Company plans A2 milk ghee launch as part of broader value-added dairy strategy
Milkfood Limited is expanding its presence in India’s premium dairy segment with plans to launch ghee made from A2 milk, as the company looks to capture growing consumer interest in differentiated and value-added dairy products.
The proposed A2 Ghee launch forms part of Milkfood’s broader strategy for FY2026-27, which combines premium product development with manufacturing capacity expansion, improved asset utilisation, energy-cost optimisation and financial discipline.
Focus on premium and value-added dairy
Milkfood said changing consumer preferences are creating opportunities beyond conventional dairy staples. Consumers are increasingly showing interest in products positioned around quality, provenance and traditional dairy practices.
Ghee remains an important dairy category in Indian households, with strong links to traditional food practices and regular consumption. Milkfood intends to position its A2 Ghee as a premium offering for consumers seeking differentiated dairy products.
The company expects the product to complement its existing portfolio while helping improve product realisations. Rather than depending entirely on volume-led growth, Milkfood is increasingly focusing on value addition and premiumisation within its dairy business.
₹20 crore investment in Patiala facility
The premium product strategy is being supported by a significant investment in Milkfood’s manufacturing infrastructure.
The company is investing approximately ₹20 crore at its Patiala plant to establish a dedicated butter manufacturing facility. The investment includes the acquisition of a Continuous Butter Machine and the development of a Butter Cold Room.
The company expects the investment to strengthen its butter manufacturing capabilities while providing greater flexibility and capacity to expand its value-added dairy portfolio.
The Patiala investment is part of Milkfood’s wider effort to improve capacity utilisation and create an operating base capable of supporting future growth.
Moradabad plant sale supports financial discipline
Milkfood has also been reallocating capital from existing assets towards its current growth priorities.
During FY2025-26, the company sold its Moradabad Plant at Agwanpur for approximately ₹130 crore. The proceeds were used for loan repayment, working capital requirements and capital expenditure at the Patiala facility.
This asset monetisation strategy is intended to reduce financial leverage while directing capital towards productive capacity and growth opportunities.
| Key development | Details |
|---|---|
| Proposed new product | A2 Milk Ghee |
| Investment | Approximately ₹20 crore |
| Investment location | Patiala, Punjab |
| New infrastructure | Butter Plant, Continuous Butter Machine and Butter Cold Room |
| Moradabad plant sale | Approximately ₹130 crore |
| Energy initiative | Shift from rice husk to parali |
| Solar investment | 500 kWp captive solar plant |
| FY2026-27 job work revenue target | Approximately ₹30 crore |
Energy efficiency becomes another priority
Alongside its product expansion plans, Milkfood is pursuing measures to reduce operating costs and improve energy efficiency.
The company plans to transition its boiler fuel from rice husk to parali, or paddy straw and agricultural residue. The initiative is expected to improve the utilisation of agricultural waste while helping optimise energy costs.
Milkfood is also installing a 500 kWp solar power plant for captive consumption as part of its efforts to improve energy efficiency and reduce dependence on conventional energy sources.
Expanding job work operations
Milkfood is also looking to increase its job work business, with revenue from the segment expected to reach approximately ₹30 crore during FY2026-27.
The company’s strategy therefore extends beyond the planned A2 Ghee launch. It combines premium product development, manufacturing expansion, asset optimisation, energy management and additional revenue opportunities.
Building a more value-focused dairy business
Milkfood’s planned entry into A2 Ghee comes at a time when premiumisation is becoming an increasingly important theme in India’s dairy industry. Value-added products can provide dairy companies with opportunities to differentiate their portfolios and potentially generate stronger realisations than traditional commodity-oriented products.
With its Patiala investment, asset monetisation and sustainability initiatives, Milkfood is attempting to balance expansion with financial and operational discipline.
The company’s FY2026-27 strategy indicates a shift towards higher-value dairy products, stronger manufacturing capabilities and improved resource efficiency, with A2 Ghee expected to be one of the new additions to its premium portfolio.
