Imagine running a dairy business that’s losing money daily, with no support from investors or generational wealth to save it. Your competitor? Amul. What would you do?
In 2021, Milky Mist became a company worth over ₹1000 crores. But this success story isn’t just a typical tale of triumph; it provides valuable lessons on how to build a successful brand in today’s competitive market. This is the journey of a school dropout, Satish Kumar, who built a dairy business worth ₹2000 crores, even in the shadow of giants like Amul.
The Beginning: Satish Kumar’s Struggles
Satish Kumar’s story starts in a small village near Erode, where his father and uncle initially worked in handloom but later switched to the dairy business, riding the wave of the White Revolution (Operation Flood). However, despite the booming dairy industry in India, the business wasn’t thriving. They were incurring losses. By 1992, Satish’s father was thinking of shutting down the dairy business. At that time, Satish was in eighth grade, and seeing the struggles of his family, he decided to drop out of school and help his father.
The Turning Point: Adding Value to the Business
Satish quickly identified the reasons behind their losses. First, the profit margins in the milk business were low, and second, milk spoiled quickly, leading to high logistics costs. He realized that value addition could turn the business around. After meeting a Bengaluru-based trader who was not just selling milk but making and selling paneer (cottage cheese), Satish had an epiphany.
Value addition means adding something extra to your product to increase its value, such as turning milk into paneer or ghee. Satish decided to try making paneer, which had higher profit margins, better shelf life, and less competition at that time.
The Growth: Expanding Milky Mist
By 1993, Satish sent his first batch of 10 kg paneer to Bengaluru. At that time, paneer was more popular in North India, and South India was untapped. Satish filled this gap and grew his market. By 1998, Satish officially named his company Milky Mist and invested in semi-automated machines to scale production.
However, expansion wasn’t without challenges. He faced three main obstacles:
- Inconsistent milk quality: The dairy industry was highly fragmented, with many farmers owning only a few cows. Satish launched awareness programs to help farmers improve milk quality and adopted the latest technology.
- Loyalty issues with farmers: Farmers would sell milk to whoever paid them more. Satish solved this by offering farmers access to bank loans and medical care for their cattle, building loyalty.
- Cold storage and logistics: Lack of proper refrigeration was a big problem, as the dairy products couldn’t be stored or transported properly. Satish addressed this by installing 20,000 chiller units in local retail shops and adding cooling technology to transportation trucks.
Challenges and Overcoming Them
As Milky Mist grew, Satish faced new challenges. The supply chain issues were vast, but he worked hard to overcome them. In 2008, Milky Mist became one of the leading companies with one of the best cold storage logistics systems in India.
Today, Milky Mist sells over 300 value-added dairy products, including paneer, milk, curd, and more, with daily production of 60 metric tons of paneer. Over 60,000 farmers work with Milky Mist, which has become a symbol of success.
Key Takeaways:
- Value addition can transform a business: Satish added value to his product by turning milk into paneer, drastically increasing profit margins.
- Collaboration with partners: Satish worked closely with farmers, helping them improve their quality of milk and ensuring long-term loyalty.
- Focus on quality: Even the smallest details matter in maintaining the quality of your products. A slight degradation in quality can ruin your brand.
Milky Mist’s journey teaches us that innovation, quality control, and building strong partnerships are key to success in a competitive market.