KMF moos ahead in the milky way

Rajalakshmi, a resident of Sira in north Karnataka's Tumkur district, life had become tough after her husband's death in 2002. She had to raise her two daughters and get them married. With no proper college degree to boast of, getting a job seemed bleak.

Today, Rajalakshmi has got her elder daughter married, thanks to her job as a dairy farmer with Karnataka Milk Federation (KMF). Like her, around six lakh women are earning a living as dairy farmers in various districts of the state such as Tumkur, Yediyur, Kibbanahalli and Madhugiri.

Like the milk cooperative started by dairy major Amul in Gujarat, a year before independence, KMF is charting out a path of its own. With an average procurement of 45 lakh litres of milk a day, the federation aims to overtake Amul, which procures 100 lakh litres a day. Taking inspiration from Amul, KMF is providing life insurance cover to farmers along with veterinary healthcare. 

Farmers pay Rs75 to avail veterinary care, while KMF's tie-up with Narayana Hrudayalaya provides insurance schemes for farmers and their families. Since last year, the state government has been providing Rs2 per litre of milk as an incentive to producers who provide milk to dairy co-operatives.  “We've to constantly encourage people to take up dairy farming. While in south Karnataka, people accept it as a commercial option, in most parts of north Karnataka, it is considered a subsidiary to other farming activities," said D Srinath, director, marketing, KMF.

The state set up the first dairy in Kudige in  Kodagu in 1955.

Today, KMF, which came into existence in 1984, owns 13 dairies in the state.  “The turning point came when acceptance of the co-operative structure grew among farmers,” said G Somashekara Reddy, chairman, KMF.

Initially, there were four milk unions in Bangalore, Mysore, Tumkur and Hosur—all in the southern region. Now, there are nine spread across the state, including cities like Belgaum, Gulbarga, Bellary, Dharwad and Bijapur.

Even so, KMF continues to scale greater heights. If statistics are anything to go by, the co-operative has managed to close the gap with Amul. While the latter clocked revenues close to Rs10,000 crore during 2010-11, KMF is expected to touch Rs6,000 crore this year. Reddy wants Karnataka to overtake Gujarat in milk production. For one, it needs to create the right infrastructure. For this, it may have to make use of Centre’s Rs2242-crore scheme to increase milk production by 4% over the next 15 years under phase I of the National Dairy Plan.

It also has to improve milk productivity of cattle through artificial insemination. As per dairy industry statistics, each Indian cattle gives 6-7 litres of milk while globally the average output is 15-16 litres.

At present, KMF distributes around 25% of milk in the state, while private players such as Hyderabad-based Heritage Foods, Arokya, Nestle and Gowardhan, occupy 30%  market share. This means there is still a large section of people who prefer buying milk from independent doodhwalas—thereby providing more scope for KMF.

As a part of its plan to expand, KMF has formed a forum which constantly thinks of coming up with new products that’re relevant to the fast-paced lifestyle of the youth. The forum plans to introduce yoghurt, cheddar, processed cheese, chocolate biscuits and sugar-free sweets.

This, they believe, will help enhance KMF’s reach. But experts say though Nandini is a household name in most homes, it's about time the brand is reinvented before it loses space to private players, specially with milk sold in Tetra Pak.
Brand consultants call Nandini a 'bottom up built brand'. This means the sales of the product are not so  dependant on advertisement.

However, Harish Bijoor, CEO, Harish Bijoor Consultants, feels it's high time Nandini shed its rustic image and become more suave. “Though I do not doubt Nandini's strong brand value, there has to be some degree of brand management control. It should stop looking like a 40-year-old product," he said.