Srikumar Misra, a former executive with Tata Group, returned to his home state of Odisha in 2010 to start a dairy company called Milk Mantra. He saw this as an opportunity to improve the industry and the quality of life for Indians living in rural areas. It took two years to raise $5 million to set up the supply chain to begin operations.
Using smartphone apps, big-data analytics and social media, Misra’s dairy business is among hundreds of startup companies leveraging the arrival of the internet in many rural areas in India.
India has the world’s largest dairy herd—on the order of 300 million buffalo and cows that produce 165 million metric tons of milk annually. Middlemen in India often sneak water, sugar or powdered milk into raw milk, adding volume and lowering the quality. The milk that independent middlemen gather from farmers and deliver to towns and villages is often unpasteurized and improperly refrigerated.
That is why almost all Indians boil their milk—and Mr. Misra viewed this as a way to differentiate his product. There was a huge problem with food products that people could trust. The opportunity was addressing this trust deficit through an ethical sourcing business model.
Milk Mantra pays farmers more than the competition and records the quantity and quality of milk after their twice-daily milk collection is tested for milk fat levels and contaminants at village collection points. This helps farmers understand the value of their milk. Milk Mantra uses an app to upload all of the farmers’ test results into a cloud database and plans to provide real-time feedback and analysis to farmers via their phones.
- The founder and his wife believed that India’s emerging middle class would spend more on a high-quality, heathy product.
- Together they created the company’s slogan defining a premium product: Milky Moo. Motto: “No Need to Boil.”
- The company educates dairy farmers on healthy dairy farming practices, provides veterinary support and nutritional information about feeding their animals.
Quests and Actions (Q&A):
- How important was the combination of new Internet access, social media and young parents focused on health and nutrition in building the new milk brand?
- Can government and business training programs use Milk Mantra’s model to help dairy farmers in other impoverished areas of the country?
- Is the ethical sourcing model transferable to other sectors of the Indian economy with entrenched business practices?