Dairy industry in India is not for the milksops. It is a tough market that has baffled even biggies like France’s Danone, which shut shop after seven years, and New Zealand’s Fonterra, which exited a JV after a similar period. The biggest challenge has been the highly fragmented supply of milk; on an average, a dairy farmer here owns maybe two cows or buffaloes (a fraction of what a US farmer owns at 200-plus). Imagine a stickler for processes, like an MNC, organising this crowd (like a maitre d’hotel trying to manage a rowdy pub). It’s not pleasant. Perhaps, young companies with a flexible approach and powered by technology can do better.
After all, the dairy market is growing at a healthy pace. According to a latest IMARC Group report, titled Dairy Industry in India 2020, it is predicted to grow at 16% CAGR between 2020 and 2025, from Rs. 10.527 trillion to Rs.25.491 trillion.
Enter milktech start-ups. First came those that manage supply chains and act as marketplaces, such as Daily Ninja and Supr Daily, but they struggled on their own and were finally acquired by BigBasket and Swiggy. Now there is the second wave of start-ups, ones that have a deeper engagement with the market. They are selling not others’ but their own milk brands in a farm-to-home model (sourcing from the farmer and delivering at the buyer’s doorstep). The three big ones — Akshayakalpa, Country Delight and NutriMoo — sell premium milk to discerning urban buyers.
By having a larger control over the product, such start-ups offer the buyer transparency, convenience and affordability, the three growth drivers to build consumption at scale, according to