The Indian Dairy CEO’s Dilemma: Balancing Sustainability, Talent, and Growth

While preparing notes to moderate a CEO roundtable session for an upcoming program at 51^st Dairy Industry conference at Patna, I came across an insightful global survey that annually assesses the priorities of dairy industry leaders. Conducted by McKinsey & Company in collaboration with the International Dairy Foods Association (IDFA), this research provides a clear roadmap of how top executives navigate evolving industry challenges and opportunities.

Survey Findings

The latest survey reveals that sustainability has become a central priority, with nearly 75% of executives highlighting customer expectations as the driving force behind their initiatives. However, concerns persist about whether consumers are willing to pay a premium for sustainable products.

Another major focus area is talent development and retention, with 60% of CEOs emphasizing the need for competitive compensation, a strong organizational culture, and technological advancements to attract and retain skilled professionals.

Growth remains a key ambition, with leaders eyeing expansion into new markets, categories, and geographies. Innovation in product nutrition is also a major source of optimism, reinforcing the industry's resilience and potential.

However, addressing emissions—particularly at the farm level—remains a pressing challenge. While efforts have successfully reduced the carbon intensity of dairy products, overall greenhouse gas emissions continue to rise due to increased production volumes.

For Indian dairy leaders, these global insights offer actionable takeaways.

Relevance for Indian Dairy CEOs

I wonder if conducting the same survey in India would reveal similar priorities among Indian dairy leaders as their global counterparts. Let’s examine the current landscape and the key concerns of CEOs leading large and successful dairy businesses in India.

Sustainability as a Competitive Edge

In India, consumer expectations are increasingly shaped by unregulated social media narratives, particularly those questioning the consumption of milk and dairy products. With unrestricted access to content—often biased against dairy—consumers are left uncertain about their choices. Many follow the principle: “When in doubt, toss it out.” This hesitation has fueled the rapid growth of plant-based alternatives and dairy analogues, posing a significant challenge to the industry.

For me, as a CEO, sustainability is not just about environmental responsibility—it is about ensuring consistent quality and food safety. Consumers today prioritize safe, reliable nutrition over sustainability rhetoric. While I fully support eco-friendly initiatives that enhance brand reputation and align with evolving expectations, the foremost priority remains delivering safe, high-quality dairy products that consumers trust.

Investing in People: Addressing Workforce Challenges

Historically, India's competitive advantage lay in cost-effective labor, as highlighted by Michael Porter. However, the landscape is shifting. Government welfare programs and state-sponsored incentives have triggered reverse migration, making labor stability a growing concern. At the same time, securing top-tier talent has become a costly battle, with investor-led businesses aggressively poaching skilled professionals. The fresh food industry now operates under a new mandate—cash burn—where businesses outbid each other to attract the best talent, escalating operational costs.

To navigate this challenge, automation and multiskilling at all levels must become non-negotiable priorities. Additionally, workforce retention through improved compensation, a stronger work culture, and better technology adoption will be crucial for long-term success. In an era of rising labor costs, investing in efficiency and skill development is the only sustainable path forward.

Driving Growth through Innovation

Innovation is the cornerstone of growth in India's evolving dairy sector. Leading players are already exploring new product categories, emphasizing protein-rich dairy, probiotics, lactose-free options, and functional foods. Cooperatives like Amul are heavily investing in protein innovation, while private players like Hatsun have expanded strategically through acquisitions, such as Milk Mantra in Eastern India.

However, these innovations primarily cater to niche and super-niche segments, limiting their immediate impact. Demand for such products is largely driven by modern trade, e-commerce, and quick-commerce (Q-commerce)—channels that come with high distribution costs, making affordability a major barrier to widespread adoption. For today’s CEO, the real challenge is not just product diversification, but ensuring affordable innovation that resonates with the broader Indian consumer base. Affordability will be the new growth mantra.

Proactive Emission Management: A Policy-Driven Imperative

Environmental concerns surrounding dairy emissions cannot be ignored, but in the Indian context, livestock itself is not recognized as a formal stakeholder in the dairy ecosystem. With highly fragmented milk production—dominated by small and marginal farmers—there is little direct control over emissions at the producer level. Except for a few states where cooperatives have a stronghold, most farmers lack any structured representation in the industry’s sustainability agenda.

Emission reduction is fundamentally linked to farmer education and improved livestock genetics—two areas beyond the immediate influence of dairy CEOs. Given India’s vast cattle population, emission control must be driven by government-led policies and pragmatic programs. However, unlike in Western economies, there has been no explicit government acknowledgment of dairy-related emissions. Instead, policies like BIOE3—which promotes lab-made food, including synthetic milk—seem to be positioned as an alternative to conventional dairy under the guise of sustainability. If not addressed strategically, such initiatives could jeopardize India’s global trade aspirations and reshape the future of the dairy industry.

By aligning with these global trends, Indian dairy CEOs can future-proof their businesses and drive the sector towards a more resilient, sustainable, and growth-oriented future.

These are just my thoughts but I ensure you much more enriching and insightful CEO panel at 4.30 PM on March 6^th at 51^st Dairy Industry Conference  at Samrat Ashok Convention Center at Patna.

Looking forward to welcoming you all at 51^st DIC 2025.