It is a common practice in households across the country to boil packed milk before usage. However, this is a routine that Milk Mantra Dairy Pvt. Ltd. (Milk Mantra) hopes to break – at least one household at a time in Odisha – with the promise of delivering fresh pasteurised milk. Initiated in late 2009, the dairy processing company is based in Bhubaneswar and has started rolling its first line of products, milk and fresh paneer (cottage cheese), in the month of October under the label ‘Milky Moo’.  While setting up, raising capital and acquiring land were challenges. It took the company a year to finish all the formalities to set up an industrial unit.

“There is a great opportunity in the dairy sector in terms of the scalability of the business.”

Milk Mantra is an effort to make a sustainable impact in the organised dairy sector and in the livelihood of farmers. The company aims to offer innovative milk products with a specific focus on the needs of the urban customer. “There is a great opportunity in the dairy sector in terms of the scalability of the business,” says 34-year-old Srikumar Misra, founder, managing director and CEO of Milk Mantra.  “The organised sector (nationalised and private players) forms only 10 per cent of the market, making up only about US $ 4 billion of the US $ 30 – 40 billion dairy market. And this share is projected to double in the coming decade,” shares Misra.

P Pradeep, chief investment officer of Aavishkaar Venture Management Services (Aavishkaar), an investor in the company, says, “With the government and mostly the unorganised sector operating in this space, there is a significant gap present in the availability and quality of milk required, which we think a company like Milk Mantra can fix.”

The company has raised US $ 5 million from angel investors such as Mumbai Angels and others from India and U.K, with a major share of it (approximately US $ 0.80 million to US $ 1 million) coming from Aavishkaar, and through debt funding from IDBI Bank. Much of this investment has gone into getting its plant up and running.

Targeting the right market

There is a good scope to introduce a range of premium and high-quality product, says Misra.  With a capacity to process 50,000 litres of milk daily, the company is targeting cities in east India such as Bhubaneswar, Kolkata and Jamshedpur. “There are already numerous players competing in Tier – I cities. In cities like Bhubaneswar, the potential is still untapped and it is a fast growing market,” says Misra.

Pradeep adds that the company’s biggest challenge is the area in which they operate. He says, “In east India, there are few players who are active which makes it a difficult area to work in. But this is also where an opportunity lies.”

Milk Mantra has to sell about 30,000 litres every day to break even but in the beginning, Misra says, about one-tenth of the capacity will be sold before the numbers slowly increase. An event-based marketing, a dedicated sales team and word-of-mouth campaigning in places like residential complexes make sure the company gains visibility.

It offers direct-to-home service to its customers. It assures that the fresh milk does not require boiling and the paneer would have a shelf life of up to 25 days.

Cracking the supply chain

Managing the resources on the ground and correcting the inefficiencies in the cold chain were some of the biggest challenges the company had to face. Misra admits that it took time and legwork to convince farmers to tie-up with them.  In fact, Aavishkaar was convinced about Milk Mantra’s inclusive agenda that would benefit the farmers, who provide the milk.

“We’ve an ethical milk sourcing programme which offers complete pricing and payment transparency,” shares Mishra. Only after checking the quality of milk and the farmers’ satisfaction with the price, is the transaction recorded and a receipt given.  Though at the moment, this process is done manually, Misra has partnered with a mobile technology company to simplify the process, the pilot phase of which is in progress.

The next challenge of maintaining a reliable cold chain cropped up. And this is where Sweden-based DeLaval (of the Tetra Laval Group that owns Tetra Pak) stepped in. DeLaval has provided Milk Mantra with seven bulk milk coolers that are placed in the villages dotting the Puri district. The coolers help store the milk at an optimum temperature until it is ready to be transported once every day to the plant. In another 10 months, Misra hopes to have 25 coolers on ground.

Misra says that choosing to set up the plant at a rural location like Gop in Puri (where its small dairy processing unit is located) adds to the whole supply chain efficiency by reducing the transportation time and keeping the milk fresher. At the plant, the milk is processed and packaged. The fresh milk is protected by a three-layer laminate with a black layer in the middle to protect the milk from damage due to light exposure, while the paneer is packaged with the technology provided by Germany-based Multivac. These packaged products are then sent to homes and retail stores.

Seizing an opportunity

This is not Misra’s first tryst in working with food brands. He had earlier worked with the Tata Group managing Tetley’s global business division in opening up the company to several emerging markets and later worked as the director of mergers and acquisitions. This experience proved valuable to Misra when he decided to set up Milk Mantra. Incubating at his alma mater, The Xavier Institute of Management, Bhubaneswar greatly helped the company in getting resources. “The backend support and the college community worked well for us,” adds Misra.

He partnered with his brother-in-law, Ashit Mahapatra, whose experience of having worked with micro-finance institutions and his understanding of rural network helped in developing the backend sourcing. With about 60 team members, Misra admits that there is competition from the local players, but he hopes that constant innovation, more number of products and advanced packaging techniques will work in Milk Mantra’s favour. From its side, Aavishkaar, apart from offering advisory support, also hopes to help bring in more rounds of funding through its network in the future.

Milk Mantra plans to introduce functional health drinks containing active ingredients in the next two years. “There is a shortage of dairy products in eastern India. We have definite plans to go big,” he states. Expanding the current plant’s capacity and setting up another one in Kolkata is on the blueprint as well in the next two years. And so is the plan to expand its network to other cities like Hyderabad, Bengaluru and Gurgaon. “We hope to be a leading dairy company in the next two years,” he concludes.

It is a common practice in households across the country to boil packed milk before usage. However, this is a routine that Milk Mantra Dairy Pvt. Ltd. (Milk Mantra) hopes to break – at least one household at a time in Odisha – with the promise of delivering fresh pasteurised milk. Initiated in late 2009, the dairy processing company is based in Bhubaneswar and has started rolling its first line of products, milk and fresh paneer (cottage cheese), in the month of October under the label ‘Milky Moo’.  While setting up, raising capital and acquiring land were challenges. It took the company a year to finish all the formalities to set up an industrial unit.

Milk Mantra is an effort to make a sustainable impact in the organised dairy sector and in the livelihood of farmers. The company aims to offer innovative milk products with a specific focus on the needs of the urban customer. “There is a great opportunity in the dairy sector in terms of the scalability of the business,” says 34-year-old Srikumar Misra, founder, managing director and CEO of Milk Mantra.  “The organised sector (nationalised and private players) forms only 10 per cent of the market, making up only about US $ 4 billion of the US $ 30 – 40 billion dairy market. And this share is projected to double in the coming decade,” shares Misra.

P Pradeep, chief investment officer of Aavishkaar Venture Management Services (Aavishkaar), an investor in the company, says, “With the government and mostly the unorganised sector operating in this space, there is a significant gap present in the availability and quality of milk required, which we think a company like Milk Mantra can fix.”

The company has raised US $ 5 million from angel investors such as Mumbai Angels and others from India and U.K, with a major share of it (approximately US $ 0.80 million to US $ 1 million) coming from Aavishkaar, and through debt funding from IDBI Bank. Much of this investment has gone into getting its plant up and running.

Targeting the right market

There is a good scope to introduce a range of premium and high-quality product, says Misra.  With a capacity to process 50,000 litres of milk daily, the company is targeting cities in east India such as Bhubaneswar