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How this D2C milk delivery startup helping farmers earn better income

Started in 2013 by IIM Indore alumni Chakradhar Gade and Nitin Kaushal, Country Delight, is a tech-first direct-to-home consumer brand delivering natural food essentials directly from the farmer to the doorstep of the consumer. The brand enters a household with fresh milk as the hook and does 8 million deliveries per month across 15 cities with a supply chain that spans 11 States in India. In the last three years alone, Country Delight has grown 10 times in scale and is currently at Rs900 crore ARR (annual revenue run rate). In an interview with Bizz Buzz, Chakradhar Gade, CEO & co-founder, Country Delight, says: “India’s fresh food and staples market is expected to cross $50 billion by 2025. Today, over 60 per cent of the fresh foods market is unorganized with limited cold storage capabilities, fragmented logistics chain, and inadequate visibility of product quality across the supply chain. Country Delight with its quality first DNA and tech-enabled supply chain aims to solve these challenges.”

Is there any story behind the name Country Delight?

Right from the beginning, we knew that the name should resonate with Indian consumers and what Indians generally prefer or like no matter where ever we go or reside in any part of the world we carry our food consumption behaviour and stick to it. So the word country popped up and we wanted to be sure all along to entice the consumers with the ingenuity and freshness of our products that would delight them, thus Country Delight was born.

What initial challenges did it face? What are the challenges it is facing now?

We started this business without a dairy background and little money. Coming from a finance background we had to figure everything out from scratch. There was a lot to figure out like how to procure milk, fix our last-mile delivery, and deal with customer acquisition costs. But we were able to overcome these challenges by integrating our supply chain with technology. Technology, customer feedback and research all played a major role in helping us to arrive at the product base we have today.

How is the dairy segment doing in India? What are the growth levels? How will it evolve in the next 10-15 years?

India contributes 23 per cent of global milk production, reaching the top. Milk production has grown at an annual compound rate of 6.3 per cent, reaching 209.96 million tonnes in 2020-2021. It’s a steady increase from 2014-2015 when it only reached 146.31 million tonnes. The demand for dairy products will likely go up in the next few years as there will be more consumers, higher income levels, and increased interest in nutrition. The milk industry will continue to grow fast with the intervention of technology. Indian milk farming is evolving drastically. Just like, any other industry, technology helped the market and all its stakeholders in many ways. It is still a long way to replicate the initial success across the nation, but the industry is positive and thriving now.

What is the contribution of online sales to the overall milk business in India? Is it growing? Where does Country Delight stand in terms of market share?

Research shows that the online grocery market stands at $3.3 billion in 2020. Out of that, milk accounted for 7-8 per cent and is forecasted to grow at a 50 per cent CAGR in the coming five years. Great growth and expansion are coming in the milk business in India for sure. We at Country Delight are dedicated to evolving and growing with the market. We currently have clocked about 8 million deliveries per month across 15 cities with a supply chain that spans 11 States in the country. Despite apps and online milk sales, dairy farmers are still underpaid.

Why is it so?

The unorganized nature of the market has led many of our dairy farmers to not tap into a vast market aided by technology. Rural India has access to the internet, but few farmers use the benefits of it and other available technology. By sourcing online, the farmers can reach a bigger market and obtain better profits. It is a matter of time before our farmers adapt to the changing landscape in agribusiness. We at Country Delight have several plans to increase the current 2,000 farmers association further. Country Delight also focuses on empowering farmers and maintaining long-lasting relations through the help of a tech-backed cold supply chain. We want to build an inclusive business that improves the lives of farmers while solving customer problems. The brand’s core is to eliminate middle men and build a business that connects the farmer to the consumer. Country delight sources directly from farmers across 11 States in India and helps in income growth, productivity growth and stability for farmers thereby improving the livelihood of the farmers we work with. Our farmers have been seen to earn 30-40 per cent higher income working with country delight. Country Delight started with milk but is now expanding its operations to other categories.

Is a standalone milk business not sustainable in the long run?

With the growing consumption and online sales, a milk business has the potential to sustain itself long term. However, our vision has always been to develop into a natural wellness brand. Country Delight’s mission is to disrupt the decades-old Indian food essentials space. Our brand looks to filling such a huge need and opportunity in the current market. We always wanted to be a brand that changes millions of lives. The brand has grown to become India’s leading D2C fresh food brand, offering dairy, fruits and vegetables to consumers’ doorstep. The company’s business model ensures new deliveries in 24-36 hours facilitated by a fully integrated, just-in-time supply chain model. We at Country Delight have taken a tech-driven and consumer-centric approach to solve this problem by providing natural, fresh, and minimally processed food essentials sourced directly from farmers across the country. It is given to the doorstep of consumers every single day.

With the presence of big business houses like Tatas, there is intense competition in the online grocery segment. Against this backdrop, how can Country Delight sustain its growth levels?

Our go-to-market is as a brand offering better quality products. While all convenience offerings in the online grocery segment are competition, they are not direct competition to us. We are more certain and uncompromised about delivering farm fresh products at a click of a button to our consumers at their doorsteps. We consciously stick to morning, fresh deliveries. Thus, ensuring our consumer lives better by consuming pure products from nearby farms. The company’s business model provides farm-fresh deliveries in 24-36 hours facilitated by a fully integrated, just-in-time supply chain model.

How are you doing in South India?

We are doing quite well in South India. Around 40 per cent of our overall business gets driven by the southern regions alone. We have bigger plans to expand in southern markets concerning business and sourcing. Currently, our focus is on the southern States of Telangana, Andhra Pradesh, and Tamil Nadu.

 Country Delight has recently raised $108 million at a valuation of $615 million. When do you see your startup turning into a unicorn?

Country Delight always focused on delivering the promise we made to the consumers. We never aimed for a particular position but have constantly strived to position the brand as a transparent and genuine brand that consumers can behold their trust. Do you have any more fundraising plans? Fundraising is a constant endeavor for us. It would depend on our short-term and long-term business plans and expansion, however currently we are not looking at it.

What are the revenue run rate and growth rate you are aiming at this financial year? Which levers and States will drive your growth?

Our revenue and growth rate are high. From Rs 19 crores in operating profits in FY18, Country Delight jumped three times to log in Rs 65 crores in the next fiscal and pole-vaulted to Rs 175 crores in FY20. The rapid pace continued after the pandemic. From Rs 321 crores in FY21, in the last three years alone, we grew 10 times in scale and are currently at Rs 900 crore ARR. Our average revenue per customer has increased by 60 per cent in 24 months alone.

What is your advice for new startup founders?

A balanced approach and a sustainable business model are the key drivers of the success of any business. One should have customer-first approach, try to build an ecosystem and above all the founders should be empathetic to teams who make the dreams of an entrepreneur a reality. There is a talk of startups facing a fund crunch in India in recent times. Is it becoming increasingly difficult for startups to mop up capital? The inflation and interest rate fluctuations drastically impacted startups as investors reduced investments in private and public sectors. It was a contrast in comparison to 2021. Finding funds might have become difficult but not entirely bleak.

When will Country Delight launch its IPO?

We plan to look for an IPO in about 2-3 years.

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