In Moo'd for Growth: 5 Milktech Brands Spearheading Milk Delivery Segment in India

The online e-grocery market stood at US $ 3.3 billion in CY20, of which online milk delivery start-ups account for 7-8%, and expected to grow at a CAGR of 50% over the next five years.
In Moo’d for Growth: Five Milktech Brands Spearheading Milk Delivery Segment in India

One of the biggest agri-business in India, dairy has been a significant contributor to the Indian economy and this makes perfect sense since India is the largest producer of milk globally with a ~188 million MT production in 2019-2020. While this has been true for ages, what has changed now is the proliferation of private dairy enterprises that now account for more than 60 percent of dairy processing capacity in the country.

Milk has the highest frequency and the lowest margins in its category and the since the pandemic, there has been a rapid growth in the number of online milk delivery start-ups across the country. These start-ups, mostly D2C, have focused on the milk category and have later expanded and launched new SKUs to aid further growth and increase revenues.

Start-ups in the category like Country Delight, FreshToHome, Supr Daily, Sid’s Farm, etc. have registered increase in sales during the second wave of the ongoing pandemic. These start-ups are leveraging technologies like IoT and data analytics to increase production and quality of milk while also expanding the product offerings with cheese, butter, curd, ghee, etc.  
The pandemic has led to increase to customers using online route for shopping in several product categories, even the ones that were hitherto unpopular on the e-commerce channel.

Red Seer Consulting had, in one of its reports, said that the online e-grocery market stood at US$ 3.3 billion in CY20, of which online milk delivery start-ups account for 7-8 percent, and expected to grow at a CAGR of 50 percent over the next five years.

Start-ups are rightly on their foot to tap this potential market with subscription-based milk delivery facilities that claim to offer quality milk to consumers. Here are a few hyperlocal start-ups making milk delivery an easy one-click process for today’s consumers.

Country Delight

Founded in 2017, Gurugram based milk delivery start-up Country Delight operates an objective to be a natural food essentials business and to build a high-quality, affordable premium-priced, natural food essentials brand.

Today, the brand is present in almost all the metro cities of the country like Delhi, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Chandigarh, and Jaipur, etc. Country Delight received its latest round of funding worth Rs 163 crore in a Series C round led by Elevation Capital (previously SAIF Partners) in 2020 and with this round, it has raised over Rs 231 crore in total capital.

The brand has no intermediaries and sources milk and eggs directly through farmers and processes several products such as paneer, curd, ghee, bread, etc. and claims to have over five dozen stringent tests for quality assurance.

The D2C brand recently, in June, launched its latest offering – door-step coconut water delivery and promises that each coconut will have a minimum of 270 ml of water. While the communication plan for Country Delight essentially is centered around delivering natural products,

Chakradhar Gade, C-founder, Country Delight, asserted, “We typically look at 8-10 percent of the revenue on advertising spends. Currently, 60 percent is primarily skewed towards digital and then we have traditional mediums such as print and TV. TV is a medium that we have started more aggressively and gone a little higher on ATL because of the larger geographical coverage to allocate a good consumer reach.”

The brand has cut down on its ad spends during the peak of the second wave and is planning to increase the same in the next couple of months as Gade is ready to launch fruit and vegetable delivery with the app.

Sid’s Farm

Telangana-based premium D2C dairy brand Sid’s Farm was established in 2013 to offer milk and milk products that are pure, healthy, free from antibiotics, hormones and other harmful adulterants. The start-up does an average of 400-500 tests every single day to ensure that its consumer base receive only the best quality milk.

Sid’s Farm started with 20 cows at Shamshabad and is now steadily planning to expand to increase production.

Dr Kishore Indukuri, Founder and Managing Director, Sid’s Farm, maintained, “Being in constant and direct touch with customers gives instantaneous feedback on our products and helps improve our quality continuously. Business/ money collection risk is also lower as you sell to more costumer than few big businesses. Our growth plan is to hit 50,000 litres of milk and milk products sold in the next 1.5 years in Hyderabad. Along with a focused Hyderabad growth strategy, we plan to expand into other cities and towns in south India in the next few years. We believe that India is a growing market and there is space for everybody to grow. Our view is that as consumer awareness about good healthy pure milk grows, all players will stand to get benefited.”

Along with production at its own farm, Sid’s Farm works with small co-operatives of farmers around them who produce milk for the brand. The D2C start-up offers a range of products like whole cow's milk, whole buffalo's milk, skim milk, cow's butter, cow’s ghee, buffalo’s butter, buffalo’s ghee, cow’s curd, buffalo’s curd, and paneer.

Sid’s Farm has plans to raise capital of up to Rs 25 crore by the end of this year, which will be used to fund its new product development and its expansion plans to other cities in India.

Sarda Dairy

Nashik-based Sarda Dairy was launched by Shrirang Sarda in 2013 with an objective to give consumers the old-world experience of getting fresh milk delivered at their doorsteps. Shrirang Sarda bred a herd of 1,300 Holstein cows on his sprawling 11-acre farm in the outskirts of Nashik and imported the sperms of Holstein bulls from Holland to inject the herd.

The Sarda Dairy milk farm is completely mechanized and the whole process from milking the cows to aggregation and the packaging is automated. The brand delivers the milk directly to the consumer’s home from the farm without the involvement of any intermediaries.

Sarda Dairy recently expanded its portfolio with the launch of Vachan Farm Classics Cow Milk. The Vachan brand of milk and dairy products is currently available in more than 74 cities in the country across 10 states.

“The launch of Vachan Farm Classics Cow Milk in Mumbai marks yet another milestone in our efforts to offer discerning customers a superior, high-quality product that is pure, healthy, and superior in taste. Our best-in-class international dairy farm practices along with state-of-the-art European milking and processing technology ensures a highly hygienic ‘untouched by hands’ milking process that together with our 7 layered UHT packaging ensures zero contamination, and retains the purity of the milk. This packaging enables easy storage since it doesn’t require refrigeration and comes with a 90 days shelf life. Through this launch, we are looking at further expanding our product portfolio in the Mumbai market and give customers access to a healthy, nutritious product,” maintained Pankaj Sarda, Joint Managing Director, Sarda Group, said.

The company also has ‘Milk Councillors’ who talk to consumers on a regular basis not only for product awareness and feedback but also for insight mining.

MilkLane

MilkLane was conceptualised as India’s first industrial-scale collection and distribution platform for high quality milk, with an idea of bringing world-class quality and superior milk products to Indian homes. The start-up focuses on collecting consistent quality milk, which is safe from toxins and antibiotics with no adulterants and preservatives.

The milk brand takes pride in educating its farmer partners about good animal husbandry practices. MilkLane procures its own milk and processes it in its own plant. The high-quality milk, available in packaging of 500 ml priced at Rs 35, is processed with UHT technology to provide a 90-day non-refrigerated shelf-life. The process preserves the nutrients in the milk, which is then packaged in pre-sterilized packs.

MilkLane had raised Rs 27 crore in 2017 in a pre-Series-A round from a clutch of investors, which it utilized to increase its network of milk collection centers and strengthen its digital and analytics capabilities in the supply chain.

During the lockdown last year, the dairy start-up started home delivery of its products in Bengaluru.

Gaurav Haran, CEO, MilkLane, had said, "It’s​ the right time to reach out directly when consumers are not able to buy dairy products due to the lockdown. We have started this service to help people avoid the risk of stepping out while still availing themselves of best quality products that maintain the highest hygiene regulations."​

The start-up has unveiled a range of digital initiatives under the umbrella of ‘extension services’ in the last year.

Milk Magic

Milk Magic was born out of necessity during the Covid induced lockdown in 2020. Kishan Modi’s B2B exports company Jayshri Gayatri Food Products Pvt. Ltd. (JGFP) came to a standstill during the nationwide lockdown and this made him enter into B2C segment with Milk Magic in late 2020.

The brand works on a simple vision – retailing export quality value-added dairy products in the Indian market.

“Customers loved our competitively-priced dairy products as they were of superior and international quality. We received many repeat orders. Moreover, due to the health concerns created by the COVID-19 pandemic, consumers preferred packaged dairy products over loose and unbranded products. They were open to trying easily accessible and hygienic local brands, and this worked well in our favor. As restrictions eased and inter-state movements of goods resumed, we expanded Milk Magic to Bihar, Chhattisgarh, Rajasthan, Odisha, and Telangana,” asserted Kishan Modi, Managing Director, JGFP.

The brand plans to soon enter Karnataka, Tamil Nadu, and Kerala, and will later expand into Maharashtra, Gujarat, Punjab, etc.

JGFP’s resilience comes from its manufacturing setup at Sehore, Madhya Pradesh which processes four lakh litres of milk per day to produce 25 metric tonnes of paneer, 30 tonnes of butter, 20 tonnes of cheese, 30 tonnes of skimmed milk powder, and 15 tonnes of whey powder daily.

An additional manufacturing facility is being developed adjacent to the existing plant, which will more than double JGF’s production capacity and will be operational by the end of 2021. The brand registered an annual turnover of over Rs 384 crore in FY2019-20, with a 95 percent growth over the previous year.

 

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