‘In India, the dairy sector and milk brands need to employ technology at every level’
Recently America’s largest independent dairy supply chain technology provider Dairy.com had bought 100% stake in Mr. Milkman, which was their first India investment. Mr. Milkman – a SaaS platform empowers dairies and other industries to manage customer subscriptions and deliveries with unrivaled efficiency. In a joint interview, Samarth Setia, CEO and Co-Founder of Mr. Milkman and Ryan Mertes, CSO of Dairy.com discuss the digitisation of the dairy market in India and highlight that COVID opened the eyes of many milk brands which were relying on manual processes
India runs on milk. Milk is ‘THE drink’ of choice for our country. How do you see the growth of the dairy industry in India? What sort of market share do you intend to capture?
Ryan Mertes: We believe the dairy market in India is uniquely positioned as it has grown exponentially in the last decade, faster than almost any other market worldwide. As the Indian middle class continues to grow, we see an immense opportunity here. Before we talk about the market share, I would like to share our growth strategy. To begin with, we are hiring to serve Mr. Milkman’s existing customers and support further innovation. We are doubling the number of employees at Mr. Milkman and plan to onboard more than 2.5x customers in our first 12 months than Mr. Milkman had at the time of the transaction. We are also investing in the sales and marketing team – Mr. Milkman’s rapid growth has been solely accomplished based on customer referrals. Thirdly, the integration of the Dairy.com solutions to Mr. Milkman is a crucial step that will benefit customers in India and the US. We provide a single software solution that is focused on increasing processors’ operations via digitisation. This increases the profitability to allow brands to invest in their own growth while increasing margins. And lastly, we plan to provide a best-in-class implementation team. Our solutions are about more than great software. Combining our US dairy expertise with Mr. Milkman’s Indian knowledge will allow customers to unlock opportunities that other software companies.
What challenges did your company face during Covid and how are you navigating through these difficult times?
Samarth Setia: Fortunately for us, we did not encounter many challenges during Covid. In fact, the biggest problem for us was handling the increase in milk distribution. COVID opened the eyes of many milk brands which were relying on manual processes. As Covid hit us, the human element in the operations was not available. There was no data, no staff, or ways to get orders for many brands. Since many milk brands relied on calling retailers to take orders, it was becoming a challenge for them to manage it during the lockdown. This is when they realised the need for automation and digitisation.
We saw a 400 per cent increase in calls and inquiries during the lockdown. Due to a lack of technical intervention and know-how, inefficiencies in distribution caused a lot of damage for milk brands. However, given our expertise in technology and capability of creating digital plants we were able to view and correct inefficiencies remotely. We’re also aware of several instances of maintenance experts remotely reviewing parts and training in-plant maintenance members how to repair lines from thousands of miles away, saving money and time on travel. We believe that the pandemic accelerated technical intervention and digitising the plant lowered operational risk making the plant staff more effective with access to the best resources, no matter the location.
Has there been a change in the way you use technology? How do you use technology to build a Covid-proof business?
Ryan Mertes: Like all industries, dairy had to adapt to Covid. Many projects that were low risk, jumped to critical when Covid-19 hit. Examples include:
Projects that reduced the number of bodies interacting with customers or products became critical. Mr. Milkman is a perfect example of streamlining delivery staff since stops are now just customers with orders vs. a standard route with some customers not requiring orders. The technology also allows customers to pre-pay for a product meant delivery executives don’t have to risk exposure improving the reliability of the workforce.
Remote support became mandatory: customers relied on experts remotely troubleshooting problems that otherwise would travel to plants. This results in the Digital Plant where everyone can view operations in real-time or historically. This results in better operations with cheaper production without scrimping on quality or safety. Remote support also adopted technologies such as using Augmented Reality being used with headsets to allow remote experts to see exactly what was happening on the floor and having training materials on the screen for the on-site person to adjust operations. This makes training faster and cheaper.
How are your brands different from existing tech-based dairy brands?
Samarth Setia: In India, the dairy sector and milk brands will need to employ technology at every level, right from milk procurement to the last delivery mile, to grow and be successful. Milk brands in India and around the world operate on slim margins. Since milk prices have a cap, the only way to be profitable is to become more efficient – which can only happen by implementing technology from one end of the operations to the other. We have the edge over others due to the tried and tested advanced suite of solutions from Dairy.com, which covers the entire dairy value chain.
Dairy.com plans to tweak the technology system used in the US as per Indian needs. Can you tell us about the existing tech platforms and what sort of localisation you going to introduce for the Indian customers?
Ryan Mertes: Nearly 50-60 percent of all the milk supplied in the US is tracked through Dairy.com’s system. We have entered Indian marketing impressed by Mr. Milkman’s software solutions and we will be tweaking the technology we plan to bring to India. We have solutions for the farm including Producer Payroll for payment and a Producer Portal to provide producers with data in real-time to optimise quality. The solutions for the plant include dispatch to schedule milk collection and minimising the distance driven by haulers and optimising communications from the coop to the customer. Also, manufacturing solutions that track milk at its component level at both the Manufacturing Executions Systems and the Enterprise Resource Planning level to maximise product yields and minimise shrink. We can also provide a Laboratory Information System to aid plants in testing efficiently and documenting quality. All these systems are being integrated with Mr. Milkman to provide a single integrated solution.
What are your plans to implement unique technologies that will help the margin and reduce hidden costs of the Indian dairy sector? Please explain.
Samarth Setia: The main purpose for Dairy.com to get into the Indian market was not just for investment or bringing technology into the country but because India is the largest milk producer, making up 22 percent of the global production. We provide a single software solution that is focused on increasing processors’ operations via digitization. This will increase the profitability to allow brands to invest in their own growth while increasing margins.
Apart from the dairy industry, you are also planning to provide solutions and services for brewery, distillery, and ethanol production. Please share more details.
Ryan Mertes: Ever.ag/Dairy.com solutions specialise in solving the unique needs for liquids. The brewery, distillery and ethanol industries have quality aspects in terms of alcohol by volume and gravity. They each need tracking or process on batch processes just like dairy. Furthermore, the alcohol market seems to be heading toward the business-to-consumer space which Mr. Milkman supports better than anyone.
Furthermore, the connected supply chain is the future. The means of connecting the data from the farm through the plant to final delivery is going to be a requirement. Lots of folks talk about field to grass, but our solution solves this problem from a commingled component point of view. This provides true traceability and accountability. Technologies such as blockchain only are automating a solution that handles the commingling such as ours.
