One the leading private dairy companies Parag Milk Foods plans to focus more on the sports nutrition segment and health besides expanding the reach of its “Pride of Cows” single source liquid milk.
Akshali Shah, Executive Director, Parag Milk Foods, said, “There is a huge gap in meeting the demand for whey protein and we want to be in the space of health and nutrition. I think we have taken our multiple steps and our first step was setting up the whey protein plant.”
Parag, whose 90 per cent of products are value-added, is the only manufacturer of whey protein in the country sold in “Avvatar” brand name. “We probably have 10 per cent market share of whey protein demand (a major part of the whey protein is imported). This comes in different formats. The biggest use we do is, of course, sports nutrition,” the company’s executive director said.
Meeting baby food needs
Parag, founded in 1992 by Akshali Shah’s father soon after the Centre ushered in privatisation, supplies whey protein to a lot of baby food ingredient companies. “We are probably the sole suppliers to a lot of baby food manufacturers in India,” she said.
Parag got into manufacturing whey protein after it found that a lot of liquid was coming out of its cheese production. The company has a 34 per cent share in the cheese market making it the second-biggest player with its “Go” brand playing a key role.
“When a lot of liquid was coming out of cheese, we thought the next possible step for us was to get into whey protein, a sports nutrition segment that India needed badly.
“There was a huge gap and a lot was needed for the sports nutrition segment. When Parag set up its whey protein plant, only Amul was getting it produced at Cyber Dynamics which was also manufacturing for other brands. We thought we will be the pioneer and get the first mover advantage for whey protein,” Shah said.
‘Farm-to-home’ cow milk
Parag is now mulling to get into daily protein. “We have protein for beginners, Alpha protein. We’re trying to get into ready-to-eat or ready-to-consume products in protein. You’ll see that very soon in the next phase,” she said.
The company is trying to position its cheese and paneer (cottage cheese) products as ones high in protein. “They have almost 26-30 per cent protein depending on the kind of product. So, if you see any categories that we are launching, it would probably talk about health and nutrition,” she said.
Parag is betting big on what it calls “farm-to-home” product of cow milk. “There is a lot of milk out there in the market but you don’t know the source. We have begun providing single source liquid milk through our “Pride of Cows” brand,” Shah said.
The milk is produced at its farm near Pune that has 5,000 cows. The “Pride of Cows” goes to high-networth Indians in Delhi, Mumbai, Surat and Ahmedabad. “We recently launched in Bengaluru,” she said.
“Pride of Cows” will soon be available in eight cities and Parag plans to cover 16 cities in a few months time. A feature of the milk is that the company checks the soil health and the food grown on it, besides ensuring it is from its single-gated community.
“Pride of Cows is airlifted from Pune to cities such as Delhi and Bangalore. People are ready to pay a premium for it. It is a ₹100 crore brand now,” she said.
Parag, which operates across four brands in the market, sources milk from 5 lakh farmers, mainly in Maharashtra and South. The company handles about two million litres of milk a day.
Parag got into the milk business when its founder Devendra Shah began buying milk from farmers when a “milk holiday” was announced by the Government. The “holiday” was announced so that the government agencies will not procure milk from farmers on that day.
“My father saw an opportunity and began collecting milk on these holidays. Within a month’s time, the collection grew from 20,000 liters to almost one lakh liters per day,” the company’s director said.
Soon, the firm got into value-added products such as butter, cheese and other such products. “We have always been the number one or two in the categories we operate,” she said, adding that the company pioneered the sale of cow ghee. Today, its “Govardhan” ghee enjoys over 20 per cent market share.
On milk prices rising in the past year, she said the rates have stabilised after increasing 40-45 per cent. One of the reasons for the shortage is due to the Lumpy Skin Disease affecting the cattle in a few parts of Rajasthan, Gujarat and South India.
“Now that the supply has kind of stabilised, we will see prices at these levels over the next 3-4 quarters,” Shah said.
Stating that the late setting in monsoon is unlikely to affect milk or food production, she said Parag is not unduly worried over some of the milk cooperatives such as Amul foraying into other parts of the country.
“Probably 90 per cent of our products are value-added compared to anybody else in the market,” Shah said.