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Indian dairy produce contributes significantly to around 26% to total agriculture GDP. About
6 crore rural households in India are dependent on dairying for livelihood and income, more
than 70% of which include small, marginal Approximately 11,000 people are employed in
procurement, processing and packaging of 1 lakh litres of milk. Indian dairy industry is
expected to overtake the information technology sector as the largest employment generator
by estimate annually. This is due to the fact that the IT sector being largely an urban
employment generator, dairy is expected providing employment in rural areas. Metropolitan
cities are reported to have as many as 30 profitability of the private dairy sector.
With per-capita milk availability of 370 gm per person/per day, compared to world’s per
capita milk availability of around 260 gm per person/per day; both domestic and international
players are entering the dairy industry attracted by the size and potential of the market. The
domestic demand is on the rise for value paneer, Lassi, yoghurt, probiotic drinks, etc. The
development of the Indian dairy is also facilitated by improvements in the milk procurement
network. The market is likely to reach a value of ₹ 18,599 billion by 2023, with a CAGR of
15% during 2018 CRISIL predicts a 50% faster growth in the value years, and such products
would reach 14 years. The Government of India has introduced various schemes and
initiatives aimed at the development of the dairy sector. The National Dairy Plan (Phase I) is
one P scheme aimed to improve cattle productivity and increase the production of milk,
expand rural milk procurement infrastructure, and provide greater market access to farmers.
Dairy cooperatives account for the major share of processed liquid milk marketed in the
country. Milk is processed and marketed by 170 milk producer’s cooperative unions, which
federate into 15 state co-operative milk marketing federations.
The dairy board's programmes and activities seek to strengthen the functioning of dairy
cooperatives, as producer-owned and controlled organizations. NDDB supports the
development of dairy co-operatives by providing them financial assistance and technical
expertise, ensuring a better future for India's farmers.
Over the years, brands created by cooperatives have become synonymous with quality and
value. Brands like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan).
Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among those that have
earned customer confidence.
Apart from making India self sufficient in milk, these dairy co-operatives have established
our country as the largest milk-producing nation in the world.
The company ensures delivering the highest quality of milk to its customers. For this the
company is paying attention to all the three aspects- procurement, processing and
distribution.
Procurement:
On the ground, procurement team consists of outstanding dairy professionals who have over a
decade of experience in Milk Procurement System. A milk procurement network has been
setup in the nearby villages of Bihar for procurement of milk. Earlier, the company had a
manual milking process where it owned cows and sold unbranded milk in cans. With initial
sales of 300 litres which reached 1,000 litres in six months, they saw a turnover of ₹ 26 lakh.
Processing:
Similar to the procurement wing, processing facility at OSAM dairy is of the highest
standards. The OSAM team is ensuring that the plant is of very high standards managed by
competent and experienced professionals who care about both, the nutrition and safety of
milk.
The company owns two processing plants at Patratu (in Ranchi) and Chandil (in Jamshedpur)
along with three chilling centres at Barbigha and Begusarai in Bihar and Ramgarh in
Jharkhand.
Milk is collected from farmers by Dairy Promoters (DP). The company has set up Gram
Dugdh Sangrahan Kendras (GDSK) where the farmers bring their milk in cans. Stellaps cloud
storage is used for real time accuracy of the milk. The software tells about the Fat, SNF and
TS content in the milk along with the weight and quality of the milk and also the amount to
be paid to the farmers. DPsthen send the collected milk by insulated tankers to the chilling
plants. The milk is then sent to the processing plants in Patratu and Chandil. The Patratu plant
has a capacity of 60000 litres of milk per day while the Chandil plant has a capacity of
100000 litres of milk. The milk is transferred from the tankers to the silos which can store up
to 20000 litres of milk each. Patratu plant has 3 such silos. When all the three silos are full,
the tankers are kept on hold. The milk is then sent for pasteurization where it is heated upto
85degrees and then immediately cooled down to 4 degrees.
Distribution:
The distribution system has been developed such that quality milk reaches its customers in its
purest form. After pasteurization, the milk is packed and is send for distribution.Osam dairy
follows a two level channel of distribution which consists of distributors and retailers. Milk is
sent to the distributors in insulated vehicles which maintain a temperature of 8 degrees to
avoid spoiling and curdling of milk. The company had a network of 423 distributors and 4200
retailers by the end of FY 2018-19 who were supplied milk and other products of osam dairy
from the distributors as per their orders.
Our vision “to create a dairy brand which inspires confidence amongst the consumers for its
unfailing quality, outstanding processing infrastructure giving the most hygienic products
which offers value for money. We want to be a part of consumers’ every meal based on
binding trust generated through the use of our products”
Figure 3.2
Figure 3.4
Osam presents a good number of products to its customers. So in a way customers are
presented with a variety of choices to choose from. The different products which are there in
the market are:
3.2.7.1 MILK:
TONED MILK
Toned milk is the one which has lower content of fat. Toned milk is a method, developed
in India, of treating cow’s milk by adding skim milk, powdered skim milk and water to cow’s
milk. This process decreases the fat content, increases the quantity of available milk, and
'tones up' the non-fat solids level to the original amount. The cost of the milk is reduced,
making it more widely available and not a luxury purchase.
Cow’s milk has a fat content of about 7-8%, and contains calcium and a non-fat solids
content of 9-10%. By reducing the fat content to 3% through the toning process, the available
milk quantity is nearly tripled.
STANDARD MILK:
Standardized milk is a product, whose fat and/or solids-not-fat (SNF) content have been
adjusted to a certain pre-determined level. Under the PFA Rules (1976), the standardized
milk for liquid consumption should contain a minimum of 4.5% fat and 8.5% SNF
throughout the country. The standardization can be done either by partially skimming the fat
in the milk with a cream separator, or by admixture with fresh or reconstituted skim milk in
proper proportions.
Similarly like toned milk there are variants available in the market i.e. 500ml (Rs.21) and
1000ml (Rs.42).
GOLD MILK:
Gold milk as the name suggests it is the thickest of all the milk variants of Osam available in
the market. It is pasteurized milk which meets the PFA standards for respective milk type. It
is usually available in 500ml (Rs.24) in the market.
3.2.7.2 DAHI:
Dahi is next most important product which creates a strong market demand. It is very
important product which is in demand throughout the year. There are different types of dahi
available in the market.
PLAIN DAHI:
To satisfy public demand and present them with a good number of options plain is available
in cups as well as in pouches.
Size CUPS( MRP) POUCHES(MRP)
80 gm Rs.10 Rs.10
180 gm Rs.20 Rs.20
400 gm Rs.40 --
500 gm -- Rs.35
1 kg -- Rs.50
MISTI DAHI:
Misti dahi is a fermented sweet doi (yogurt) originating from Bengal. It is made with milk
and sugar/jaggery. It differs from the plain yogurt because of the technique of preparation.
Misti dahi is prepared by boiling milk until it is slightly thickened, sweetening it with sugar,
and allowing the milk to ferment overnightt. It is available in cup size of 80 gm pack, priced
at Rs.10.
3.2.7.3 LASSI:
Lassi is one of the most demanding products during summer. It is available in a pack size of
180 ml worth Rs.10.
3.2.7.4 PANEER:
Paneer is one of the products which are available for the customers in a pack size of 180gm
costing Rs.58. It is one of the best products available in the market.
OSAM DAIRY MODEL
Collection points
Amul (Anand Milk Union Limited) and Kurien's strategy hinged on dairy cooperatives that
ensured farmers were treated fairly and were paid well for their milk. Further, neither Amul
nor any of the intermediaries owned the cows.
Osam is not a dairy cooperative, but largely follows a similar strategy in the way farmers are
treated.
Osam sets up milk collection points in villages, and farmers can go there to drop off the milk
they have collected from their cows. Payment is made instantly and at rates higher than those
offered by traders in the markets.
This way, Osam's milk collection points, like Amul's, do not leave much incentive for
farmers to go to markets where they might be subjected to exploitation and manipulation by
traders.
If a consumer in a village is buying directly from a farmer, there is usually no way of telling
if the farmer has adulterated the milk to increase his margins. If a consumer is buying from a
trader or retailer, there is still no guarantee the milk is unadulterated, and further, he/she
doesn't know if the farmer has been compensated fairly for the milk. Therefore, farmers
selling milk to Osam is beneficial for the consumer.
Millions of Indians still buy directly from farmers or traders, and in 2018, it was reported that
around 68.7 percent of milk and milk products sold in the country were not as per standards
laid down by the Food Safety and Standards Authority of India (FSSAI).
We also differ from the Amul model in terms of payments. We have invested in technology
where we provide farmers with a card made by a IoT company in Bengaluru," Abhinav
explains.
"The farmers swipe the card whenever they bring their milk to the collection point. After
swiping, all the information goes to a cloud-based system where the data is recorded. This
way, we are able to give direct and digital payments to the farmers in over 100 villages," he
adds.
With this model of milk collection, Osam claims it is present in over 500 villages in the
region.
"At the village level, we also conduct training programmers to help farmers improve the
quality and quantity of the milk. Osam also provides extension services such as provision of
cattle feed, deworming, vaccination, insurance, etc," Abhinav says.
The Patratu plant is a 50,000 litre, fully-automated processing plant where no physical human
touch is required, the company claims.
At the plant, certified dairy technicians oversee the pasteurisation, processing, and packaging
of the milk, to which no preservatives or chemicals are added, the company says.
Harsh Thakkar (42), Director, Sales and Marketing, the co-founder that stayed with the
company, says:
"Once the packaging is done, we follow the standard FMCG model where we work with
distributors. This, we sell in 14,000 retail outlets in 24 districts in Jharkhand and six districts
in Bihar."
"Currently, we have 15 percent market share in Jharkhand, while Sudha milk has around 80
percent. Recently, Amul also entered in Jharkhand. We held on and didn't lose our share to
Amul. Instead, we took some of the market from Sudha. Now, ITC has entered BIhar with its
Aashirvaad milk brand," Harsh explains.
To stay competitive, Osam is targeting all members of the household, primarily mothers,
because they are the decision makers in this regard, Harsh adds.
"Osam is also running a campaign targeted at mothers where the milk's purity is emphasised
and likened to mother's love. We are building our brand across all marketing and digital
channels including websites, social media, and SMS," he says.
After building its foundations with milk, Osam Dairy ventured into making value-added dairy
products such as dahi (curd), paneer, lassi, peda, and more.
Over the years, Osam also setup/acquired and commissioned dairy plants, for which it
approached venture capitalists for funding.
"So far, we have raised funding from Aavishkaar Ventures, Lok Capital, and CDC Group.
Aavishkaar was the most receptive," Abhinav says.
After raising its Series C round of funding recently, Osam is set to expand aggressively in
Bihar and open a processing plant in the state. The company also plans to start making
flavoured milk products and Indian sweets.
However, Abhinav and Harsh remain wary of the consequences of expanding too quickly.
"When we were a new business, we expanded too fast and almost went bankrupt twice. Our
financial estimations were wrong, and we raised money at just the right time to save the
company," Abhinav explains.
Another challenge remains ensuring the health of cows. Abhinav says a company farm once
faced the death of 26 diseased cows out of a herd of 40.
"The cows had been moved to a different location and could not adjust. This is why they got
diseased and died. We overcame this by acquiring cows from a location right next to the
farm," Abhinav says.
Keeping these challenges in mind, Osam is confident of growing its revenue and expanding
its market reach. "Next year, we are targetting Rs 180 crore. By 2024, our aim is to have a
revenue of Rs 500 crore just from Bihar, Jharkhand, and West Bengal," Abhinav says.
Product:
The product strategy and mix in Mother Dairy marketing strategy can be explained as follows:
Mother Dairy is a leading brand offering milk, milk based products & other food items in India.
Mother Dairy product portfolio is majorly divided based on the three brands Mother Dairy, Dhara
and Safal. These brands cover the product strategy in the marketing mix of Mother Dairy.
Mother Dairy, the parent brand is mainly concerned with the whole dairy product range. The
product depth and length is quite extensive creating a huge over all product range. The Mother
Dairy product range is categorised into milk ,milk products and ice creams segments. The milk
segment consists of bulk vended milk, poly packed milk, ultra heat treatment milk. The Mother
Dairy milk products segment comprises of different types of curds, probiotic drinks, paneer,
butter, cheese, ghee, cream, sweets, lassi, butter milk etc. The ice creams segments consists of
various classic flavours, Indian versions such as kulfi and sugar free variants.
Safal which majorly deals in fruits and vegetables has wide variety of products comprising frozen
vegetables and snacks, juices and drinks, jams and marmalades, pickles, tomato ketchup and
puree, honey and unpolished pulses. It also caters to daily needs of fresh fruits and vegetables.
Dhara which deals in edible oils has various cooking oils like groundnut oil, olive oil, soya bean
oil, sunflower oil, vegetable oil and different variants of mustard oils. All these cover the
offerings of Mother Dairy.
Price:
Mother dairy a very penetrative pricing strategy. Since its suppliers are farmers and cooperatives
and needs to support them, milk prices change with inflations and certain amount of fluctuations
are visible in Mother Dairy milk prices. Mother Dairy also maintains a differential pricing
strategy in its marketing mix and varies according to geographical regions. Prices also vary with
packages and variants of milk. Other milk products also have similar situations and we can see
pricing done according to rising prices of other input factors. In the Mother Dairy ice creams
segment, it keeps for regular ice creams competitive prices and premium prices for other special
flavours. The Safal brand also dealing with fresh fruits and vegetables keeps market based prices.
But many products under its brand faces huge competition and hence it maintains competitive
prices. The edible oil sections under brand Dhara faces a lot of competition from many brands
and hence as loyalty of customers is based on price and quality. As Mother Dairy has a huge
infrastructure it can compensate the costs with large volumes of products.
Place:
Mother Dairy has a wide presence across India. In the milk industry, distribution is quite a critical
part of the business and hence to tap into various regions all over the country it has 1400 retail
outlets and and 1000 exclusive stores in place. As its suppliers are farmers and cooperatives, it is
able to save on other middle men costs. Since Mother Dairy deals with a perishable which needs
refrigeration and has very less shelf life, it produces as per demand of the regions. After being
brought in from the farmers in tankers or being collected at the collection centres, it goes on for
processing in the plants and then on it is delivered to it Local Area Distributors. These Local Area
Distributors then send it to its exclusive Mother Dairy booth, convenience stores, supermarkets
and other smaller retailers. Since consumers are able to find to Mother Dairy booths very close to
their homes, it has built customer loyalty and preference.
Safal and Dhara also go through the same supply chain before it could reach the retailer to the
consumers.
Promotion:
The promotional and advertising strategy in the Mother Dairy marketing strategy is as follows:
Mother Dairy has adopted a subtle yet effective marketing strategy. As it is facing stiff
competition from national player Amul, Mother Dairy has moved onto smart marketing strategy
wherein it is working on better communication strategies. It is now coming up with various
advertising strategies to gain customer’s mind share. Recently Mother Dairy has come up with
‘Tweet to Farmer’ campaign where we thank them for giving us milk. It has roped in a mascot
Makhan Singh which is targeted on the kids for various products like cheese, butter and milk. The
Mother Dairy ice creams have also been quite popular because of TV commercials. Safal also
takes help of green and environment friendly themes for selling many of its products. Dhara
brand has been on TV commercials from quite a long time. It also has tied up with Paytm and
UPI for cashless payment at its booths and hence showing it is technologically updated. Hence,
this covers the entire Mother Dairy marketing mix.
SWOT Analysis is a proven management framework which enables a brand like Mother Dairy to
benchmark its business & performance as compared to the competitors and industry. Mother
Dairy is one of the leading brands in the food & beverages sector. The table below also lists the
top Mother Dairy competitors and elaborates Mother Dairy market segmentation, target group,
positioning & Unique Selling Proposition (USP).
Table of Contents +
Mother Dairy SWOT, Competitors, Marketing STP & Brand analysis Table
Parent Company
National Dairy Development Board (NDDB)
Category
Milk and Food Processing
Sector
Food & Beverages
Tagline/ Slogan
Piyo Pure
USP India’s very own producer of milk, milk products, beverages, foods, etc. at
affordable rates and of premium quality
Segment
People who need dairy products and other day to day food products
Target Group
Middle and upper middle class families
Positioning As a foods and dairy brand that has products of high quality at affordable
price, with fair returns to the producers
The brandguide table above concludes the Mother Dairy SWOT analysis along with its marketing
and brand parameters.
Similar analysis has also been done for the competitors of the company belonging to the same
category, sector or industry. Browse marketing analysis of more brands and companies similar to
Mother Dairy. The BrandGuide section covers SWOT Analysis, USP, STP & Competition of
more than 6000 brands from over 20 categories. This SWOT and marketing analysis has been
researched & authored by our BrandGuide Research Team members.
Set up Dairy Farm-----------------------> April 2012
Started Milk procurement from 1st chilling plant in Barbigha, Bihar from 40 villages----------
---->March 2015
Commissioned the first plant in Patratu ( Near Ranchi), capacity of 50,000 ltrs------------------
-> May 2015
Started the second chilling center in Begusarai with real time data collection through an IOT
system.
Feb 2017
Commissioned the second plant with 80,000 Ltrs capacity in Chandil, near Jamshedpur.
October 2017
Launched our own CRM app & geo tagged all 5000 retailers in the app.
Reached 50,000 ltrs of Milk sales per day.
January 2018