Why Indian dairy companies are betting big on cheese despite low consumption

Until a few years ago, many Indian dairy companies treated the liquid left behind after making cheese as something to be disposed of. Today, that same byproduct is helping justify complex investments in what has traditionally been a difficult business.

Cheese requires heavy capital, ties up money in inventory, and serves a relatively small market. Yet India’s top dairy companies, including Amul, Parag Milk Foods, Milky Mist, Nandini, Dodla Dairy, and Heritage Foods, are sharply expanding cheese capacity. This, despite the country’s per capita cheese consumption remaining tiny by global standards—just 200 grams, compared with 17.4 kg in the US. 

The explanation lies partly outside the block of cheese.