[Startup Bharat] This 4-year-old Tamil Nadu-based milk delivery company has onboarded thousands of farmers, consumers

For over five years, Sellamma, who lives in Sirunallur, a village roughly 92 kilometres away from Chennai, has been supplying milk to companies.

However, during the COVID-19 pandemic-induced lockdown, she couldn’t complete milk deliveries. This is when she found Uzhavarbumi.

Founded in 2018 by Vetrivel Palani and Paneerselvam, this Maduranthakam, Tamil Nadu-based startup has built a platform for fresh, unadulterated cow’s milk.

Uzhavarbumi, in Tamil, means farmer’s land.

“This company has never said no to us, be it rains, lockdown, their vehicles would reach on time to collect the milk,” she tells YourStory.

Sellamma is among the over 2,400 cattle owners that the company procures milk from.

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Sourcing the product

Collecting milk from various cattle owners is a complex task that costs both time and manpower. Co-Founder Vetrivel says he’s had to face several challenges while building the startup.

“In 2017, I started to work towards building Uzhavarbumi,” the entrepreneur says.

In the beginning, he went around the villages for 10 days to look for suppliers. But, the farmers declined the offer, either because they were already serving a different company or were cheated by other businesses.

After several attempts, one farmer agreed to supply milk to the startup.

Building on this trust over time, Uzhavarbumi then went on to add more farmers and widened its network.

While the team managed to cross the supply hurdle, it faced another—ensuring unadulterated products.

Uzhavarbumi solves this problem by partnering with self-help groups. About 31 women and self-help groups, each with 15 to 30 members, and close to 10 rural youth, currently work with the startup.

Cattle owners deliver milk to these groups at designated collection centres.

Sellamma, who YourStory spoke to, belongs to Vinayaganapathi women’s group, which receives milk from close to 30 to 35 cattle owners twice a day.

These groups test for fat, SNF (Solids Not Fat) and water content in the milk using the equipment given by the startup. If the milk doesn’t match the criteria, it is returned to the cattle owners.

“We return the milk if we find that there is more water in the milk,” Sellamma says.

From the local point, Uzhavarbumi’s vehicles are sent out to collect the milk twice a day at 6-8 am and 6-8 pm. It is then brought to the company's factory in Maduranthakam. The 55,000-square-feet facility has two instant chillers and a processing plant spread across 15,000 square feet.

In the factory, the milk is again tested for 8 to 10 parameters including chemical and microbiology tests.

“We upload the test reports on our website every day,” says Vetrivel.

The company also encourages Ethnoveterinary practices—traditional veterinary methods—among the cattle owners and has a team who helps them whenever needed. “The Uzhavarbumi team is just a call away for us,” shares Sellamma. “Every time our cattle are sick, all we have to do is call them and they will come and treat our cows, free of cost.”

The startup does not charge the cattle owners for any medical expense it incurs.

Uzhavarbumi “not only [helps] the cattle owners who offer them milk, but even those who do not,” Sellamma adds.

Delivering the product

If collecting from farmers was a complicated task, the delivery was even more so, the startup says.

With just Rs 50,000 as an initial investment, Vetrivel and Pannerselvam rented a space in Guduvanchery, which is roughly 40 kilometres from Chennai Central.

Back then, the team would take milk collected in Maduranthakam to Guduvanchery, relying on public transport for moving the product.

Today, the company has four refrigerated vehicles travelling to and forth to deliver, 160 delivery partners delivering to more than 43 locations and more than 30 subs to deliver from Potheri to the entirety of Chennai, which is about a 50 km radius. It charges Rs 100-200 per month for delivery.

Uzhavarbumi, which provides door-to-door delivery, sells its milk at Rs 35 for half a litre and Rs 65 for one litre. It also has monthly and weekly subscriptions.

Uzhavarbumi claims to be pocket friendly when compared to its local competitors such as Milk pot and Madras Milk. But the other two companies say they sell A2 milk, which can be found in indigenous cow breeds, whereas Uzhavarbumi has not put a tag on what kind of milk it offers.

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Gaining loyalty points

The startup has expanded its offerings to sell other products such as ghee, honey and eggs. All these products are sold under the Uzhavarbumi brand.

Uzhavarbumi has a customer base of 15,000 and makes delivery of 5,500-6,500 per day within Chennai between 5 am to 7 am and 6 pm to 8 pm.

The company claims it made 16 lakh deliveries last year and registered an 8 crore turnover in the financial year 2021-2022. It works on a 35 percent gross margin with nearly 55 percent being offered to the farmers.

Vetrivel adds that the startup spent only 1.5 lakhs for FY 22 as part of its marketing strategy as word-of-mouth promotion has helped it attract customers.

In April 2020, it raised Rs 1.7 crore from Nativelead’s investment arm Native Angels Network with Sankar Kanagasabai, Managing Director at Shree Renga Polymers–India, as the lead investor.

Uzhavarbumi also built its own tech products for delivery, stock management, and farmer and cattle management. It is also in the process of building an IVR (Interactive voice response)-based easy to access payment system for farmers where a phone call can help them receive money in their bank accounts.

Surprisingly, all this technology is built by one person, the CTO of Uzhavarbumi, Adi SK, who is the only techie in the company.

Apart from him, about 45 people work in the startup.

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The market

India contributes 23 percent of global milk production, according to Invest India. Milk production in the country is expected to grow to $355 billion by 2025.

Vetrivel explains that close to 21 to 25 lakh litres of milk are sold in Chennai. Of this, fresh cow milk has less than 1 percent market share.

“This is a huge market for us to capture,” adds Vetrivel. “For the next 18 to 24 months, our focus is Chennai after which we would expand to Bengaluru and Hyderabad.”

The company is expecting to raise funds by this year, which it expects to grow at 10 -15X before expanding to Bengaluru.