Indian super rich's milk supplier expands to Delhi, Bengaluru

After serving Mumbai's elite from Sachin Tendulkar to Amitabh Bachchan, Parag Milk Foods to open exclusive farms of Holstein cows in these cities

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After Mumbai and Pune-ites, milk lovers in Delhi and Bengaluru, too, can in some months enjoy a glass of morning milk fresh from the farm milked from a premium breed of ‘happy’ Holstein cows. Maharashtra-based private dairy player Parag Milk Foods, which has been experimenting with the concept closer home, is planning to expand this premium and ‘by invitation only’ brand to Delhi and Bengaluru by 2016.

Parag Milk Foods’ premium Pride of Cows brand costs Rs 80 a litre - nearly double the price of standard milk available in the market - and is currently delivered to the homes of Mumbai's elite, including Sachin Tendulkar, Hrithik Roshan, Nita Ambani, Amitabh Bachchan, Farhan Akhtar, and Kiran Rao.

Not everyone can have access to the Pride of Cows milk; a new customer comes through the reference from an existing one. Fresh milk is delivered to the client’s doorstep directly from Parag Milk’s Bhagyalaxmi Dairy Farm near Pune.

Mahesh Israni, chief marketing officer,  says: “The brand has been conceived at an exclusive level of marketing. One can also register through the website, but our executive visits the prospective client's house and explains the product thoroughly. We want to forge a long-term bond with our clients.”

The company has a consumer base of 16,000-18,000 in Mumbai and Pune and at any given time, there are around 12,000 active customers.

According to Israni, the dairy farm functions around the concept that 'happy’ cows give better quality milk. Thus, care is taken to keep the breed of 4,000 Dutch Holstein cows happy and in the best of health. “The cows are pampered with music, specially designed nutritional meals, and showers when the temperatures soar above a certain comfort level for these milch animals,” says Israni, adding the animals are free to roam across the farm and milking is never forced.

Parag claims there is no human interface from the time the milk is collected from the cows at a rotary parlour till the time it reaches the consumer. Expansion to other cities is thus only possible when the company comes up with dedicated farms nearby the cities they plan to enter. One Holstein cow costs Rs 1.75-2 lakh, compared with Rs 80,000-90,000 for an Indian cow.

Israni says the company will enter Delhi and Bengaluru in 2016. There are also plans to come up with brand extensions such as breakfast milk for kids, an energy-based milk containing a mix of fresh fruits. Israni says there is a latent demand for ghee as well and Parag is evaluating options to enter the category under the Pride of Cows brand.

So far, the company has invested Rs 150 crore in the project and aims to break even by next year. The cost of setting up the farm alone, which has now become a major site for dairy tourism attracting 1,000-1,200 visitors every month (school children and celebrities), was Rs 70-100 crore.

At the moment, the contribution of Pride of Cows brand to the overall turnover of Parag, which sells milk and milk products under the Gowardhan and Go brands, is negligible. Israni says the idea is primarily a brand-building exercise, aimed at promoting unadulterated milk fresh from the farm to home.

HEALTHIER MILK

• Located in Manchar, close to Pune, the farm is spread over 26 acres and has production capacity of 25,000 litres a day
   
• The company currently has a consumer base of 16,000-18,000 in Mumbai and Pune and at any given time, there are around 12,000 active customers
   
• So far, the company has invested Rs 150 cr in the project and aims to break even by next year