Food Marketing and Technology Magazine in an interview with Dr K Rathnam, CEO, Milky Mist, asked him about the company’s future plans and the future of the dairy industry.
The company has 150 SKUs and is present in the entire South India states as well as in Goa, Maharashtra, the North East, Orissa besides other states.
1. Could you tell us about your past association with international organisations such as FAO, UNICEF? What was the learning?
I have been associated with FAO and UNICEF for development of ready-to-usetherapeutic food for severely malnourished children. The project was to develop a product which was superior than what was developed and manufactured by others and to produce and supply the same to UNICEF under annual contract mode. My second assignment with FAO was to guide them for development of cold chain for milk for the third world countries. In both the assignments I was closely associated with international agencies as well as experts. The best learning from both these assignments was how international agencies are working towards humanity and upliftment of the under privileged. Through my association I could, in a small way, contribute in their endeavour to overcome nutrition deficiency
2. Your present role as CEO of Milky Mist Dairy what are your top priorities?
As CEO of Milky Mist, my top priorities are :
- bringing latest technology
- development of innovative products
- expand the company’s market and make Milky Mist a pan India brand.
3. How do you source your milk and make sure that you get quality raw material?
Milky Mist sources milk directly from the farmers. We do not have any agent system in the entire operations. We also have clean milk programme implemented at village level which is being monitored and controlled by a well trained procurement team. We have direct interaction with the farmers who are covered under financial We have the best analytical equipments both at the farm level and at the plant level thereby ensuring quality raw material.
4. With over 150 SKUs you have a large basket of products. What is the mode of distribution and which states are you available?
With 25 products and more than 180 SKUs, we have a basket full of products starting from breakfast to dinner table. We have our own logistics which takes care of moving the products from the manufacturing plant to the end consumer with utmost emphasis on quality and hygiene. We are present in entire South and also Goa, Maharashtra, North East, Orissa and also other territories.
5. What is your thoughts on the ever growing D2C market?
Currently, a small portion of our products are marketed through e-commerce.
This segment is growing and some of the small and mid-size companies are looking at this option. However, Milky Mist is not looking at this segment as a major one.
6. With increasing number of dairy companies launching packaged sweets such as barfi, ladoo. How do you think it is going to impact sweets and snacks outlets who have been doing that for years?
Since the last 5 to 8 years, consumers are shifting from loosely packaged unbranded products to branded packaged food products. The shift is due to awareness about product quality and branded products and also inferior quality of products due to compromise in its ingredients and adulteration. This happens especially during festival time. Consumers with health issues are moving from high sugar content products. They are looking for healthy, branded products and this trend is likely to continue in the years to come. Exponential growth in confectionery or chocolates is also witnessed where one finds gifts from visiting guests in the form of chocolates rather than getting 500 gms or one kg of traditional sweets.
7. What scope do you see for milk based value added products in India?
India is a predominantly milk country with more than 60% liquid milk being sold as milk. However, in the long run, like any other developed country, there is a limitation there is a limitation in respect of consumption of milk because of various reasons such as acceptance, trust, etc. with increasing affluent sections opting for milk and economically weaker people looking for VADPs looking for health benefits. We see consistent demand for VADPs going forward. Milky Mist is one such company where we sell only VADPs.
8. There are a number of start-ups in milk space with the value proposition of better healthy milk with least processing? Are they going to disrupt market, especially, in cities and people are becoming health conscious?
Traditionally our consumers are used to buying milk from local milk vendors who own a few cows and deliver the milk at their doorsteps. This space is also taken over by a large number of start-ups branding them as Special Milk or A2 Milk procured from a single farm. However, the volume of such milk is very less and it will be difficult for such start-ups to sustain this mode of business in the long run unless they expand their activities to a large number of customers. Moreover, such operations involve huge amount on logistics and they pass on the burden to the end consumers. Consumers also do not buy such milk at higher prices for the entire family. The recent trend is that such highly priced milk is bought for younger persons and elders prefer packaged, normal branded milk.
9. You had been part of Amul for 15 odd years from being manager QC to MD? Could you tell us about your journey and experience being in one organisation?
I have been part of Amul for 23 years from 1995 to 2018 starting as Deputy Manager (Product Development) to becoming Managing Director during the last 4 years of association with Amul. I also had a stint of about 20 months with one of the MNCs. Serving in one organisation for a longer period gives an insight knowledge about the work ethics and culture of the organisation. Also, if one finds growth and career prospects at the same time, there is no harm in sticking to the organisation. I am of the strong belief that frequent change of jobs may bring money but not in depth knowledge and experience in the particular domain.
10. Accordingly to you what is going to be the food trends in 2022?
Post COVID, we are experiencing a gradual shift in consumer preference from loose, unbranded products to packaged and branded products. People are also looking for such products for their wellness and health. This trend is going to continue in the future also.
11. How do you see the Indian milk industry growing?
Indian dairy sector is growing at 5% to 6% YoY and will continue to grow similarly till 2030. However, what I feel is more and more private players are becoming aggressive and bringing out innovative products and marketing strategies. I anticipate shift to processing of liquid milk to VADPs. There will also be more of products like cheese and protein based products like Paneer and Yogurt.
12. Your message to start-ups?
There have been lot of start-ups in Dairy sector and quite a large number of them are coming out with innovative ideas and products. Funding has also become easier for start-ups with better ideas. If they channelise their ideas properly, they will grow and become big and also will be able to sustain their business.