Amul’s famous jingle of the 90s era featuring Smita Patil’s cameo at the end of the commercial is reminiscent of an epic white revolution that made India a world leader in milk production from a milk deficient nation after independence. The commercial at the end, expresses gratitude to Amul’s cooperative milk movement that made the village women economically independent. Since the revolution, India’s dairy farming took great strides that emerged to be a self-sustaining industry and largest employment provider after Britishers left our economy in shambles.
With all the praises for India’s white revolution, India’s dairy industry is yet mired in the hands of unorganised players. Approximately, 60 percent of surplus milk is handled by the unorganised sector (milkmen), while the remaining 40 percent is procured by the organised sector comprising of dairy co-operatives and private companies. Moreover, the industry is highly plagued by inconsistent quality and quantity of milk, incapable of managing a bigger herd, and wastage of milk. According to Chambers of Commerce and Industry of India (Assocham) and MRSS estimates, about 3 percent of the milk produced gets wasted annually.
The bright rays of advanced technology do not seem to have reached the dairy industry due to its domination by unorganised players all these years until, in 2011, five techie friends from Wipro witnessed the prevailing roadblocks in the production process in dairy farming decided to intervene technologically by establishing Stellapps Technologies.
According to Chambers of Commerce and Industry of India (Assocham) and MRSS estimates, about 3 percent of the milk produced gets wasted annually.
Stellapps Technologies– A brainchild of Wipro techies
Bored of their mundane jobs, five Wipro techies Ranjith Mukundan, Ravishankar G, Shiroor Praveen Nale, Ramakrishna Adukuri, and Venkatesh Seshasayee in their late 30s and early 40s thought of starting their venture that will improve the quality of life. After much discussion, the techies narrowed down to set up their venture in agriculture and health that birthed the idea of digitising the dairy supply chain thereby establishing Stellapps Technologies Pvt.Ltd in 2011. The startup based out of Bangalore nurtured and incubated at IIT Madras focuses on digitising the dairy supply chain using IoT, machine learning, and data acquisition. Milk is the largest consumable beverage in India but the yield per animal is low, due to a lack of preventive healthcare, proper nutrition, veterinary assistance, and reproductive management for cattle. Stellapps solutions target the small and medium farmers who own small herds of cows and operate without any technical intervention. Its multiple automation and knowledge-based solutions aid the farmers in optimising the milk production process and monitoring the health of the cattle. A tech intervention in the dairy supply chain will drastically improve the operations of the entire chain.
The road to entrepreneurship was not smooth
Like most ventures, roadblocks to success was no stranger to Stellapps Technologies. One thing which played in their favour was the unfamiliarity of the founders regarding the functioning of the dairy industry. Since none of them belonged from an agro/dairy background they invested a significant amount of time in understanding the vertical and begin everything from fundamentals to be able to implement their IoT stack to it. Their lack of experience helped them to look at things from a fresh perspective.
Access proved to be a major challenge for the founders since their customers or target audience lived in the outskirts of the cities that made deployment, support, and maintenance cumbersome as lots of time were spent travelling to those places.
Moreover, Stellapps realised that to educate the farmers about the importance of adhering to quality control, traceability, supply chain, and cold chain optimisation protocols, they had to find an alternate way to work with milk federations and unions, since approaching the dairy markets under government control directly would mean battling red tapism.
Smart Milking and cattle monitoring
The milking process and cattle monitoring is the first step in dairy farming that is a daunting task for the farmers due to the long intercalving period, low awareness in nutrition management, less access to quality veterinary services, and skewed ratio of cattle population and veterinary institutions. Here, Stellapps mooON device is an AI-enabled animal wearable that has two components: mooON device and app. MooOn device is a pedometer for cattle that detects heat based on their activities and resting behaviour. The app is a herd management application that gives real-time alerts on animal activities, recommends personalised nutrition plans for every breed, and provides cattle historic data management. This wearable has enhanced milk quality and yield by 20 percent, reduced the intercalving period by one month as AI helps to detect the heat for artificial insemination, and has led to a 50 percent and 10 percent reduction in cattle health and farm admin expenses respectively.
Creating transparency in the dairy business
After completion, of the milking process, the next step is to send the collected milk to various collection centres. The collection of milk in the collection centres takes place manually and is riddled with challenges such as data manipulation due to manual capturing, milk adulteration, lack of analytics for making an informed decision in dairy management, troublesome reconciliation for paying farmers, and lack of transparency. Smart AMCU from Stellapps is an automatic milk collection unit enabled by the android IoT device smartCC.
The cloud-based chilling management solution smartCC collects data automatically that consists of total solid loss in milk and checks the quality degradation of the milk due to delay in chilling after procuring from farmers. The data collected is made available to the dairy processors and is made visible to other farmers in the collection centre on a real-time basis, thereby creating transparency while incentivising.
The dairy companies now have to pay a higher price for better quality milk and therefore cannot pay a price that is compromising to the farmers. It also upgrades the milk quality and reduces adulteration as the data now will act as the litmus paper for determining the milk quality depending on which farmers will be incentivised. Thus, this will mutually benefit both the farmers and dairy processors as the deal will be of the right price for the right quality.
ConTrak, which is another IoT-enabled device that does real-time management of the cold chain storage with its advanced reporting and monitoring mechanism accessible through web and mobile portals, while MooFlow ERP helps in simplifying dairy operations.
MooPay- digital financial inclusion of farmers
When it comes to loans and seeking financial help, the banks and financial institutions in India turn a deaf ear to the farmers whether agriculture or dairy, thereby, forcing them to borrow money from friends and unorganised lending institutions at enormously high-interest rates. MooPay makes financial services from banks accessible to the farmers by bringing attractive financial products such as loans, and insurance at attractive interest rates to be able to carry on their daily operations. To the dairy processors, it saves from the hassle of cash handling by offering an automated and direct farmer payment and quicker payment reconciliation eventually increasing farmer’s loyalty.
Stellapps multiple automation and knowledge-based solutions aid the farmers in optimising the milk production process and monitoring the health of the cattle.
The Pricing, profits, and business model
Stellapps follows a competitive pricing model as compared to its counterparts overseas. The price of its solutions includes the entire budget starting from the infrastructure development to the milking process and cold storage. They realize their revenues from a fixed share per litre of milk production from a profit-making farmer and earn profits when a farmer makes profits. They also supply their dairy solutions in a zero-capex model business i.e. rental payment models where they charge customers for subscriptions and cloud services. Its clientele consists of dairy processors and milk cooperatives such as Nandini, Amul, Heritage, Nova, Milk Mantra, Osam, Thirumala, Milk Lane, Hatsun, and Britannia.
Stellapps -money matters and funding
Recently, in October 2021, Stellapps has raised $18 million as a part of its first funding for its pre-series C round from global animal nutrition and aquaculture company, Nutreco. Its other existing investors include Qualcomm Ventures, Celesta Capital, and ABB Technology Ventures. With funds raised Stellapps plans to utilise the funds to scale its traceability network and digital footprint across India.
A round of applause and the road ahead
Stellapps is India’s first dairy technology solutions company, building automation tools powered with cloud, mobility, and data analytics for dairy farms, cooperatives, and private dairies. Its statistics consist of transforming the lives of 1.3 million dairy farmers, working with 4,50,000 cattle, processing 2 billion litres of milk through its solutions annually, and has enabled farmer payment worth $750 million annually.
After the lockdown disrupted the dairy operations in 2020-2021, the organised dairy sector is set for a rebound and is estimated to grow by 5-6 percent, to cross Rs 1.5 trillion in sectoral revenue for the first time, according to Crisil. This growth projection of organised dairy means ample business opportunities for Stellapps.
Stellapps also has ambitious plans to step into foreign geographies like – Africa, Southeast Asia, Latin America, other SAARC nations), and in developed markets in Europe and the US through partnerships with large original equipment manufacturers.