Cashing in on cows, Milk Mantra style

After gaining market share through innovation, the company plans to increase capacity and scale up business

Nirmalya Behera
"While I was looking for ideas to start a venture, the dairy segment stood out," recounts Srikumar Misra, who headed the mergers and acquisitions business of Tata Tea/Tetley, before quitting to set up Milk Mantra Dairy in 2009.

The company produces a range of products such as milk, probiotic and plain dahi (curd), paneer, lassi and buttermilk, sold under the Milky Moo brand. It sells its products in Chhattisgarh, Jharkhand and West Bengal, as well as central and coastal Odisha.

Misra, managing director and chief executive, says, "As a part of TAS (Tata Administrative Services), most of my experience was with Tata Tea and Tetley, for which I was posted in several emerging markets across the globe. I saw there was a lot of opportunity for packaged food and value-added food products in India, where the gap between demand and supply was huge."

"At that time, the dairy products business was a $40-50 billion market and highly unorganised. Only $5-7 billion was in the organised space; in eastern India, it was as low as 10 per cent, compared with the national average of 25 per cent. The market was growing at double digits and I could see opportunities here," he adds.

Fidelity Growth Partners India, which recently invested in Milk Mantra, says, "Given the lack of dairy development in eastern India, the region faces a milk deficit. This means there is a significant opportunity for well-run dairies to establish themselves and build a formidable supply chain, as competition is weak."

Packaging innovation

"We realised consumers were concerned about the quality of milk, as well as freshness; also, there were adulteration issues. We saw consumers boil the milk to extend its shelf life, even if it was pasteurised," Misra says.

To increase shelf life, Milky Moo pouches use Tripak technology - a three-layered film, with a black layer preventing damage due to exposure to light. This extends the life of the milk by about three days. For paneer, it uses German packaging technology Multivac, which increases the life by 21 days.

"It (Milk Mantra) leveraged product innovation and differentiated branding to rise to a dominant position in eastern India in just three years," Fidelity Growth Partners says.


Milk Mantra was the first Indian agri-food venture to raise venture capital, says Misra. It had received $5 million (about Rs 22 crore) in the first round of funding from social venture investor Aavishkaar, as well as 20 angel investors. Half the overall investment was equity; the rest was debt from IDBI Bank.

In mid-2012, the company raised an undisclosed amount in series-B funding from Aavishkaar. In series-C funding, it raised Rs 80 crore. This round was led by Fidelity Growth Partners India.

For 2012-13, the company recorded a turnover of Rs 18 crore; this jumped to Rs 45 crore in 2013-14. It hopes to break-even by the end of this financial year.

Ethical sourcing

An aspect close to the company's heart is ethical sourcing of milk. "During my experience in working for several global brands, I saw the concept of ethical sourcing was growing rapidly…across the world, all large companies have ethical sourcing programmes," Misra says.

The company focused on transparency in payment and pricing. It ensured farmers were apprised of the prices of milk and paid on time, doing away with middlemen, who ate into the incomes of farmers earlier. Through tie-ups with banks and financial institutions, farmers are given money to buy more cows. Cattle feed companies were also roped in to supply the quality feed, which increased productivity.

In its first year of operations, Milk Mantra roped in about 5,000 farmers. Currently, it has a network of about 25,000 farmers, a staff of about 140 and 250 milk collection points. The company has invested intensively in bulk milk coolers. It has 20 such coolers and plans to add another 20 in the next 18 months.

"The ethical sourcing programme is at the core of Milk Manta's conscious-capitalism business model. Our big network has resulted from a fair and transparent payment system. Now, farmers deal directly with Milk Mantra and have high trust in our practices," says Rashima Misra, executive director, Milk Mantra.

The company owns and manages the entire sourcing segment, a departure from the agent-cooperative model followed by Amul.

Road ahead

Milk Mantra plans to set up a plant in western Odisha, with a capacity of 150,000 litres a day, and increase the capacity of its processing unit to 200,000 litres a day. It also aims to scale up business, both in Odisha and neighbouring states. The company is also exploring acquisition opportunities. It plans to launch a milkshake across major markets.


The name Milk Mantra conveys a message that it is possible to establish a strong link between the consumer and the producer, without compromising on quality, fair price for producers and returns for investors. The company has successfully provided alternative products and, in the process, demonstrated consumers will not hesitate to pay more for quality products. The company has made inroads into the well-established supply chain through ethical milk sourcing. It can enhance this by sharing information about the flow of funds from the consumer to the producer.

Within a short period of its launch, Milky Moo has become a well-known brand in Odisha's capital city. The company is meticulously leveraging the power of branding and merchandising and is using digital media extensively.

However, there are challenges. The company isn't able to cater to several pockets within the state's capital, as it doesn't have exclusive kiosks. How about some synergy with the vending zones spread across the city? It is time for Milk Mantra to channelise its energy towards the larger issues of low production and less consumption.

Verghese Kurian had said, "Milk is the only commodity that has to be collected twice a day, every day of the year." Therefore, cooperatives are the only logical system for this sector. Hope the company adopts this soon, so that both farmers and consumers become shareholders. Only when Milk Mantra takes up such challenges will it succeed in connecting capitalism with the people.
DV Ramana is professor, Xavier Institute of Management, Bhubaneswar

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First Published: Sep 15 2014 | 12:44 AM IST

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