Page 22 - Dairy Dimension - July Aug 25

| Volume 1 | Issue 5 | July-Agu 2025 ARTICLE | Volume 1 | Issue 5 | July-Agu 2025

extension programmes have raised MBRT levels to 2.5–3
hours, directly improving product quality and consumer
trust. Their ability to align farm-level practices with
urban consumer expectations shows how integration
can drive margins and create differentiation.
The Global Market Lens
Export-oriented processors face a unique test. While
demand for products like skimmed milk powder, butter,
and ghee is rising in the Middle East and Asia,
inconsistent quality undermines credibility. International
buyers often demand traceability and antibiotic-free
assurances—areas where Indian dairies still lag due to
weak integration between procurement and compliance Richi Agarwal
systems. Without farm-to-factory alignment, export
opportunities risk being lost. Richi Agarwal is the Founder of RA Consulting, a firm specialising in
business transformation and process revival in the dairy and agri-food
Opportunities in Deeper Integration sector. With extensive experience advising cooperatives and private
1. Farmer Loyalty through Services processors, she combines farm-level economics with market insights
to help organisations achieve sustainable growth.
Veterinary support, feed advisory, and transparent
pricing models strengthen farmer relationships. premium products, while rural markets prioritise
Cooperatives that combine procurement with training affordability. Balancing both ends requires agility.

Case Study: and healthcare initiatives have successfully retained · Policy and Regulation: Standards enforcement
suppliers.
2. Quality as a Market Differentiator remains uneven, weakening incentives for quality
improvements.
Farm to Factory Integration cold chain logistics raises MBRT, improves shelf life, Lessons for India's Dairy Sector
Investing in functional testing, hygiene protocols, and
in India's Dairy Sector and reduces product returns. Quality is not just 1. Integration is Risk Management: Aligning farmers,
factories, and markets reduces hidden costs and
compliance—it is an economic driver.
3. Consumer-Centric Innovation safeguards margins.
by Richi Agarwal, Founder of RA Consulting 2. Farmer-Centric Models Build Resilience: Loyalty
Urban consumers seek differentiation: probiotic cannot be bought only with price; it is built on trust
Introduction curd, high-protein milk, antibiotic-free assurances. and services.
Integration ensures consumer needs are matched by
India's dairy sector is a paradox. It is the world's largest by volume, producing over 220 million tonnes of milk farm-level practices. 3. MBRT is an Economic Metric: Longer MBRT
annually, yet it struggles with issues of quality, efficiency, and market competitiveness. The gap between farm and translates into extended shelf life, better exports,
factory operations is a major contributor. While cooperatives and private players alike possess infrastructure and 4. Export Competitiveness and consumer confidence.
farmer networks, the lack of integration often results in inefficiencies, product inconsistencies, and lost market share. Aligning procurement practices with global quality 4. Differentiation Sustains Brands: Commodity milk is
standards—antibiotic residue checks, aflatoxin
This case study examines integration challenges across Indian dairies, highlighting systemic issues, opportunities for monitoring, traceability systems—can unlock new easily replaceable; branded narratives around purity,
reform, and the risks of inaction. markets. Integration is the bridge between domestic traceability, or nutrition create stickiness.
production and global competitiveness. 5. Execution Discipline is Critical: Turnarounds fail
not because plans are wrong, but because they are
When Legacy Systems Hold Back Progress and advisory services. Challenges Hindering Integration poorly implemented.
Kalki Dairy, a 70-year-old cooperative in western India, · Products like packaged curd, buttermilk, and ice · Legacy Pride vs Present Reality: Older cooperatives Conclusion
had procurement capacity of over 200,000 litres per day. cream failed to differentiate in urban markets already often resist change, clinging to past success while
Despite this, sales fell by 7–8 per cent annually. The crowded with newer, more innovative brands. consumers and competitors move ahead. Farm-to-factory integration is not a slogan—it is the
reasons were systemic: This illustrates the cost of silos, where procurement, · Capital Intensity: Investments in testing, cold chain, foundation of competitiveness in India's dairy economy.
The Kalki Dairy case shows how silos can lead to decline,
· Stagnant procurement zones meant competitors production, and marketing worked in isolation, and farmer services require significant funding, which while other experiences demonstrate the rewards of
lured farmers away. undermining competitiveness. many cooperatives struggle to mobilise. integration.
· Milk quality was compromised by non-functional How Private Players are Reframing Integration · Governance Discipline: Strategies collapse without As India looks ahead to both modernise its domestic
testing equipment, poor hygiene, and low MBRT In contrast, several private dairies have actively invested execution rigour, weekly reviews, and transparent sector and expand globally, dairies that align farmers,
values (as low as 30 minutes). in quality assurance and farmer support. Automated KPIs. Bureaucratic delays often derail reform. factories, and markets will lead. Those that fail to

· Farmers disengaged due to lack of veterinary support testing systems, cold-chain investments, and farmer · Fragmented Markets: Urban consumers demand integrate risk irrelevance.

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