How This Motilal Oswal Backed 'Ice Cream' Venture Is Reaching New Heights?

Founded in 2002, Dairy Day is one of the leading brands in South India with extensive presence in Karnataka and Tamil Nadu. Dairy Day manufactures and supplies approximately 150 products in over 30 flavours. The Range of products include a variety of cups, cones, sticks, tubs and other novelties. Promoted by M N Jaganath, A Balaraju and their colleagues, the company has two state-of- the-art manufacturing units in Karnataka, spread over 2 lakh square feet with production capacity of 1.4 lakh litres per day.

Dairy Day’s manufacturing facilities are ISO compliant (ISO-22000- 2005 (FSMS)). The facilities are supervised every day by an expert team of Dairy Technologists, Food Technologists and Microbiologists. Dairy Day is available across most of the cities and towns in South India and Maharashtra and supplies its products through a network of more than 30000 retailers.

Tell us about your business model? Also, shed light on your distribution model.

I along with one more technical director, we began our journey in 2002 in a very small way, where our main focus was to build a retail brand. Primarily, ice-cream retailing happens on two models, one is called ‘parlor’, brands which operates in such manner includes Baskin and Robins, Movenpick, Natural amongst others, and the latter model is ‘retail’, Amul, Kwality Walls amongst others operates on retail model. We also operate on latter model.

As we grew we were keen on expanding our manufacturing capability and workforce. Owing to our unique business model many key people from different departments including production, sales and marketing eventually became our stake holders. Therefore, it helped us become a big brand in a very short span of time.

Today, our turnover is crossed 300 cr and more than 700 employees are working with us. Our distribution network is comprised of more than 30,000 retail outlets including general trade and modern trade.

Over the last one decade, we have managed to position ourselves among the top 10 ice-cream brands in India. As of now we are very strong player in Karnataka and Tamil Nadu and recently we have forayed into Maharashtra and Andhra.

Do you also operate on franchise model? If yes, what is the share of company exclusive and franchise outlets?

We don’t have any full- fledged franchise model in place. As the part of the agreement, we provide our channel partners ice cream storage refrigerator free of cost. Contrary to leading dairy brands, we only operate in the ice cream space which is the mass market product. Therefore, we do not intend to grow our exclusive distribution either via exclusive stores or franchised stores. 

Going forward, you would continue to remain focused on ice cream category? What are the plans for category expansion?

We will continue to focus on pre- packed ice cream under the brand Dairy Day. There is no plan to introduce any new category as of now.

Have you raised any sort of funds so far?

We started our journey with our personal savings only. However, Motilal Oswal has invested in our business three years back for the minority stake. They have invested $ 15 million in Dairy Day. From this fund, we have invested 50-60 cr for retail freezer that we provide to each shop and  for factory sales expansion.  We intend to increase our production capacity to 1 lakh lt. per day in the time to come.

What are the plans for online expansion of brand?

We are a FMCG kind of product. We rather find our relevance in modern trade outlets. We have tied-up with online food delivery aggregators such as Zomato and Swiggy. We are also there at bigbasket, but we will not grow this channel exclusively.

What is your starting price point? What is your strategy to compete with premium brands such as London Dairy, Magnum amongst others?

Our price point starts from Rs10. We will continue to dominate the value space.