Following its successful initial Public Offering (IPO), Milky Mist Dairy Foods Ltd.’s strategy reflects a change in consumption pattern. K Rathnam, whole-time director and CEO, Milky Mist Dairy Food Ltd., points out that consumers are increasingly looking for options rather than staying with one or two brands. “Gujarat was traditionally considered a difficult market for dairy companies, but that is changing as consumers increasingly seek varied brands and a wider choice of products,” says Rathnam. This shift is reflected in Milky Mist’s portfolio of 22 product categories and more than 640 stock-keeping units (SKUs), spanning paneer, cheese, butter, yoghurt, ice cream, milkshakes and other dairy products.
The economics of the dairy market are also shaping Milky Mist’s strategy. While the conventional pouch milk segment is growing at around 5 per cent, value-added dairy is expanding at nearly 15 per cent year-on-year. The sharp difference has strengthened the company’s decision to stay out of the pouch milk business and focus instead on higher-growth categories which offer stronger consumer value.
Paneer opens an organised opportunity
Paneer remains Milky Mist’s flagship product. It contributes around 28 per cent of its revenue and also offers significant headroom for organised players in the broader market. As consumers become more conscious about quality and safety, there is a clear opportunity for organised players,” according to Rathnam. The overall paneer market is estimated at nearly Rs 1 lakh crore, and about 90 per cent is still unorganised. The fragmented nature of the market also raises concerns around quality. Regulatory action against analogue paneer and other analogue dairy products in states such as Maharashtra, Gujarat and Uttarakhand further strengthens the position of organised manufacturers.
Beyond paneer, Milky Mist is looking to build its next phase of growth across a much broader value-added dairy portfolio. Protein is emerging as another focus area. Milky Mist already offers high-protein paneer, cheese, Greek yoghurt and skyr yoghurt. The company is also working on extracting protein from cheese whey to develop protein-based products.
South India contributes around 69 per cent of Milky Mist’s business, but the company aims to build a 60:40 south-north business mix by 2030. It has acquired land in Maharashtra for a proposed facility. “Everything is in the drawing board stage,” says Rathnam. Meanwhile they strengthening its distribution which has more than 140-plus physical outlets, 14 per cent online sales and quick commerce. India’s vast consumer base presents a significant opportunity, but reaching diverse markets remains the challenge. “How are you going to reach? It can be seen as a challenge or opportunity,” pointed out Rathnam, as Milky Mist targets a pan-India presence.