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INTERVIEW

“People pay the price as long as it's truly organic”
Monday, 08 April, 2019, 08 : 00 AM [IST]
Nandita Vijay, Bengaluru

Organic is definitely expensive compared to the normal kinds available. However, there is a valid reason for it. A lot of investment goes into ensuring it meets all standards of organic. In the dairy industry, one has to ensure that there is no human interference for chances of adulteration. This is where the Bengaluru-based Happy Milk, an organic dairy brand, came into existence in December 2017 as a self-funded initiative worth Rs 10 crore. Mehal Kejriwal, co-founder, Happy Milk, in a
conversation with Nandita Vijay throws more light on this niche area of dairy business - the product being priced slightly high. Excerpts:


How would you describe the current scene for dairy startups and the dairy sector in the country?
In India, different kinds of practices are followed in the dairy industry. A huge influencing factor is the people! Indians are moving towards organic drastically leading to the rise of many startups. It is a great sign and development for us. In terms of health, people have gotten a lot more conscious and are really researching before buying anything for their kitchen.

The dairy industry runs on different visions. While some believe in collecting milk, fodder and so on from different sources, some believe in ensuring everything comes from the same source. Some farms are focussed on quantity, some on quality. I feel there needs to be more refinement and organisation in terms of the process and farm setup.
Another thing which is noticed is that dairy startup needs huge investments, but many startups are failing as they are investing more in areas to invest less and vice' versa. Though the vision maybe great, this backlash leads to a downfall.

What are the visible trends?
Organic has been an ongoing but super popular trend since years! Now, it has become a fashion statement. It is a much-needed trend to revolutionise our thoughts and create more awareness about eating clean.
Farm fresh/ fresh from the farm is another trend which is picking pace. Be it milk, vegetable, fruits - people are withdrawing from anything that may have preservatives or that has an abnormal shelf life. Many apartments are taking up this initiative of having vendors with farm fresh products sell to their residents, many organic stores have popped up around cities, a number of online portals have started which only deliver organic and fresh products, many influencers have strongly starting propagating healthy lifestyle and so on.

Trends like these have emerged due to awareness which has given birth to business like our model to cater to them.

What are the challenges for startups like yours?
At the initial, the challenges were forming the right team, people who have vast knowledge about the industry and training them, choosing the best breed of cows and also having to keep the farm tech-driven and lastly it is the issue of logistics.

How receptive are private equity and venture capitalists to fund this business model?

Dairy, being a huge part of every Indian household, has a lot of business potential.

Many investors are looking to enter the food and beverage industry because of the revolution of healthy/organic living. In the dairy industry, if the vision, farm setup, the process is right and set then most of the investment would direct towards brand building, marketing and scaling the business. That's where investors are able to spin their wand and fuel it to another level. However, if the base, vision & farm setup are unstable then one wouldn't want to take the risk.

There is a view that organic milk is expensive, comment.
Organic is definitely expensive compared to the normal kinds available. However, there is a valid reason for it. A lot of investment goes into ensuring it meets all standards of organic. In the dairy industry, for us to ensure that there is no human interference for chances of adulteration, we have set up high-end tech through and through, brought on the best & most experienced team on board from around the world, invested in the best form of packaging, grow about 10 varieties of crops for the cow's fodder which needs a lot of attention and manure, cow Fitbits, etc. This all does add up to the cost, hence the price is a tad higher. People do understand and are ready to pay the price as long as it's truly organic. Farm tours help a lot to give them an insight on how it works.
However, in the name of organic, it is unjustified to unreasonably price the product high.  

How has your brand fared so?
It has received an overwhelming response in its one year of commencement. From 300 litre per day, we are now at 4,000 litre and from one product, we are now at eight SKUs. Right from home deliveries to our presence in 82+ stores across Bangalore, we are also available on online portals like Daily Ninja, Doodhwala, BBDaily and Amazon Prime Now. The figures speak volumes about how our journey has been so far. It also gives us a deep insight into the huge demand for organic and farm fresh milk in the market, as people are aware of the unfortunate adulteration in the dairy industry.

What are the key distinguishing factors that enable it to garner market opportunity in the wake of stiff competition?

The quality being used, the cutting edge technology used to maximise the production and the unique packaging.

Provide us details about your farms in terms of area, technology and cows.

The dairy farm is about 30 acre located in Tumkur, Karnataka. Currently, we have 400 cows at the farm.

We work closely with GEA, one of the largest suppliers of technology for the food processing industry and for a wide range of other process industries. Right from where the milking parlour should be, to the location of the calves, the packaging process, pasteurising and homogenising expertise, every little map, and training has been given by them. Till date, our team gets constantly trained and monitored to ensure that complete justice to the aforementioned processes is done.

One of them is their high tech gadgets, which is a form of 'Fitbits' are installed on their cows, which helps in monitoring each animal's daily activity. In the event of any unusual activity, the device sends a notification on a mobile device app and the doctors ensure complete and due attention is given to that cow.

Ours is one of the only few dairies that has adopted the cow scouting technology. Apart from the cow scouting technology, there is a state-of-the-art milking parlour, which unlike other milking equipment does not cause any stress to the animal. The animals are in fact milked in less than three minutes! While if milked manually, it would take at least 10 minutes to milk an animal. And the rule is simple, more milking time, more stress on the animal.

There is a lot happening with IoT in dairy, but it’s more towards milk collection.

Share details on your R&D.
Initially, we observed ourselves completely into the R&D process. I personally feel this is the most important part of any business. It helps create a strong and concrete foundation. Majority of our R&D included studying and visiting a lot of farms across India. The ones who are running successfully, ones who shut down, small-scaled and even large scale. We also had long hours of chats with many farm and dairy owners, consultants, agriculturists, dairy technicians, etc. Interactions with a lot of international dairy experts from Israel and Germany and bringing them on board has helped our farm achieve the highest quality of milk produced in Bangalore!

Overall: helped us explore the ground reality of understanding and running a dairy business. Also helped us structured what kind of team, tech and cows we would home.

What is the reason for you to set base in Karnataka?
Bangalore has the perfect climate and soil conditions for cows to remain happy and for us to grow the right fodder for them. These two are the main factors for us to confidently set base here.
Apart from that, Bangalore being has been my home ground for more than a decade. So, starting the venture here added a lot more meaning.
 
Which are the fastest growing products?
Curd and homogenised (ready-to-drink) milk are our best sellers! Right from kids to grandparents, this product has always been in demand.
In terms of the milk, clients love how one doesn't need to heat it and can directly be drunk from the bottle. Many even say it gives them an additional few minutes of sleep in the morning.

Curd has been a constant favourite due to the creamy texture it adapts to in mud pots! Also, the natural colour yummy taste reminds them of their good old days.  

What is the acceptance of bottle milk and do your consumers return the bottle to you?

Customers are thrilled to know the concept of glass bottled milk exists. Their first reaction is "Oh lovely! Reminds me of my childhood days!" Also, Bangalore has a very ecofriendly clientele. Hence, the concept is loved even more.

We have hassle-free returns. In fact, no one would want to pile up glass bottles in their homes. So, it is a very proactive reaction of placing an empty bottle at the doorstep.

In terms of the cost, clients don't think twice as they know it is a much healthier option. Today, people are looking to invest in more a healthy lifestyle even if it costs a tad more.

How is the concept of clay pots for curds accepted?
Our clay pots are more like a trademark! The matkas have been an absolute hit in Bangalore. Kids have resumed to eating curd and just dunk their spoons indirectly. With the natural properties of matkas absorbing the weigh (water released from curd) the texture becomes extremely creamy. That's what clients have loved. It takes them back to their good old days where the packaging was also clean and organic and very easily disposable as it gets decomposed.
 
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