Odisha-based Milk Mantra targets ₹1,000-crore revenue in four years

With its “ethical sourcing programme”, it may be the private sector’s Amul-in-the-making in Eastern India.

Milk Mantra, India’s first venture capital-funded start-up in agri-food sector, is planning to increase its revenues by eight times in the next four years, from ₹122 crore in 2015-16 to ₹1,000 crore by 2020-21.

Given that in 2011-12, the company’s revenues were just ₹4.5 crore, the exponential growth tells a story.

Chasing the target, Milk Mantra recently ramped up its milk-processing capacity from 75,000 litres to 2.5 lakh litres per day, upgradable up to 3 lakh, at its two plants in Odisha. It is also planning to increase the number of networked dairy farmers from the existing 40,000 to 1.5 lakh in the next 3-4 years, Srikumar Misra, founder-Managing Director-CEO, told BusinessLine .

A new brand Misra quit as Director of Mergers and Acquisitions at Tetley, London, after eight years in the job, to establish a dairy business in 2009 in his native Odisha where availability of milk was scarce.

“I was already in the food and beverages segment. While searching for ideas to start a venture, the dairy segment stood out.”

Having witnessed the evolution of the F&B industry across China, South Africa, the UK and Europe, he realised that the organised space in India and the $50-billion dairy industry was in need of a new brand that was healthy, functional and innovative.

The company introduced its flagship product, Milky Moo, in Odisha in 2012. It became one of the fastest growing consumer brands with a CAGR of 100 per cent, he said. Now he hopes to make it 10 times bigger, to cater to the market mainly in Eastern India.

Milk Mantra, which has so far raised venture capital funding of about ₹100 crore (₹25 crore as debt, the rest being equity), has invested about ₹60 crore to expand processing capacity at its plants in Bhubaneswar and Sambalpur district in Odisha.

Collection centres “We are also increasing the number of milk collection centres from 300 to 1,000 and procurement from 1 lakh litres to nearly 4 lakh litres of milk per day as we are focusing on increasing productivity and output by three times. If necessary, we will invest more in capex.”

Seventy per cent of the company’s revenue comes from toned milk and 30 per cent from other products such as probiotic and plain curd, lassi and butter milk sold under the Milk Moo brand.

Misra said the dairy products business was a $40-50 billion market in 2009, only $5 billion of it organised. The market was already growing in double digits and “I could see the opportunity here.”

As part of the “ethical sourcing programme” — also followed by many global companies as a “conscious capitalism business model” — Milk Mantra focuses on transparency in payment and pricing. “Currently, we pay our milk farmers ₹27 per litre every 10 days. We sell toned milk at ₹38 per litre.”

Since the farmers connect and deal with the company directly, it ensures elimination of middlemen. And through tie-ups with banks and financial institutions, farmers are encouraged to buy more cattle. Cattle-feed companies, similarly, provide quality feed to increase productivity. Unlike Amul’s agent-cooperative model, Milk Mantra owns and manages the entire sourcing segment.

In November 2015, the start-up launched MooShake, a dairy-based health beverage blended with curcumin (a turmeric extract), which Misra wants to promote as an immunity booster.

Developed in-house, MooShake has a shelf-life of 180 days.