the unique nutritional benefits of dairy products.

Yet another rapidly developing technology that might be a potential threat to the dairy industry is precision fermentation. It is a technology that involves the "domestication" or rather the genetic modification of microorganisms such as yeast or bacteria, to produce specific proteins or compounds through fermentation process. The idea is to recreate animal-based proteins such as casein or whey without the cow! While this technology is at a very nascent stage, still tackling issues such as scalability, regulatory acceptance, environmental implications and widespread commercialization, the promoters of the technology claim to disrupt the traditional dairy industry in the next 3-4 years.

The regulatory landscape for the technology is still developing. Genetic modification essentially raises concerns among the consumers regarding the safety, ethics and naturalness of the product. However, there is a growing and powerful lobby of promoters, trying to suppress these reservations of the consumers by falsely highlighting the "unnaturalness" of conventional dairying. What this growing industry is strategically hiding are the serious environmental issues surrounding microbial fermentation. The production of genetically modified microorganisms requires large amounts of resources like energy, water and raw materials which will definitely have ecological consequences. Additionally, the disposal of waste byproducts and the potential accidental release of engineered organisms in the environment are factors that need careful consideration. Apart from these, genetic modifications can have unintended effects on ecosystems. Despite rigorous safety assessments, unforeseen risks may emerge. For instance, an engineered organism might interact with native species, potentially disrupting natural ecosystems and ecological imbalances.

Dairying, especially in a country like India runs on the principle of production by masses, supporting more than 10 crore households and providing around the year, sustainable livelihood option. On the other hand, precision fermentation will involve proprietary strains of microorganisms and engineered processes that will ultimately lead to technology and knowledge. It will create barriers for small scale farmers, developing countries, potentially limiting innovation, competition, and equitable access to sustainable livelihood.

Amid all the external threats, dairying is prone to internal threats of chemical contamination and adulteration if not tested meticulously. Excessive use of antibiotics in livestock farming and the presence of aflatoxins in milk are two separate issues but can pose risks to the growth of dairying in India.

Known to be potent carcinogens, aflatoxins find their way into milk through different pathways such as contaminated animal feed. When cows consume feed contaminated with aflatoxins, the toxins get metabolized in their bodies and can be excreted in milk.

Similarly, excessive presence of antibiotics in milk can disrupt the natural presence of bacteria in humans, leading to reduction in beneficial bacteria and overgrowth of harmful bacteria. This can ultimately lead to the development of resistance to bacteria among exposed thus making it difficult to combat bacterial infections. Consuming such milk might also lead to severe allergic reactions among the consumers.

It is important to note that aflatoxin and antibiotic contamination can have severe consequences for public health as well as for the dairy industry at large. Overall, the economic disadvantages encompass reduced marketability of the produce, rejections of milk, ill impact on livestock health leading to lower productivity, increased expenses of regulatory compliance and overall trade disruptions. Needless to mention the loss of consumer trust and hence the reduction in demand for dairy products. Apart from the economic and health risks, chemical contamination then becomes an open landscape for analogue products to promote themselves as a better alternative.

Dairy products, especially coming from the house of big and well-known brands have a legacy of trust to uphold in India. Consumers expect these dairy products to meet certain standards of freshness, taste, nutritional values, and affordability of premium products. In the last couple of years, we have seen many ordinary consumers evolve into health conscious, informed and mindful consumers.

Nowadays, consumers diligently pay attention to food labels and ingredients and opt for foods with less amount of sugar, less unhealthy fats, less artificial preservatives, and no additives. Whenever possible, some consumers also consciously choose organic and locally sourced foods that are fresher and have a smaller carbon footprint. Amidst these evolving consumer preferences, it has been observed that dairy companies too join the race of providing Sugar-free and Protein-rich products. While it is important to develop new and contemporary products in line with the changing consumer trends, it is essential to emphasize on the nutritional benefits of traditional products, especially in dairy products. Dairy companies must refrain from promoting such offerings as a healthier alternative at the cost of harming the perception of conventional and traditional dairy products.

It is thus imperative for the dairy industry to recognize the looming threats – internal as well as external – and address the challenges with proper research, responsible and active innovation, robust regulation against analogues and effective communication with the stakeholders.