It is no secret that most of the milk we consume today is adulterated. In fact, a research by Food Safety and Standards Authority of India (FSSAI) a few years ago, showed that 70% of the milk consumed in India is spurious and does not conform to the standards set by FSSAI.
The kind of contaminants in milk, too, is alarming. The survey found adulterants like detergents, urea, starch, glucose and formalin, making milk dangerous to consume.
So when Srikanth Mannem was working on his research project on organic farming and dairy farming at IIM back in 2014, he realized that pure breed cows in India give the best quality of milk, but in the race for more quantity of milk, cows were being artificially inseminated and injected with growth hormones, resulting in bad quality milk being produced.
What Mannem also realized was that over the years, the soil quality too had been going down with more and more chemical fertilizers being used. And with input costs rising and output reducing, farmers have been suffering leading to an alarming increase in farmer suicides.
This gave Mannem the idea to start a company that would produce and sell organic milk and help farmers adopt the same, to give them an additional source of income. That was how Saro Natural was born.
Forty-year old Mannem, a retired Air Force officer, completed his course at IIM Ahmedabad in 2012. He worked on understanding the needs and problems of farmers and in 2014, bought farmland in Chandanavalli village near Hyderabad. Having set up the farm and after purchasing a few cows, Saro Natural began operations in 2015.
Mannem then started coordinating with farmers to join him in milking and selling cows. “I started with supporting farmers by giving them 50% of the money required to buy a cow as a loan. With the milk they produce and sell, the farmer can eventually pay me back,” Mannem says.
With 10 farmers on board, they supply milk to Saro Natural and earn a premium of Rs 40 per litre. Mannem says that one cow yields 5-6 litres in a day and on an average, each farmer has about 3-4 cows.
Currently, Saro Natural packages its farm fresh and adulteration-free milk at the farm itself. With one nodal centre in Financial District in Hyderabad, it sells its milk in Gopanpally, Gachibowli and Hitech City areas in Hyderabad. With the target audience being the upper middle class, Saro Natural mostly sells its milk in gated communities in these areas.
Saro Natural currently sells about 150-160 packets of milk per day priced at Rs 76 per litre. The aim is to sell at least 1000 packets of milk per day by the end of FY 2018.
Mannem has invested a little over a crore so far in the business and is now taking a loan to expand his cattle and to bring in more farm equipment. Saro Natural’s incubator a-IDEA is also helping Mannem raise funds externally. A-IDEA is the incubator set up by the National Academy of Agricultural Research Management (NAARM).
Saro Natural’s first target is to establish a system of milk supply in Hyderabad over 1-2 years. For this, Mannem is looking to partner with or start a Farmer Producer Organisation (FPO) that can work as a larger body with at least 100 farmers on board. Saro Natural, too, will be a part of this FPO. To put it in context, this is a model similar to what dairy major Amul works on. Once this is established, Mannem plans to set up a milk cooling plant at the farm and supply fresh organic milk across the city.
The next step will be to expand into selling at retail chains in Hyderabad. And once the company achieves scale in Hyderabad, Saro Natural will take its operations countrywide.
Receiving a dairy certification is also on Mannem’s list. But he says this will take time as it isn’t something that has evolved in India yet. Until then, Mannem is working day and night to give consumers farm-fresh healthy milk, while simultaneously touching the lives of farmers.
Image: Max Pixel