Page 23 - Dairy Dimension - July Aug 25
P. 23

| 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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