Hyderabad-based dairy company Kiaro is set to start home delivery of milk in Bengaluru this week, joining Milk Mantra, Parag Milk Food and Vinod Khosla-backed Moksha Yug in a business model that touts product freshness and purity as selling points.
The company has signed up 100 customers at apartment complexes in the city’s suburb, Whitefield, after retailing for a year. Kiaro has been into home delivery since inception three years ago. Apart from retail stores and hotels, it sells its products to 1,600 customers in Hyderabad everyday. “DTH (direct-to-home) is a committed sale. I don’t want to only go to a store and wait for someone to pick it up,” said Sharath Chandra Red dy Gattu, chief executive of Kiaro. The home delivery model is being tried by a handful of dairy companies. Three years ago, Aavishkar-funded Odisha-based Milk Mantra launched its brand ‘Milky Moo’ in Bhubaneshwar and Cuttack, while Maharashtra-based Parag Milk Foods, which sells milk and milk products under the ‘Gowardhan’ and ‘Go’ brands, introduced its home delivery brand ‘Pride of Cows’ in Mumbai and Pune. It now plans to bring it to Delhi and Bengaluru by 2016.
Kiaro’s milk, packaged in plastic jugs, is priced between Rs 65 and Rs 69 a litre, while its competitors’ products range between Rs 75 and Rs 80. “DTH is a service customers a willing to pay a premium for, but not over 5-10 per cent for SIDDHARTH a daily consumable product. It (DTH) is a niche experiment by some players and as a model it can work if it’s price is competitive,” said Arvind Singhal, chairman, Technopak Advisors, a market research firm.
Kiaro has branded itself on a farm-fresh milk model designed with backward and forward integration. This means it controls quality right from cow feed to last-mile delivery – all set on international standards.
The company has 1,500 acres under contract farming to grow feed for its 1,500 cows, which are managed by 10-12 people on a fully-automated farm. Cows are housed in over 120 acres on ‘freestyle’ barns where they are not fettered, fed in private cubicles with mattresses, aren’t injected with hormones or antibiotics and drink mineral water to maintain pH levels of milk produced.
“Cows are milked twice a day at the rotating parlour and milk is then instantly chilled to 4 degrees centigrade before it goes to our integrated processing plant where it’s pasteurised, homogenised and bottled,” Gattu explained. Kiaro milk is preservative free with a shelf life of three days under refrigerated conditions. The bigger opportunity for DTH model, Singhal said, is in small cities where questions of adulteration and quality come into play.