Sustainable development of the dairy segment through ethical sourcing and putting out a quality end product is Milk Mantra’s secret to success

S. MEERA

Bhubaneshwar-based Milk Mantra supplies milk products to urban cities while trying to make a sustained impact on the rural ecosystem in Odisha through its ‘Ethical Milk Sourcing’ programme. The firm has 30,000 network farmers to whom it provides a robust supply chain to support the growth of the brand and improve dairy development in the state. “We have also tied up with key financial institutions, most recently with SBI, to make cattle loans available to farmers,” says Srikumar Misra, Founder, MD and CEO.

In June 2014, Milk Mantra raised its Series C funding of Rs 80 crore from Fidelity Growth Partners India and Aavishkaar and has used this to fuel its growth plans. It has acquired a new dairy company in western Odisha enhancing its processing and sourcing capacity to reach a wider market not only in western Odisha but also into Chhattisgarh.

The company is further investing in tripling the capacity of its existing plant at Gop (in Odisha) where it has already reached 80 per cent utilisation. Milk Mantra also plans to add a product to its existing product lines of pasteurised milk, yoghurt, probiotic yoghurt, buttermilk and paneer with the launch of a functional milkshake on a pan-India basis.

Growing ahead

In October 2011, the company aggregated 50,000 litres of milk daily and was targeting cities such as Bhubaneswar, Jamshedpur and possibly, Kolkata. Since then it has doubled its top line every year and has reached an equivalent volume of 70,000 litres per day. “The Milky Moo brand has been liked by consumers across central and coastal Odisha where we have been concentrating our efforts. With our recent acquisition and foray into western Odisha, we expect a similar response to the Milky Moo range of products,” explains Misra. The value added products in Milk Mantra’s offering have been growing as consistently and with 30,000 farmers in its network, Misra believes that the company has a robust supply chain to support the growth of the brand. “We have more than 500 people engaged in various capacities at Milk Mantra,” he adds commenting on the team strength, which has grown from 60 in 2011 to 500 currently.

Milk Mantra had plans to set up a plant in Kolkata. But Misra explains that the company services Kolkata Modern Trade accounts with its value added products from the Gop plant. “With our recent acquisition we have a second plant at Sambalpur (the company acquired Westernland Dairy Pvt Ltd for about Rs. 10 crore) and we are augmenting capacity at our existing plant as well. So setting up processing infrastructure in Kolkata has gotten deferred but it remains on our agenda to explore seriously within the next two years and evaluate both greenfield and acquisition opportunities,” he adds.

Mixing it up

Milk Mantra has two product platforms – fresh dairy under the Milky Moo brand which houses Truly Pure Milk, Probiotic Dahi (yoghurt), Pouch Dahi, Lassi, Buttermilk and are soon to launch Meethi Mishti Dahi.

In the second platform, a milkshake with long shelf life that the company has been developing with experts over the last two years will be launched pan-India.

Apart from sourcing right, packaging innovation is a cornerstone of Milk Mantra’s product strategy, targeted at preserving purity and freshness, thus increasing shelf life. Tripak packaging with three layers to protect milk from light damage is one such innovation. “It is interesting to note that one of the largest global dairy companies, Fonterra, in their development centre came up with exactly the same packaging concept for their fresh milk only in a bottle form and this was last year,” points out Misra.

For Milky Moo Paneer, the company brought in a German packaging line, which allows it to have a shelf life of 21 days. It has also launched eastern India’s first Probiotic Dahi in sleeved cups.

Reaching out

According to Misra, the organised dairy category in India is nearly Rs. 10 billion dollars and projected to double in the next five years. “There are certain product categories which are exploding and we are actively looking at participating in some of these which have a meaningful and relevant sync with our company’s product vision,” he explains.

There are very few players across Eastern India that have a fully integrated supply chain from the farmer to the consumer. “In fact, in Odisha, we are the only private dairy company to have direct farmer linkages via our Ethical Milk Sourcing Programme,” adds Misra.

The high level of unorganised play presents both an opportunity and challenge to the company which believes in having the right business model and ethical practices in place to build a reputable brand.

One of the pressing challenges for the company is dealing with the unorganised distribution channels. Milk Mantra had to develop regular grocery stores to have the capacity to sell fresh dairy products and this is an ongoing task.

“As far as value added products are concerned we compete with all the major national players as most of them have their value added products present in some of the markets we operate in,” points out Misra. When it comes to fresh milk, however, he believes there isn’t any competition because of a new category of a mass premium high quality fresh pasteurised milk it has created which has a strong brand connect with children and adults.

Misra describes Milk Mantra’s marketing strategy as that of a challenger with a focus on building the Truly Pure platform and launching periodic strategic campaigns to support or strengthen it. “These campaigns are also supported by point of sale branding/promotions which connect the consumer to the proposition,” he explains and adds that their challenger proposition of ‘No More Boiling’ found significant consumer resonance. Similarly each of the company’s other products are based on certain single minded functional propositions.

The company is also constantly enhancing its campaigns on digital and social media, to drive more engagement.

Leading up to the numbers a Rs. 500 crore top line is the next milestone for Milk Mantra. “A single minded focus on getting the best quality products to our consumers and leveraging functionality, building a great team and continuously strengthening the team to execute our vision and strategy; these are the three focus areas to achieve this goal,” signs off Misra.