How Milky Mist crafted a paneer revolution in the South
Glistening white blocks of fresh paneer (cottage cheese) come hurtling down a conveyor belt, met by robotic arms that slice the blocks precisely into halfkg. chunks. Another arm quickly pushes out the paneer slabs not in correct size and weight into a drum before the next rightsized chunk comes along – all at bewildering speeds and is packaged in a Milky Mist branded tub.
The tubs are then stacked in boxes ready to be sent out in refrigerated trucks to retail shelves.
This sprawling, highlyautomated dairy of milk processing major Milky Mist is set amid vast green fields in Erode district of Tamil Nadu. Apart from humungous quantities of paneer, the dairy churns out a variety of over 20 products and over 350 SKUs mostly under the Milky Mist brand.
Other products
In different sections of the dairy, one can see ghee, cheese, fresh cream in cartons, buttermilk, milk shakes, Greek yoghurt, protein enriched curd under its Skyr brand, ice cream, chocolates under the Capella brand and more are being produced. “We process close to one million litre of milk per day sourced from around 70,000 farmers spread over 12 districts,” says T. Satish Kumar, MD and the ‘pioneer of paneer’ in the South. From producing 5060 tonne of paneer a day, the plant is scaling up to produce a 100 tonne.
The gleaming edifice of steel vats, miles of steel tubes, robots and a vast fleet of refrigerated trucks with Milky Mist emblazoned on them waiting for dispatches from the dairy, is a far cry from the humble beginnings of Satish Kumar. Hailing from an agriculturist family in Chithode, a neighbouring town, his father traded in milk, sending it to Bengaluru. In 1991, at 17, Satish quit studies to join the milktrading business.
One day, Satish took away large quantities of milk to try and make paneer. When his father returned in the evening, much to his horror, he found Satish had diverted some 400 litre of milk to make paneer in a rudimentary way. He thought Satish had spoilt all the milk. “No Google or YouTube videos those days to learn,” he says wryly.
He learnt t hotels in Bengaluru wanted good quality paneer and he saw in that a good market to value add to milk.
Today, paneer is ubiquitous in the South, but in the early 1990s, it was a low consumption and novelty product. Only some hotels and large department stores in Bengaluru stocked it. In 1997, when supplying the erstwhile Foodworld supermarket chain, the purchase manager asked him what his brand name was. “I had no idea what a brand name was. We went to a browsing centre and searched 1015 names and selected Milky Mist. But at that time, I did not have any vision. We just gave a brand name for the market,” he explains.
For the next decade, Milky Mist trundled along supplying 23 tonne of paneer to the Southern market but slowly local consumption picked up.
A visit in 2009 to a dairy trade fair in Hanover was a game changing moment for him as he saw the possibilities that automation offered. He later invested in a fullyautomated plant at the present site and expanded the Milky Mist offering to curd, yoghurt and cheese. “We realised we couldn’t build a cold chain by being a single product company,” he adds.
In 2013, with a turnover of ₹150 crore and a debt of less than ₹15 crore, Satish said he wanted to invest at least ₹500 crore for a mega, fully automated plant.
While many private equity players have been beating a path to his doors, Milky Mist has primarily grown through debt with bank loans.
Milky Mist expects to wrap up FY 2324 on a turnover of ₹2,000 crore with an EBIDTA of 14%. Satish says the company has been growing at a quick nick of 30% annually and has sufficient cash accruals to plough back. It’s pumping in ₹600 crore to expand dairy operations and raise paneer and cheese output.
(The writer is with The Hindu businessline)