The Global Challenge
Made-in-India brands are finding their feet in the luxury circuit
nutrition needs are not compromised.
Like her, 35- year- old Shraddha Sharma, a homemaker who lives in the up-market suburb of Bandra in Mumbai, does not mind “paying a premium for purity”. The premium milk brand is gaining popularity among prominent corporate head honchos as well as Bollywood A-listers. “We are adding at least 20 customers per day,” Sarda claims.
The company has eliminated intermediaries by owning the entire supply chain from the farm to the consumer’s doorstep. “We own 200-odd motorcycles in Mumbai through which the last mile delivery is done,” Sarda says. The farm generates around 10,000 litres of milk per day which is delivered to consumers’ doorsteps between 5 am and 7 am. “Our vans are air-conditioned; we also put glycol packs which keeps the milk cool for at least a couple of hours after it is taken off the vans.”
Sarda also offers consumers personalisation by allowing them to choose from doorstep delivery, doorbell delivery and hand delivery.
The Economics
Sarda Farms is, today, a `45-crore business. The company has launched its brand of ghee and curd, which are also priced at a huge premium – a 1 kg pack of Sarda Ghee is priced at `900 (as opposed to at 1 kg pack of Amul Ghee, which is priced at `390).
The company is yet to make profits, though Sarda is confident that it will be profitable in less than a year from now. Gaurav Tandon, formerly Senior Consultant of Consumer Practice, A.T. Kearney, says that the milk business is an expensive one to crack, especially when one owns his own cattle and also manages distribution. However, he believes, a cow farm makes better economic sense than a buffalo farm. “Cows have a longer milking cycle than buffaloes. Also, the milking process of buffaloes cannot be automated – the milking machines are designed more for cows.”
There is a growing entrepreneurial interest in premium milk. Sarda has competition from brands such as Pride of Cows and Blissfresh – premium milk brands with the farm-to-home business model. While Blissfresh has been set up by former employees of Ratnakar Bank, Pride of Cows is an initiative of Parag Milk Foods, which owns the GO brand. “We started Pride of Cows to give an insight to the farmers we aggregate milk from about the best practices in milk farming,” said Devendra Shah, CMD of Parag Milk Foods, in an earlier interview with Business Today.
While Tandon is certain that there is a market for premium milk, he recommends that Sarda Farms add “fortifications” to the milk to justify its `90 price point.
Experts feel that scaling up a farmto-home model would be an expensive affair and hence challenging. “Consumers are ready to pay a premium if the product is unique and desirable. However, scalability would be a challenge considering the need for consistency and relatively high costs in niche segments for small players where volumes may not justify,” points out Devendra Chawla, Group President, Future Group.
Sarda is aware of the hurdles in scaling up a niche brand, and has chosen to get the system in place instead of mindlessly going on an expansion spree. The company, in the last six months, has launched a website and an app which allows customers to make payments, give feedback on the product online, and inform the company about dates on which they do not want milk to be delivered. “We have been focusing a lot on customer experience and satisfaction, for which we have invested generously in technology. In fact, the last few months have given us the highest growth.” Sarda is leaving no stone unturned to make it a delectable experience for his consumers. ~
THE COMPANY DELIVERS TO 6,500 HOMES IN MUMBAI AND NASHIK