India’s New Age Milkman Essay
From heading merger and acquisition deals for Tetley, Tata Group owned tea beverage company, in London to sourcing milk from farmers in Odisha’s rural areas, Srikumar Misra’s switch to entrepreneurship can give a culture shock to many. However, the start-up seed called Milk Mantra, that makes dairy products, that he sowed in 2009, is reaping him great returns. Misra shares his journey’s insights with Entrepreneur.
Milk Mantra has brought a 360° role reversal for you. How does this happen?
I spent around eight years in tea market. While I was working as the director for merger and acquisitions at the Tata Group owned tea brand Tetley, which it acquired in 2000, the growth of the global consumer packaged foods market intrigued me. I realized how much the Indian market is lagging behind. However, when I explored the market, dairy segment with $50 billion market size stood out, which meant that it offered huge scaling up opportunity by makng exciting and engaging dairy products. In 2009, the organized dairy market was just $5 billion. I launched Milk Mantra during this time. I also looked at grocery and functional beverages (non-alcoholic) market. The latter was very limited in scale, while the grocery retailing had too many operational challenges.
In the dairy sector, there is not much of innovation you can think of. So what’s your unique selling proposition?
Absolutely. But while researching the market I found out there was a huge trust issue among people regarding the quality of the milk they are drinking. Also there was always the question of convenience, as milk always had to be boiled first. So as we thought of producing a high quality product, which the consumers can drink directly from the packet. We focused more on packaging. Usually, milk spoils due to exposure to wrong temperature and heavy light, which accelerates bacterial growth inside it. So we developed pouches using tri-pak packaging film that has a black inner layer. It prevents milk from getting exposed to light and maintains right temperature. The shelf life of our product is 4 days.
It seems there is a particular reason you chose Odisha to launch Milk Mantra.
Yes. Developing a milk sourcing network was an easier option in the eastern part of the country. On an average nationally, more than 25 per cent of dairy farmers’ produces was sold through organized networks. Looking specifically at dairy producing states like Andhra Pradesh, Maharashtra and Gujarat, the figure was as high as 40 per cent. While in Odisha it was less than 10 per cent, as most farmers were not connected to any organized sourcing network. So we thought of building a structured network which would impact them equally.
Has energy drinks impacted milk market in any way?
Actually the reverse is happening now. The cosumers are now aware of the significant health issues related to consumption of these so-calld enrgy drinks, including juices that contains high amount of sugar. They realized ready-to-drink milk is the right alternative. This change in habit, led us to launch our functional health milkshake brand MooShake. To make it even healthier we looked at various other ingredients. Since turmeric has always been a favorite, we added curcumin (an extract of turmeric) to our milkshakes. With this, we became India’s first milkshake brand with curcumin and it is now easier to communicate with the customers.
How did you market the product initially?
When we started with Bhubaneswar in 2012, milk was sold only through government cooperative milk booths, not even retail stores. So our milkshake delivery boys went for door-to-door to sell the product. The boys ended up selling around 1,000 milk packets everyday. This created buzz in the city. Following this, retail shops started stocking our product. From household delivery to retailers and then to appointing distributors, it was a reverse sales approach.
What key hurdles you came across setting up Milk Mantra?
Setting up a sales and distribution network, since milk is a perishable product, was challenging. Secondly, selling it at small shops was also difficult, as there was lack of organized retail. Also it took time to develop the entire sourcing network. Attracting investors was also tough as it is a capital intensive business. It took us 18-20 months to raise our fund.
Apart from traditional players, you now have products like VIO and Saboro from corporates like Coca-Cola and Mahindra respectively. Any particular strategy you have for them?
As a part of our continuous product innovation, we came up with new products, like pro-biotic curd. We targeted hotels, restaurants, and cafes to promote our product. Now we are looking at expanding in the Eastern India, across Odisha, Chhattisgarh, Jharkhand and West Bengal. However, we are targeting the national market to sell Moo Shake. We have already launched it in Bengaluru and Hyderabad. Next year it will be available in the northern states, particularly Delhi NCR region.
(This article first appeared in the Indian edition of Entrepreneur magazine (October 2016 Issue).
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