Nandini records milestone procurement in 50th year, but faces marketing challenges

The Karnataka Milk Federation (KMF) that markets the popular Nandini brand of milk and milk products recorded a milestone of procuring one crore litres of milk from its members in a day recently. In its 50th year since inception, the milk behemoth has been scouting newer markets as increased procurement of milk brings with it marketing challenges.

The Karnataka Milk Federation (KMF) that markets the popular Nandini brand of milk and milk products recorded a milestone of procuring one crore litres of milk from its members in a day recently. In its 50th year since inception, the milk behemoth has been scouting newer markets as increased procurement of milk brings with it marketing challenges.

The milestone procurement was reported on June 28, when 1,00,05,000 litres was procured across the village-level milk cooperative societies and was followed with a similar quantum the next day too. Currently, the cumulative average of milk procurement stands at 98 lakh litres.

While the procurement of milk grew by 14 % this year, the sales of milk and milk products marketed by the KMF grew by 10% even as the federation is competing with other milk brands in the South and West Indian cities to expand its footprint. The recent decision of the KMF to provide 50 ml extra in each half and one litre sachets for an additional cost of ₹2 is being seen as a measure to reduce the burden on the federation that converts additional milk to skimmed milk powder (SMP).

Currently, of nearly one crore litre that it procures, KMF sells about 65 lakh litres in the form of liquid milk, including UHT Goodlife, and curd. While about eight lakh litre is used (to convert to milk powder) for the Ksheera Bhagya scheme that provides milk to school children, another six lakh litre is used to make milk products such as ice creams and sweets.

“The decision to provide additional 50 ml was to benefit the farmers since the KMF does not reject any milk brought to its societies. The additional 50 ml translates to about three lakh litres a day. This measure also helps the KMF save about ₹37 crore per month that it otherwise would have spent on converting milk to powder,” a senior KMF official said.

This growth is in contrast to last year when the KMF could not meet the demand for ghee and shortage of milk was reported. “We had a shortfall of 10% in milk procurement resulting in shortage of ghee and milk last year. The shortage of milk was about seven lakh litres a day.”

While the KMF converts about 21 lakh remaining liquid milk daily to SMP at its plants in Ramanagar and Chennarayapatna, the official said that the current SMP rate is far below the cost incurred on conversion. Eight lakh litre of milk a day apportioned to Ksheera Bhagya is also converted to milk powder that yield an approximate 3,000 tonne a month.