This engineer quit his US job, returned to India and bought 20 cows. Now his dairy brand earns Rs 44 Cr revenue

Like many of his peers born in middle-class families, Kishore Indukuri aspired to study and work in the US.

The IIT Kharagpur graduate’s ambitions became a reality after he completed his Master’s and PhD in Polymer Science and Engineering from the University of Massachusetts, Amherst, and took up a job at Intel.

However, six years into his job, Kishore realised his real passion was agriculture.

His family back in India owned some land in Karnataka, and Kishore used to join them in visiting the fields and interacting with farmers.

He says, “I decided to quit my job and return to my agricultural roots. Moving back to Hyderabad, I realised that there were limited options for affordable, unadulterated milk. I wanted to bring a change not only for my son and my family but also for the people of Hyderabad.”

This inspired him to start his own dairy farm and milk brand. In 2012, he bought 20 cows from Coimbatore and set up a dairy farm in Hyderabad. Kishore started supplying milk directly to consumers in the city on a subscription basis, and his business began to grow.

In 2016, the brand was officially registered as Sid’s Farm (named after Kishore’s son Siddharth). Now, the 120-employee brand delivers milk to over 10,000 customers daily, and achieved Rs 44 crore turnover last year, Kishore claims.

In an exclusive interview with SMBStory, Kishore narrates the journey of Sid’s Farm and explains its business model.

Edited excerpts from the interview:

SMBStory [SMBS]: As a first-time entrepreneur, what were the early days like for Sid’s Farm?

Kishore Indukuri [KI]: Nothing was a cakewalk as it was an operationally intensive business environment and I had to quickly get acquainted with it. With the first 20 cows, we started selling milk directly to the customers.

As people’s days start with chai or coffee, the milk should reach them by 6 am. So, we used to milk the cows at 4 am. But as the demand started to increase, we had to keep advancing the timing to milk the cows, which was a real challenge to keep up with.

This was a critical time for us as we invested in a mini chilling/pasteurisation plant. After raising a bank loan, we established a permanent manufacturing facility in 2018.  

SMBS: How much did you invest in the business initially?

KI: When I started his venture, I put in all my savings and also raised money from my family who believed in my vision.

The initial investment was around Rs 1 crore, and later, invested Rs 2 crore more. We also raised a term loan of Rs 1.3 crore from banks.

SMBS: Where does manufacturing happen now?

KI: Our manufacturing facility is located in Shabad, a town and mandal in Telangana’s Rangareddy district. It is a fully-owned facility. We also own bulk milk chilling centres and instant milk chilling stations which are spread among our milk procurement network.

SMBS: Most milk brands venture into value-added dairy products. How did you diversify?

KI: We started with milk and realised soon that the shelf life of milk derivatives such as paneer, curd, and butter is much more than milk.

We also observed that most of the dairy brands were not supplying cow or buffalo dairy products separately, which became our unique differentiator in Hyderabad.

We saw an increasing demand for our dairy products in Hyderabad.

So, we diversified into other product categories such as whole cow's milk, whole buffalo's milk, skim milk, cow's butter, cow’s ghee, buffalo’s butter, buffalo’s ghee, cow’s curd, buffalo’s curd, and natural paneer.

SMBS: Who are your competitors and how are you staying ahead of the curve?

KI: Our competitors are Country Delight, Akshayakalpa, Heritage, Jersey Dairy etc, in addition to national brands. We only sell 100 percent pure and tested milk and milk products on a subscription basis. We don’t add any preservatives, antibiotics and hormones to the milk. Every batch of milk gets tested for various parameters daily.

Currently, the milk undergoes 26 tests based on FSSAI (Food Safety and Standards Authority of India) legal standards of milk and milk products.

The tests conducted on the milk are classified into these broad umbrellas: quality testing (that looks at shelf life and other quality and microbiological aspects of milk), adulterant testing, preservative testing, and testing for the presence of antibiotics and hormones.

SMBS: What is your subscription model like?

KI: Our target customers are millennial parents, or any parents with kids, and health-conscious citizens who would like to drink unadulterated pure milk.

As a D2C brand, we primarily sell our milk through our app. Customers can subscribe to our products for a whole month or a few days. We follow a postpaid model for the subscription but this month, we are moving to a prepaid model.

We have also partnered with 100 stores both in the general trade and modern trade formats. Our products are also available in BBDaily/Bigbasket, Supr Daily, Swiggy, Dunzo, Amazon, Qubag, and other apps.

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SMBS: What are some of the toughest moments you faced in this brand journey?

KI: The initial few years were tough due to our shoestring budget. We were producing milk, processing, packing, and then delivering it directly to our customers' homes. All the above three activities were operationally intensive and required significant investments of time and capital.

We were streamlining operational processes continuously – be it delivering milk on time, producing consistent milk quality without any quality or milk splitting issues, and responding to customers issues on time.

The COVID-19 pandemic has also been one of the hardest phases that we at Sid’s Farm have gone through, as our plans of launching in other cities suddenly had to be halted. We faced issues such as lockdown, fear of infection etc, so we needed to be cautious of our staff’s health, and maintain COVID-19 protocols.

Although we did lose some milk due to the first lockdown and some delivery partners halted their services, we never stopped production as milk is an essential service.

SMBS: What are your future plans for the company?

KI: We plan to add more categories to our product portfolio. This year, we plan to add more districts and cities in and around Hyderabad and Bengaluru. We also have plans to raise VC money in the near future for our growth plans.