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.

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).

What was the differentiator to your business?

Our differentiator has always been being innovative, transparent and honest. We have always thrown open our business to our customers. Before the pandemic one of the things we did at the farm every Saturday was an open house. Customers could walk into our facility, and see the milking of a cow, our grass growing operations. We gave them a tour of our processing facility; we even gave them access to our laboratory where all tests are conducted. And hence we confidently say that our milk is 100% pure, free of preservatives, antibiotics and hormones. We invited schools and students for this farm tour. This was our way of trying to win the trust of our customers.

Your business project looks well researched, well organized, overall, it’s been done in bits and pieces, as a sequential flow model, if you could tell us about it?

We started with 20 cows with the initial idea to have a dairy farm, we never thought of anything else. We thought we will have few people who can milk our cows and we will sell the milk. Very soon we figured out that we had to sell this milk directly to the customer. We set up logistics for it, we bought an auto, and we started milking at 4 am, the milk would go out at 5.30 am and by 6.30 am it would reach the city. Between 6.30 am-7.30 am, we finished delivering milk because it was a small quantity. As the demand for our milk increased through word of mouth, we started waking up as early as 3.30 am. This was not making sense, as we had to keep our cows awake too. So, we tried to increase the speed of packaging, we were packing it ourselves to save the packaging cost. But soon we went from a hand packaging machine to an automatic packaging machine. This being done we were supplying milk 365 days, twice daily. This was not meeting our required production plan though we were doing only raw milk then. This was when we felt it’s time to set up a small pasteurization facility. As the demand started increasing, we only then started to build a formal distribution system. Once our product was validated it is then that I decided we can now buy our own piece of land, till then we were operating from a leased facility.

This is advice, please do not invest in big fancy sheds or land in the beginning, figure out your business model, your marketing strategy and only then invest in large infrastructure. In 2018 we moved into the new facility, since then we have been educating and spending time talking to our customers, that is how we were able to grow the business.

The next step was testing. How do you know that your milk is free from urea sugar, salt, glucose, hydrogen peroxide, so we had to figure out how to test milk? Initially, we started with kits that were available in the market, we were buying each kit for Rs. 4000 which was used in a day. So, we decided we have to start testing on our own too, and we did. Today we do over 2000 tests daily on our milk.

Seeping Into the ‘Dairy’ Routine

Faith and trust is not an overnight job. It would come from decades of consistent messaging. This brings us to the key ingredient to Amul’s success — consumer trust. Consumers have blind faith in Amul. They know this brand will not cheat them in any way. The perception of the brand is such that it is consumed by a millionaire living in a big city as well as by an autorickshaw driver in a small town.

This is the reason why it doesn’t believe in market segmentation, the opposite of what is interestingly taught in B-schools’ books. How has this trust been built? The foremost reason being the sheer quality and authenticity of the products. Besides being the best-in-class, the products are affordable which has helped the brand seep into almost every households’ kitchen. It has been offering value for money since the very beginning when consumer’s had a limited purchasing power. Its unique transparent model with a strong distribution strategy helps it keep the pricing low.

Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of providing its product, say butter, at a basic, affordable price to appeal the common masses. This helped the product to create its brand image in the household sector of the society.

Amul’s Contemporary Twist

Another reason for the huge success of Amul as a brand is its diversification into numerous dairy products. This brings out a very important aspect of the brand which has managed to keep up with the changing trends and market demand over the years and placed its products smartly on the shelves.

In 2010, RS Sodhi, who had worked with the company for almost 30 years, was promoted to managing director. The period was crucial as the dairy giant was beginning to lose its touch in the market and going into a hibernation mode. It was time to wake up the giants.

Sodhi applied changes across the supply chain, exports markets and new launches which made Amul grow 2.5x in 5 years (2015), the most in its entire history. This was evolution of Amul 2.O, with a contemporary twist. From ice-creams to mozzarella cheese, Amul has built a diversified product range besides its usual anchor products —milk, butter, curd and paneer, which are its cash cows as they drive the bulk of revenue and profits. In FY19, Amul launched value-added products such as flavoured milk, camel milk, fruit based Amul Tru (combo of milk and fruit) and new range of kulfis. It also launched the Happy Treats brand with products such as french fries, aloo tikki and hash brown.

By the early 2000s, Amul had launched ‘Real Ice-cream’, branded yoghurt, mozzarella cheese, coffee products, tapping into the growing and changing consumer demand. It has been constantly innovating and investing its branded dairy product portfolio along with adjacent food categories. It plans to expand its presence in packaged sweets beyond Gulab Jamun and Rasmalai. It also entered the branded edible oils segment last year with its launch of ‘Janmay’ brand with five variants.

However, it is not that all its products have been well-perceived. For instance, Amul chocolate and pizzas have failed to penetrate the markets, including international.

Despite these glitches, Amul is a winner in each and every category on Indian dairy business—revenue generation, turnover, product categories—Amul beats its deep advertising pocketed-competition by a huge margin. This has been made possible with the brand’s penchant for quality at affordable prices.