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How an online milk subscription service has helped one entrepreneurial farming family

An online subscription service that delivers milk to Bollywood stars has helped an entrepreneurial farming family build one of the biggest dairies in India. Caroline Stocks reports...

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How an online milk subscription service has helped an entrepreneurial farming family

Parag Milk Foods processes and hand-delivers chilled milk from its 3,500-cow dairy herd in Manchar to almost 50,000 consumers across some of India’s biggest cities.

 

Sold under its Pride of Cows brand, the service, which is only available by invite, has won high-end fans including actors, celebrity chefs, bloggers and well-known businesspeople.

 

And to be part of the exclusive clientele list, all of them are prepared to pay 120 rupees (£1.40) per litre, three times the usual retail price of milk, to get their hands on a bottle.

 

The success of the business comes from the brand’s ethos of selling high-quality milk from cows they claim are the most pampered in India.

 

Consumer

 

India is the world’s largest producer of milk, contributing to 20 per cent of global milk production, as well as being the largest consumer of dairy products, with 99 per cent of households buying milk and cheese.


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But concerns over milk quality and safety have led consumers to seek out alternative products.

 

Recognising the trend – and seeing the opportunity to develop premium products thanks to India’s expanding middle class – Parag Milk Foods set about developing their invite-only doorstep service, the first of its kind in the country.

 

Akshali Shah, whose father Devendra Shah set up the dairy farm in 1992, originally processing 20,000 litres, says: “We see milk at your doorstep as the next evolution in the Indian dairy market.

 

“We are offering a high-end service which promises to be a step up from other milk on the market and it is something people are prepared to pay for.”

 

The creation of India’s celebrity milkmen links back to Mr Shah’s first herd of Holstein Friesian cattle.

 

Having secured a loan to buy a farm and animals without help from his family, over 10 years he steadily increased cow numbers to 3,500 head. But, while he was proud of his expansion, he was concerned that average cow yields on the farm, as with other dairy farms in India, lagged far behind producers in the rest of the world.

 

“The average yield per cow in India is 1,500 litres,” says Ms Shah.

 

“On many farms there are problems with hygiene, nutrition, cow comfort and healthcare and a lack of knowledge about scientific practices, all of which were preventing cows from maximising their potential.”

 

Keen to address the problem, in 2005 Mr Shah set up a research and development centre alongside the dairy, with a view to educating farmers on how to produce high-quality milk using the best global production practices.

 

As well as installing high-tech dairy technology from Europe, including a 50-point rotary parlour, the family hired a team of nutritionists to help them optimise cow diets.

 

Today, cows are fed a ration of alfalfa, corn silage and concentrates which are grown especially for the farm under contract to ensure their quality.

 

Animals have activity monitors to pick up early signs of health issues, while physical checks are carried out three times a day during milking. Unwell cows are given homeopathic and Ayurveda treatments, a form of Hindu medicine.

 

The family’s strict attention to health has helped them cut the need for antibiotics to such an extent that they recently became the first antibiotic-free herd in India — an important accolade in a market where consumers are concerned about safety and quality.

Having driven so many improvements in their herd, the Shahs realised their milk quality had improved so much, it was superior to anything else on the Indian market.

 

And with an expanding middle-class increasingly interested in premium, quality products, they realised they could capitalise on it.

 

“In 2012, we turned our research and development centre into a commercial one and set up India’s first ‘brand by invitation’, where we invited people to be part of the dairy,” says Ms Shah.

 

“It is a subscription model and, to become a customer, you need to be referred by other customers. It adds exclusivity that people want to be part of and they are prepared to pay three times the price of usual milk for it.”

 

In a country which struggles with freshness due to poor infrastructure and problems with quality — last year 70 per cent of India’s milk was found not to meet food safety standards — Pride of Cows focuses on traceability and freshness.

 

Every stage is managed and tracked by the dairy, with milk delivered by GPS-tracked cold storage vehicles to one of 22 depots in four cities.

 

The bottles are then hand delivered in insulated bags by a team of 1,200 delivery boys to almost 50,000 consumers, who order milk using a smartphone app.

 

To build a premium consumer base from scratch, the family made a list of their top 100 dream customers, including celebrities, socialites and business people.

Service

 

“We approached them and told them about the service and, very quickly, those 100 people led us to our first 1,000 customers,” says Ms Shah.

 

“We are primarily targeted at discerning milk lovers who are prepared to pay for quality,” she adds.

 

“They are mostly urban sophisticated housewives with high disposable incomes who think their families deserve the best.

 

“Our brand communicates the idea of moving up in life. The concept is you have taken that step up, so now the milk you drink should be as good as the things around you.”

 

Given the product’s elite status among wealthy shoppers, subscribers regularly post photos of their milk on social media — helping the dairy promote its milk with very little effort.

 

Ms Shah says: “We also send out limited edition packs during festivals and special occasions, which encourages people to share photos. Buying the milk creates a statement for them.”

 

Having built up a strong customer base in India, the family now want to expand the brand further.

 

In January, the dairy agreed a deal to airlift milk every day to Singapore and Dubai, where discerning customers are also keen to buy into the Pride of Cows story.

 

It might not sound an environmentally sustainable model, but Ms Shah says the dairy has excellent green credentials, generating its own electricity through biogas and fertilising feed crops with manure.

 

Known as a zero-waste farm, the business also sells milk in recyclable bottles, which it collects and makes into shoes and T-shirts to be donated to under-privileged communities.

 

“It has been a seven-year journey, but we have doubled our yields and touched more than a million households during that time,”

 

Ms Shah says: “For a bottle of milk, it is an incredible achievement.”

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