Six years ago, when Samarth Setia was doing his final year of electrical and electronics engineering graduation course in Bengaluru, he chose to talk to a milk vendor about the challenges the latter faced as part of his project.

He and his classmate developed an app to tackle the challenges by getting to know the vendor’s problems from producing to supply to collecting payment. The vendor found it to be a considerable relief from his daily problems, and soon, it was referred to other milk vendors too.

Setia realised that this was a enormous large challenge to be addressed across the dairy industry and floated Orange Tree Tech Pvt Ltd to further work on his product. This led him to come up with Mr Milkman, a last-mile dairy supply chain SaaS (software as a service) platform to manage customer subscriptions and deliveries.

Challenges galore

The platform became real-time analytics, offering dairy firms a single integrated supply management solution from the farm to the end consumer, trading production, quality, supply and performance overview.

“We talked to various firms and understood that there were so many challenges in the dairy supply chain. Orders are taken on the phone and passed on in a slip of paper. No one knew how many crates were dispatched, there was leakage, theft and payment issues,” said Setia, now the Chief Executive Officer (CEO) and co-founder of Mr Milk Man.

The platform has helped some dairy firms become so efficient that they now even get predictive analysis for the next seven days. “Our solution even gave details on which routes were profitable and reasons why some routes were loss-making. We have even allowed the firms to connect with consumers, who can place orders directly,” he said.

Enter the US firm

Mr Milkman’s platform turned out to be pretty handy, resulting in Setia’s firm getting over sixty large and medium dairy brands as its customers in three years. “While different brands interact with thousands of farmers on a daily basis, at least 50,000 customers order through our platform for direct consumption,” the Mr Milkman co-founder said.

This, then, drew the attention of the US-based Dairy.com, a leading provider of technology, services and intelligence platforms, to the dairy industry in America. Two months ago, the US firm, the largest independent supply chain technology provider, acquired Mr Milkman to make its first investment in India and the first dairy/agtech acquisition in India by a global player.

“Nearly 50-60 per cent of all the milk supplied in the US is tracked through Dairy.com’s system. We have entered India impressed with Mr Milkman and we need to tweak the technology we plan to bring to India with the needs here,” said the US firm’s Chief Solution Officer Ryan Mertes.

Why India

Dairy.com, which is looking to do more than investing or bringing its technology to India, wanted to get into the Indian market mainly since India is the largest milk producer, making up 22 per cent of the global production.

“Ground presence is invaluable. That’s why we began to invest and procure office space. We plan to double employment and invest in technology to let the Indian dairy sector flourish,” said Mertes.

Dairy.com will bring in unique solutions to help the dairy sector improve its margins and reduce hidden costs. Currently, the margin in the industry is skinny, given the various challenges from the farm to the dining table.

Mertes said the US firm brought in a unique dimension since working with various dairy plants in the Americas. “We can provide some of the best practices as an idea to our customers. We can even help reduce the shrink factor in dairy companies that will help them save quite a reasonable sum.

“For example, when milk fat is turned into a product, the shrink factor due to waste is two per cent. If we can help customers to reduce it to one per cent, it will result in a saving of ₹1 crore for a firm handling one lakh litres,” he said.

Providing traceability

While bringing US and EU software solutions, Dairy.com will hire experts in the first phase to learn the software. They will, in turn, talk to the brands or customers and make them understand the issues, challenges and solutions.

“Phase I A will be to develop this and invest in our development,” Mertes said.

Dairy.com “partnership” with Mr Milkman will provide full traceability of the milk supply chain, best practices, sustainability and last-mile solution. “We are the only software firm to connect the supply chain from the farmer to the end-user,” the Dairy.com Chief Solution Officer said.

Setia and Mertes said the Indian dairy sector had scope for high growth since 80 per cent of it was unorganised. “The growth in the dairy sector getting organised is in double digits and farmers also need the latest technology to improve production,” Mertes said.

“Most Indian clients are setting up units in tier II and III cities. This is a good sign of the sector expanding,” Setia said.

Middle-class promise

“India has an increasing middle class which has a growing need for value-added products such as cheese and other cultured products. In the US, the dairy sector moved from an average holding of 10 cows (cattle heads) to 220 now. It will happen in India soon,” the US firm’s official said.

The Indian dairy sector will scale up faster with all data digitised they are being harvested, he said.

Setia said India had 75 million farmers with an average cattle size of two, and thus, they faced problems typically that small farms face. “We are trying to prepare the dairy sector to face all upcoming challenges,” he said.

Mr Milkman will soon introduce an app that will ensure automatic payments to dairy farmers. “The payroll for farmers will be based on the quality they supply to our clients,” Setia said.

Dairy.com plans to set up a centre of excellence in India that would provide solutions for the dairy sector across the globe. “We want to provide smart solutions to our customers by working faster. The centre will work 24X7 with US and EU software solutions,” Mertes said.

Setia said they were evaluating Gurugram in Haryana, next door to national capital Delhi, to set up the centre but were looking at South Indian cities too, particularly Bengaluru.

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