Milk, a daily essential in every Indian household, has a unique pattern of production, processing and marketing. India is the world’s largest milk producer and consumer of dairy products and with a unique consumption pattern, the country consumes almost 100 percent of its own milk production.
Mr. Kishore Indukuri was our speaker in our recently held tete-a-tete talk show – ‘Innerview – Only the Paranoid Survive’. The 45-minute motivational and inspirational talk show which features interviews of industry experts who bring forth informative and life experiences and techniques to help shape and gear you up, to succeed. Mr. Indukuri spoke about his journey and the pinnacle of his achievements. This in-depth, casual interview is a deep dive to the stimulating aspirations during the pursuit of his entrepreneurial goals.
Mr. Kishore Indukuri, the Founder & CEO of Sid’s Farm – the Engineer Farmer who has disrupted Dairy Farming in India. His brainchild Sid’s Farm is a sustainable agriculture and dairy farming start-up. He is an IIT Kharagpur graduate with a Ph.D. in Polymer Science and Engineering from University of Massachusetts. After quitting his job at Intel and having lived in the US for over a decade, he wanted to return to his roots and decided to head back home. While in his home town Hyderabad he started looking for sources of affordable natural and organic food for his family and found that the options were very limited and not easily accessible. This quest for the best initiated his venture, Sid’s Farm, named after his son.
A lot more people are also coming (into dairy farming) because it is an essential item and it was not disrupted as much as some of the other fields were (during the pandemic) because still farmers and dairy producers were able to sell these essential services. There will be a lot of demand for good food produced in the country.
Here are some excerpts from the interview:
Today in 2021, how will you summarise the dairy farming industry? Where does it stand today?
If you look at the dairy farming itself, it is predominantly still unorganised but if you look at farming per se you know the one good thing about dairy farming is that it contributes at least four percent of the economy. This is one industry where at the current levels, at least greater than 50 percent of what the consumer pays actually goes to the farmer. If you look at any particular sector in agri-space, dairy is by far the largest commodity and there’s a lot of scope in dairy. In India, the demand for milk is continuously increasing and most of the milk produced in India is consumed in the country, so there’s a lot of scope for dairy to grow in India.
When we look around the situation right now, we are surviving amidst this global pandemic and we have seen a lot of focus being shifted to taking care of one’s health so how do you think the agriculture sector as a traditional sector is addressing the betterment of human health?
There is definitely a lot of focus on eating healthy food, so definitely the focus is back on having those great sources of food like milk etc. People are looking for high quality pesticide-free and contamination-free vegetables. Everywhere in the country and in the world, we are witnessing the demand which got spurred by the pandemic. A lot more people are also coming because it is an essential item and it was not disrupted as much as some of the other fields were because farmers and dairy producers were able to sell these essential services. There will be a lot of demand for good food produced in the country. Luckily there is food now in the country for most of the population, I think now the focus is on how do we make the good, better.
Contamination is again a serious issue that we are facing with the use of pesticides and chemicals being injected that is questioning the quality of food products. So as an entrepreneur, what solution do you suggest one can adopt to address this?
This is a question that we have also faced as a producer as to how do you evoke that trust in your consumer. We use testing and primarily showcasing that to the consumer as a big way to make sure the customers know that our milk is pure. So, we do a lot of testing at the farm and at consumers’ homes. During pre-COVID, we used to bring customers to the farm, show them how we milk a cow, how we grow our grass, how we do concentrated feed at our farmer facilities, how milk that comes from our facility is tested and all the series of testing that they go through. We test for them different kinds of preservatives and antibiotics that can be added and injected in a cow. Similarly, any food product that you take, if you can develop or there are already test techniques out there, if you can take those things, leverage them and show to the customer, that our food products or our milk goes through this and that, is why you can believe that our food is good. I think that is a great way to connect to a customer and bring that trust in your blood in our products.
In the presentation shared by Dr. Indukuri, he elucidated the story of Sid’s Farm. Some excerpts:
When we started, our initial business plan was to have an integrated farm that produces great milk and food without any hormones, antibiotics and pesticides. Our plan was that we will have three to four acres of land that will have sheds for animals, it will have processing equipment and any other land that we need we would take on lease. Each farm will have an in-house pasture facility for milk and milk products. We also wanted to see if along with milk and milk products we also should be growing other vegetables as well. With a little bit of information that we knew about, we put together this business plan in early 2012. So, the idea was we would buy 50 cows and for each animal in those days, it was about 45,000. Then we would know what is the investment in preparing feed for these animals. It is important to make sure that you grow your grass or feed before you buy your animals when you start a dairy farm. This is so as to know what is the cost for an acre of land, what is the cost of seeds, what is the cost of manure, what is the labour cost and number of acres.
In 365 days, cows have to be milked two times a day, every day no matter what. There are no breaks here, people who have been in this field know they can’t attend marriages, they can’t do all the things that you think are important. In 2013, when we started selling milk direct to our customers and we would a milk our cows started us 4 am in the morning we would manually packet our milk and then we would take that milk from our farm to the city which was about 40 kilometres away and by 6-6:30 in the morning we would have the milk reach our customers. As demand for our milk increased in an automatic packing machine, packing is not a problem now.
Fodder is the most important thing. You have to make sure the land that you choose the location of your dairy farm is also very important so you make sure that you have a good amount of water in the facility where you are starting your dairy farm because both for your cattle for drinking as well as for growing grass you need quite a bit of water so water source is important if you are closer to a river belt you can do it at a fairly low cost. You should also put up a low-cost protein source, like at our farm we have azolla ponds and along with it we are also growing a few tree fodders like suspenia, moringa (or moonaga as they call here).
It is important to make sure that you grow your grass or feed before you buy your animals when you start a dairy farm.
Any suggestions on what methods to use for testing on or analysing the business models regularly.
I am assuming that this is the dairy farming business model so one of my suggestions is you start with a basic exercise excel model. That is what we started with and continuously adding the new numbers. It will give you a fair estimate of where you are today compared to what your estimates were, if you keep plugging in. In a dairy farm, I think in the first six months there is a lot of valuable data – you have your first set of cows that are producing milk, once those animals start to dry off you know you have to bring in your next set of animals that keep your milk cycle going. That time frame is a good check. If you capture daily productivity data, your weight cost data, that will give you a decent amount of data to make sure whether your initial business model you started out with is working or not.
What are your thoughts in adopting environment friendly packaging options? What will be the effects on costing?
We do get a lot of questions about this as well, so we are looking for what are the great solutions out there that are environmentally friendly. If you take the example of packing your milk in a plastic pouch, one of the things that we get is why don’t we do glass bottles. There are technologies out there where you can do it in biodegradable packaging options, so we are continuously evaluating them. But you have to look at every aspect as you make this decision. It is about the entire supply chain. When I say, for example, when we look at the plastic pouch versus glass model it is not just the filling stage or what the consumer would see at the end, it also costs you to transport it. If you look at our delivery boy, he could probably carry a lot more milk. He would be able to deliver probably 80 to 100 litres of milk when it is delivered via plastic boxes but when you do via glass bottles you can only deliver maybe 40 litres of milk at the most. Again, what does it run and how much water are you using, if for example you use a glass bottle or a stainless-steel bottle then it has to be cleaned daily and then repackaged. How much water are you using, what are your costs of doing this entire thing has to be looked at and then arrived at a solution. Having said that, we are constantly pushing ourselves to see what is the best technology out there and are looking for good options to take up biodegradable packaging materials once they are out there tested and available.
Have you approached the state government previously for incentives and for expanding your business at an all-India level?
We have definitely applied for state government incentives. We have applied some of the incentives for the processing side of our business but not availed any incentives for the dairy farming side. Because when we started, we didn’t know enough about incentives and stuff, so we didn’t apply. There are a lot of Central Government schemes from the Ministry of Food Processing. We were part of an incubator, which was a central government institution where we applied for a grant there as well, so as many as you can get it’s great because it will help allocate money for the right things in the business.
In the words of Dr. Indukuri, “Dairy farming can be a successful venture but it needs a lot of personal attention at least in the initial few years.” From his experience as a successful dairy entrepreneur whose venture, Sid’s Farm now clocks Rs 40 Crore in revenue annually delivering milk to nearly 10,000 plus customers every day, he is hopeful of the dairy sector in the coming future.