Do you remember the time when milkman used to deliver dairy fresh milk right to your doorstep? Well, those were days when most of the milk distribution was done via a local dairy farm or creamery, and we knew exactly where our milk came from and sometimes, we even knew the name of the cow, who provided our milk....
This concept may sound alien to you now because until recently we are supposed to hop nearby shops early morning to procure the milk packet before it gets out of stock. With changing time milk is also finding newer distribution channels and online is the latest one. Online milk distribution is becoming extremely popular, and become the hot favorite of many venture capital companies. There many milk start-ups such as Doodhwala, Supr Daily, MrNeeds amongst others have raised funds from various equity players. Moreover, e-commerce giants such as Amazon and Flipkart have shown aggressive plans to scale up their grocery businesses. With each passing day this market is evolving. Let’s shed on the journey of few…
One late night, in 2014, in Bangalore, Aakash and Ebrahim were working on a different business project- working and munching on cereal with milk. They went to get another serving of cereal and realized that they were out of milk. And those were the days in Bangalore you would have an app for everything –food, laundry, dating, marriage, personal errands, groceries, but there was nothing specifically for milk.It was that moment – why isn’t there an app for milk? They stayed up that night fuelled not by cereal, but rather an idea.
Around 4am they went around the city to understand what the milk supply market was like. After weeks of research and surveys, they launched a beta version to test the market. They received a promising response, and were convinced that people not just wanted, but needed Doodhwala. Recently, this Bangalore strat-up has raised an undisclosed amount in pre-Series A funding from Tom Varkey, a partner at US-based hedge fund Stonehill Capital.
Highlighting the journey, Aakash and Ebrahim, informed, “People were looking for better ways to find milk, they were looking for good quality unadulterated farm milk, they were looking for an organized hassle free way to get milk, they were looking for a doodhwala they could speak to rather than just a regular milkman whom you have to keep calling. They, in a nutshell, wanted a punctual, cost effective, and a non-traditional option. This was one of the biggest learning we had right at the beginning. This laid the foundation of Doodhwala.”
woohoo doodh is a pure, cow milk brand with a promise to home deliver within 24 hours of milking with 0% preservatives, chemicals, antibiotics or hormones. Speaking on the potential of online milk delivery, Salil Goyal, Head of Business Development, Happy Beverages and Foods Pvt. Ltd(woohoo doodh), said, “We believe that there is a huge opportunity for (farm to home) fresh milk space to grow in India in the coming years. After thorough research of the dairy ecosystem we found out that in India more 60% milk is adulterated. There is now a discerning consumer who is willing to pay for good quality milk and hence has created a new space of fresh, pure milk in dairy.”
Presently, the company serves serve 1500 + families, 5 corporates, 1 school and a 5 star standalone restaurant. Also, Woohoo doodh has an investing partner and got seed funding done by MrSujit Jain, founder of Netsurf Network.
Major challenges for online milk distributors
Last mile delivery is a challenging task for any online players. Even companies like Big Basket, Flipkart or Amazon are working on solving the last mile complexity. Speaking on same, Aakash and Ebrahim, said, “ Every company doing last mile delivery faces challenges when dealing with fresh perishables. The last-mile delivery represents the movement of goods from the hub to the final destination (customer). As an antidote to these challenges Doodhwala’s rapid innovation and evolving technology helps in optimizing our supply chain to keep up with our customer expectations and finding that sweet spot.”Currently, the company has 7000 milk subscribes in Bangalore in under 2 years, along with a rapidly growing customer base in Pune.
Speaking on same, Gaurav Haran, Chief Operating Officer, MilkLane, said," Online retailing of dairy products provides brands an alternate channel with a more targeted reach and reduced cost due to the elimination of many intermediaries between manufacturers and the retailer. It allows tapping of pre-existing subscribers and access to accurate data which can elevate marketing efforts while creating a national footprint in terms of reach. For dairy brands, it can also be a platform for consumer engagement on the sustained basis. For new and upcoming brands it could provide the opportunity to display their full range of products overcoming the limitation of shelf space availability at physical retailers. Other than providing convenience to the consumers, brands are able to reach where they don’t have a physical presence."
Going further Haran adds," online dairy shopping in India is still in its early phase, as majority still prefer the traditional way of buying fresh dairy products from nearby physical retail outlets. Hence, dairy brands could follow the hybrid model of leveraging both channels of milk distribution ensuring that they reach the consumers through all possible routes. Let time be the best judge for online retailing of dairy products”. During the December 2017 MilkLane has raised Rs 27 crore in a 'pre-Series A' funding round from a clutch of investors.
Clearly, milk delivery business is already a profitable business. So adding the term online is just an enabler, this industry is bound to grow in the time to come.