Will Tech Be The Key?

There are a number of elements that an organization wants to think about when working in a distinct segment section, and a new-age, bootstrapped startup working with camel milk is as area of interest because it will get even in India’s huge dairy trade. Having the first-mover benefit on this area, Aadvik Meals was sitting fairly on this small market, however when massive dairy corporations begin eyeing the territory, what would be the X-factor for the Rajasthan-based startup? 

Cofounder Shrey Kumar believes it will likely be belief and tech. The previous is constructed on the again of a community of over 200 camel farmers, with a wholesome buyer base of two.5 lakh shoppers, in addition to some companies. Whereas disruption within the provide chain and realignment of the whole chilly chain operations, meant the community of farmers has now dropped to 150, it’s now delivering near 10Okay orders per 30 days, in comparison with pre-Covid instances the place it was doing 6K orders per 30 days. 

As for tech, Kumar mentioned that the mixing begins proper from the procurement stage. A big majority of camel farmers in India are sceptical to provide camel milk for business use resulting from cultural variations. Furthermore, preserving and processing of milk are additionally tedious. Usually, the shelf lifetime of camel milk is three days from the time of milking, supplied it’s maintained underneath the proper circumstances. The frozen milk, nonetheless, is estimated to have a shelf life for 1 12 months, which makes it higher suited to processing and different use-cases.

Based in 2015 by Shrey Kumar and Hitesh Rathi, Aadvik Meals procures and sells camel milk, moreover processing it for frozen camel milk, milk powder, value-added merchandise reminiscent of candies and skincare merchandise. It’s additionally working with goat milk farmers to enter into one other area of interest milk market. Presently, it has over 60 SKUs and claims to have clients from the US, Singapore and the Center East moreover India, with worldwide gross sales accounting for five% of its total gross sales.  

When it comes to income distribution of its merchandise, Kumar mentioned that the income from sale of frozen milk ranges from anyplace between 25-30%, adopted by 30-35% from powdered milk, and remaining 70% comes from its candies and skincare merchandise. Within the non-milk class the skincare merchandise and candies have been doing rather well, he added. 

“The future is beyond just the supply of milk, there are other value added products like exotic sweets made from camel milk, ghee, butter and yoghurt etc, and there is a lot of scope for such products in India as well as outside the country,” Kumar mentioned, including that extra merchandise are within the pipeline to be launched subsequent 12 months. 

The Tech Behind Camel Milk Provide

“Typically, camel milk requires a special technique to pasteurise, unlike cow milk which goes through the ultra-high-temperature (UHT) method. However, for camel milk, we use high-temperature short time (HTST) pasteurizer technique to retain the composition of milk as it is consumed by consumers for its medicinal properties and values,” the cofounder added. 

Aadvik has invested closely in constructing chilly chain capabilities which make sure the optimum temperature always throughout the availability chain. This tech integration can be a part of constructing the belief. 

The UHT and HTST methods used for pasteurizing animal milk kill dangerous endemic micro organism and viruses, and this can be a important half in offering protected milk. 

As for the expertise used within the chilly chain, that’s nonetheless underneath growth with IoT and sensors being developed by the corporate. Presently, Aadvik tracks the camel milk throughout the availability chain utilizing personnel, which explains why the Covid-19 pandemic had a huge impact on the corporate. With tech at its core, Kumar mentioned the usage of IoT throughout varied contact factors will enhance effectivity and distribution to new audiences. 

The third part within the tech stack is the freeze-drying methods for manufacturing camel milk powder, which give the corporate a aggressive edge over bigger dairy corporations. Aadvik claimed to be the primary firm within the nation to do that, not like different manufacturers which use spray drying methods for changing liquid milk into powder, which reduces the true nature/traits of milk. 

Underneath its newly launched non-public label entity referred to as Hye Meals, Aadvik additionally makes use of spray drying method so it has each side of the market coated. The distinction in pricing between spray-dried powder and freeze-dried powder permits it to promote extra by means of its web site and ecommerce marketplaces and diversify its product portfolio. 

Going D2C And The Competitors For Aadvik

Following an omnichannel method, Aadvik Meals right this moment has been leveraging each offline and on-line channels to promote its merchandise, together with Amazon, Bigbasket and Milkbasket, and shops in locations like Delhi NCR, Punjab and Haryana amongst others. It’s also planning to begin with a subscription mannequin within the coming months, which is at the moment completed manually with the present clients. “At present, 55% of the sales comes directly from its D2C native website.” 

When it comes to income, Aadvik Meals instructed Inc42 that it achieved a income of INR 65 Lakh in FY17, adopted by 7x to 8x development in FY18. Nonetheless, in FY19, the corporate mentioned that it witnessed a stagnant development of 30% income, and it hopes to enhance this to 70-80% income development in FY21. Aadvik’s financials for FY2019 and FY2020 haven’t been publicly launched. 

On the flipside, Aadvik would possibly compete with manufacturers like Bigbasket, Milkbasket and Milkmantra within the close to future which have tech and distribution capabilities to increase into camel milk enterprise. 

To this, Aadvik cofounder mentioned that it isn’t going to be simple as it isn’t one thing that you just pay the camel farmers and procure the uncooked supplies and begin the manufacturing. It doesn’t work that means in actuality. “Farmers will trust only those who have helped them in the past, and we have built that personal relationship with them. Not just farmers, even customers, in terms of delivering quality products that add value to their health and lifestyle who specifically come to us to buy camel milk products,” mentioned Kumar. 

In line with IMARC, the worldwide camel milk merchandise stood at $5.98 Bn in 2019 and is anticipated to witness reasonable development within the subsequent 5 years, rising at a CAGR of 6.84% resulting from enhance within the variety of dairies producing camel milk and big demand from the Asia Pacific and the Center East area. 

In India, nonetheless, the consumption of camel milk continues to be within the nascent stage. With solely a handful of corporations within the camel milk enterprise, together with Aadvik Meals, Camel Charisma, Nutra Vita, As Recent and Amul, the market alternative is large, and so are the challenges. As per Livestock Census, India’s camel inhabitants stood at 2.5 lakh in 2019, from 5.2 lakh in 2007. And there are about 25Okay to 35Okay camel farmers/breeders within the nation. Sadly, camels are additionally changing into out of date, making them much less and fewer helpful, and camel-breeders are additionally unable to afford their repairs.

At current, Aadvik Meals claimed to obtain camel milk straight from native farmers in Rajasthan and Gujarat on a weekly and month-to-month foundation, and course of and retailer the milk at its state-of-the-art facility situated in Delhi. Regardless that all of its merchandise are manufactured and processed domestically, the costs of its last merchandise appear to be a lot greater in comparison with different milk-based merchandise and options. 

Given the perceived and recognized well being advantages of camel milk, there’s a variety of curiosity from health-conscious Indians who’re lactose illiberal or could need to add various meals to their way of life. Aadvik’s cofounder instructed us a big majority of the shoppers come from Tier 1 cities, and that’s not about demand or distribution alone. Kumar mentioned that Aadvik procures camel milk at a worth greater than milk companies reminiscent of Amul. That permits it to construct on the belief with the farmers however finally, the worth is excessive. “Obviously, we are paying more than the per liter price that has been given by the giants, because the camel milk has to be premium.” 

The corporate additionally instructed Inc42 that it helps them in organising financial institution accounts and ensures that the cash will get credited to their account on a month-to-month/weekly foundation, not like different irregular procurement from a cooperative or milk producer affiliation, which ends up in revenue leakage. 

Past this when it comes to manufacturing and processing, Kumar mentioned that most spending goes into preserving the milk and chilly chain, accounting 70% of the ultimate worth. 

“Initially, 1 litre of camel milk was about INR 600. But, now we are selling it at INR 400. Similarly, for camel milk powder it was INR 7500/kg, and we have reduced it to INR 3000/kg,” mentioned Kumar, stating that the demand and provide of the milk typically influences the worth of the ultimate product. Then again, dairy big Amul, which ventured into camel milk merchandise final 12 months. Its 500 ml and 200 ml PET bottles are retailed at INR 50 and INR 25 respectively, clearly indicating the already robust infrastructure and community it has arrange in place with its already current cow milk enterprise and different worth added merchandise. 

Buyer Behaviour, Investor Sentiments 

Although camel milk has well being advantages, the style and odor of it’s one thing distinctive that many of the shoppers throughout the nation would both prefer it or hate it. Additionally, those that are attempting for the primary time typically have questions of their thoughts associated to the odor and style. Aadvik Meals mentioned that they’ve been getting a variety of queries associated to this from clients over time and claimed that some the first-timers at the moment are common clients. 

“In fact, 90% of queries that we get on a regular basis have been related to this, where consumers ask for various properties and health benefits related to camel milk, along with the solution for getting used to taste and smell,” he added. “We always tell that it is an acquired taste, Once the customer starts drinking, the taste for camel milk gets better.” 

Presently, working its enterprise in bootstrapped mode, the corporate mentioned that within the coming months it’s searching for strategic traders who can assist scale its enterprise multifold. “We strongly believe in the concept of generating profits for all of our stakeholders and our biggest stakeholders are at the bottom of the pyramid, followed by our team. For investors to see profit in this space, it takes a minimum of three years, and when we find the right investor who aligns with our values, we will raise funds,” concluded Kumar, on an optimistic observe. 

[With inputs from Nikhil Subramaniam]