Nothing perhaps satiates our appetite more than milk, the universal food across cultures. Have you ever wondered what it takes for that cold or hot glass of the fulfilling drink to end up at our table? Here’s a snapshot of the dairy business in the region, with only milk as the peg, though the business does have several side-products like butter, ghee and others.
The business is dependent on the humble milch animal, but marketing is what makes it sustain. Keep in mind though that great marketing of a bad product will annihilate the product.
The company that makes the final product gets its raw material in small batches from small individual farmers. The milk is monitored for quality and then bought at the pre-determined rate, which is roughly 60% of the price it is sold to you and me.
There’s also a surprise. Even as sophisticated machines bring out the specifics of the milk quality, the sense of smell is the first benchmark that a sample has to pass before procurement.
“The milk received is tested for smell and only the rest if put to the machine for giving us data on components like fat. We have olfactory specialists for this,”says Karan Arora, of Baba Milks, a maker of dairy products in the Faridkot segment.
Business aside, why do prices have to keep rising? The answer we all are used to is that the price of feed for the animals has risen and thus the hike. However, will this cycle ever stop?
Most in trade seemed to agree that feed prices are cyclical, but the downside is not passed on to the customer as other input costs have by then been internalised by the customer.
Another reason could be that of the manufacturers selling milk and milk products, only a few have their own farms or animals.
Most, except cooperatives, find it cost-efficient to source from hundreds and thousands of small farmers, using sub-agents and agents and only process, store and transport the milk. Some have invested in sustainable practices like a feed factory.
For the tricity, it is instructive to see the consumption patterns though Verka remains the leader. Several private companies have ventured into the business and all are forced to sell at the same price as differentiating the product remains a challenge, though packaging can be one.
Transport and the care that farmers (suppliers) take of the real VIP in the chain, the milch animals.
The transport van needs to be refrigerated, the driver and the helper need training and pilferage is a real headache.
Another key is packaging. Have a fancy name and you could end up alienating your consumer. You need to either link your brand to mother, something priceless or a place to get the connect.
Habits could also be a hindrance as packed milk is a relatively recent addition to our shelves.
At the national scene, Amul, a cooperative of farmers from Anand, Gujarat, is now a great brand with the iconic little-girl billboards part of our consciousness and to an extent, Verka for the state.