Unorganised Sector Dominates 80% Of Indian Dairy Market
In an insightful conversation with Akshali Shah, Executive Director of Parag Milk Foods, we delve into the journey of Parag Milk Foods’ evolution, innovation, and its commitment to quality. Akshali shares her remarkable transition within the company, witnessing its growth from its early stages to its present standing. With a keen eye on market trends and consumer preferences, Parag is shaping the dairy landscape with innovation and a focus on health and nutrition. Excerpts from the interview:
The progression from your early role to becoming the Executive Director is remarkable. What challenges did you encounter along the way?
I started this journey almost 14 years back. Being the second generation (in the business), I’ve seen the company grow in front of me. When I started working at Parag as an 18 or 19 years old, it was a very interesting period for Parag because we were moving from a value added product to a branded dairy company. So, I started my journey in the marketing space.
We have always strived to introduce some of the most innovative products in our portfolio, particularly in segments like fruit yogurts and functional cheeses. We transformed the cheese market by offering various formats beyond the traditional slice blocks, including shredded cheese, spreads, and cheese tailored for specific cuisines such as Mexican and Italian. This journey in product development and marketing was a fascinating one. I initially started with a smaller role, overseeing the fruit yogurt category, but gradually took on larger responsibilities as I gained experience. I eventually took charge of trade marketing, delved into various aspects of the business like strategy, production, and new business development. In the last two years, I also had the privilege of working closely with the chairman’s office, gaining insights into the broader strategic initiatives at Parag.
Becoming the Executive Director felt like a natural progression after spending over a decade understanding the different facets of the business. A significant highlight for me has been my involvement with Pride of Cows, a project that has been close to my heart right from its inception.
How do you envision addressing the evolving needs of consumers in this space?
To provide you with a brief summary of our journey, it all began with my father’s venture into milk collection. This gradually evolved, and we expanded to processing and supplying raw milk to neighboring cities. This initial step led us into the realm of value-added products, and eventually, we transitioned to establishing a branded presence. Today, we proudly stand as Parag, a name synonymous with quality dairy products.
Recently, we ventured into the health and nutrition segment of the dairy market. Recognising a significant gap in this sector within the Indian market, we decided to focus our efforts here. This strategic shift is driven by our belief in addressing the evolving needs of consumers who seek dairy products for health and nutrition purposes. Going forward, our central focus will be on strengthening our core dairy offerings, particularly key cheese, and further developing our health and nutrition product range. This strategic direction will guide our efforts in the years ahead.
In addition to our product portfolio, our emphasis extends to distribution. While we offer a comprehensive range, expanding our reach is a constant endeavor. Our goal over the next three years is to establish a wide-reaching network of a million outlets. This ambition underlines our dedication to making our products accessible to a broader audience.
What measures do you take to ensure the highest quality standards in milk sourcing and production?
The most important part in dairy is the input of milk and ours is one of the biggest dairy farms in India. Today, our farm implements cutting-edge cow comfort technology and adheres to the finest global practices. There is a comprehensive system in place to ensure the quality of our milk. More than 56 tests are conducted before the milk even reaches our factory gate. We not only conduct tests but also offer educational sessions on our farm where farmers learn about the techniques to achieve superior milk quality. This farm serves as a hub for imparting knowledge to a network of farmers who come to learn from us about these superior practices. Our emphasis lies in ensuring that the milk we source maintains an exceptionally high quality standard. Consequently, the products we create also adhere to stringent quality criteria.
Our commitment to maintaining milk quality is further emphasised by the presence of a dedicated R&D Center at our farm. The meticulous process ensures the production of 5000 pounds of high-quality milk.
The dairy industry has seen evolving customer trends and that includes a lot of plant based alternatives that’s in demand right now. So how does Parag Milk Foods address the changing preference?
The Indian dairy market is of 12 or 13 lakh crore and out of that, 80 per cent or more is completely unorganised. So, there is a huge dairy market in India. India is a predominantly vegetarian country, and dairy stands as the primary source of protein. While there is a growing space for alternative sources, we firmly believe that dairy is an integral part of Indian consumption patterns. The trends indicate that dairy will continue to hold its significant position. While various options may emerge, we don’t perceive this as a substantial shift away from dairy in the current trends.
How things like morning music and specialised cow mats contribute to the well-being of your cows and the overall quality of your dairy products?
It’s often the small details that matter most. We’ve found that the cows respond positively to morning music, which provides them a soothing environment. Lighting plays a significant role as well, ensuring a comfortable atmosphere at any time of day.
At our farm, you can witness 5000 cows sheltered under one roof. We’re deeply committed to maintaining the highest standards, and that extends to what our cows consume. We grow our own food, understanding that the quality of input directly influences the quality of output. Recently, we acquired a sprawling 400-acre farm to grow food exclusively for the cows. This initiative also reflects our concern for soil health, which ultimately impacts the quality of the food chain.
Even the seemingly minor aspects are crucial. The mats our cows rest on are imported from Germany. These mats are specifically designed to handle the weight of the cows and provide comfort during their long hours of rest. Imagine a 400 kg cow lying on a mat for nearly 8 to 10 hours. It’s a feat of engineering. We’ve strategically situated our farm on a hill, maintaining a consistent temperature of 21 degrees Celsius. This is crucial in India’s diverse weather conditions, ensuring the cows’ well-being.
Can you share about any recent innovations or product launches by Parag milk foods that have been particularly well received by consumers?
A unique aspect of our operations is that we are the sole manufacturers of whey protein in India. While other components in the sports nutrition domain are imported, whey protein, under our brand, stands as a homegrown product. Whey protein is experiencing remarkable growth, with a nearly 30 per cent Compound Annual Growth Rate (CAGR). Our endeavor with Pride of Cows is yielding impressive results, contributing to approximately seven to eight percent of our total portfolio. The journey we’re embarking on is truly fascinating and has the potential to reshape the market landscape. I invite you to witness this exciting venture firsthand by visiting our plant.
Looking ahead, what are your aspirations and goals for Parag Milk Foods?
A significant gap exists within the dairy industry, particularly in the realm of health and nutrition. Our vision is to emerge as a prominent player in the health and nutrition segment, aiming to become a leading dairy in this domain. Our ambitious goal is to elevate our company’s stature by achieving a turnover of 10,000 Crore within the next three to four years. This aspiration and goal underscore our commitment to growth and excellence.