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Amazon does a lot of direct distribution, so why can’t we do that too?: Radhey Shyam Dixit

Following Operation Flood (also known as the ‘white revolution’) in 1970, India transformed into one of the largest milk producers in the world. The program was initiated by the National Dairy Development Board to increase the country’s milk production; in other words, to create a ‘flood of milk’. It involved the creation of a national ‘milk grid’ that connected rural milk producers with consumers throughout more than 700 cities.

The system not only empowered dairy farmers; it also reduced malpractice by milk traders and aided in reducing poverty. And it was during this era that Ananda Dairy established itself in the dairy market.

Founder and Chairman, Radhey Shyam Dixit opened the company’s first milk procurement factory in Bulandshahr, Uttar Pradesh, in 1989. He developed a strong business acumen from his days working at
a shop before school and in the mid 1980s, he decided to start a distribution company.

After a number of organisations that he worked with decided to do their own distribution, Radhey Shyam branched out and established another business – now Ananda Dairy. Today, Ananda Dairy has four factories in Uttar Pradesh – producing 1.8 million litres of milk per day – and a 5,000-strong workforce.

Ananda Dairy manufactures more than 50 dairy products including milk, cream, butter, ghee and yoghurt. To keep the company thriving, Radhey Shyam ensures the best possible opportunities for consumers to access its products. “For the past 15 years, I decided that I will not buy a single drop milk from any contractor,” he says.

“My vision is to minimise the lag; to go directly to farmers and the consumers. What we have done is create a 100% business-to-consumer system, where we are connected with the consumer. We procure milk only from farmers – no contractors or mediators. The same thing goes for our sales. Our company is a complete end-to-end chain.”

With this business model in place, Ananda Dairy also plans to extend its home delivery network. “Amazon does a lot of direct distribution, so why can’t we do that too?” says Radhey Shyam.

Ananda Dairy has teamed up with Piaggio Vehicles to bring in one of the biggest bulk vehicle delivery deals in the SCV industry. There are 1,500 special application vehicles, made of insulated material that have been customised for Ananda Dairy. This will help the dairy giant to deliver its products effectively.

“In our industry, 75% of our raw material is milk so we work very closely with farmers.”

Farmers are integral to Ananda Dairy’s operations. “In our industry, 75% of our raw material is milk so we work very closely with farmers,” Radhey Shyam says. “We take their pain as our pain. We oversee their feed management, cattle management, and research and development. We do a lot of things to make sure they grow and that their yield is efficient.”

Radhey Shyam further mentions the steps the company takes to support its farmers. “We started our own factory of cattle feed that produces 200 tonnes per day,” he says. “We have a very good team. We have a principal genetics scientist who focuses on the agriculture and a lot of our feed.

We have 20 veterinary doctors and a solid R&D team. We have 200 workers who carry out the artificial insemination of cattle and a company-owned call centre.”

India has a high protein-deficiency rate, which is something Radhey Shyam wants to change. According to a survey conducted by market research firm IPSOS, in conjunction with InBody India, approximately 68% of people in India are protein deficient. There are several reasons why. First, India has a large number of vegetarian people who are found to have a higher protein deficiency than non-vegetarians.

“In 2017–18, India produced approximately 176.35 million tonnes of milk (all livestock). It is predicted to produce 254.5 million tonnes in 2021–22.”

Another reason is the rice- and wheat-based diet. Protein deficiency can cause low immunity, low energy levels, loss of muscle strength and poor sleep. Dairy – along with poultry, fish and lean meat – is a good source of protein and Radhey Shyam wants to promote its benefits in India. “We have made it our mission that we will work on dairy-based protein,” he says. “There’s a huge opportunity for it here.”

One of the company’s main products is paneer, a type of cheese made by curdling milk in a vegetable-based acid. “We are a pioneer of paneer in India,” Radhey Shyam says. “Consumer VOICE has tested pan-Indian paneer and has given us the number one paneer award. This is alongside awards for our plain dahi (yoghurt) and toned milk.”

To take its paneer to every corner of India, the company implemented a unique distribution system. “We are supplying paneer using 800 bikes in order to access buildings in small, narrow streets,” Radhey Shyam says. On a grander scale, the company has distributed its paneer throughout the northern, western and southern parts of India. It also has distributors in Canada, the US and the UAE.

With the success of the company’s paneer, both nationally and internationally, Ananda Dairy has implemented plans for new production lines. “We will be implementing a German line for 100% paneer manufacturing. It will produce 20 tonnes of paneer. My mission is to produce 100 tonnes of paneer per
day.”

The company currently produces 200 tonnes of curd and buttermilk per day as well as 1,000 tonnes of ghee each month. Radhey Shyam has broader expansion plans in the works for the manufacture of these products, mentioning that he wants the company’s distribution to be pan-India by 2020. In order to reach the company’s goals, Radhey Shyam believes in sticking to the broader vision.

“In business, the first motivation should be your thought process, your vision. Then it should be shared with your organisation. If you don’t share your vision with the organisation, you cannot grow.”

Top 10 cow’s milk producing countries (tonnes)

  1. United States — 97.7 million
  2. India — 83.6 million
  3. Brazil — 33.5 million
  4. Germany — 32.7 million
  5. Russia — 30.9 million
  6. China — 30.7 million
  7. France — 24.4 million
  8. New Zealand — 21.4 million
  9. Turkey — 18.8 million
  10. United Kingdom — 15.2 million

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