People don’t want quarter inch drill.They want quarter inch holes

People don’t want quarter inch drill.They want quarter inch holes. Theodore Levitt wrote this in an article Marketing Myopia way back in 1960 . The context of this article is to highlight the inability of the marketer to see the big picture. Most of the time the marketers are focussing too narrowly on selling their product and services.

Few weeks back I saw a big hoarding of Zepto stating Delhi’s morning milk delivered by Zepto in 10 minutes. On similar lines Blinkit by Grofers started to make claims of 10 minutes delivery of fresh dairy products in 10 minutes. As usual my skeptic instinct forced me to validate the time bound delivery claims made by these players. So I ordered some fresh groceries on each of these platforms. To my surprise , none of them delivered it in 10 minutes.

They did it before that ! A true Wow moment! It was a real customer delight for me. Why has no one from the dairy sector ever thought about it ?

10 minute delivery has always been under criticism by the self indifferent but socially concerned intellectuals. They have always raised issues related to danger of life of the last mile delivery boys. The point which these people do not understand is that an industry has never borne a child of disruption within its own domain. The dark store concept has disrupted the home delivery in the same manner in which cloud kitchens have done for cooked food.

An industry hardly patronise its disruption

It is to be noted that neither the Refrigeration industry was disrupted by ice harvester nor the home refrigerators were developed by the refrigeration industry. Nobody ever thought that the iphone 6 would have more than 10x the power of the IBM Deep blue ( the first supercomputer to beat the world chess champion in 1997).

An electric car like TESLA has not been made by the Fords, General motors and Toyotas of the world. Same is true with brands like AirBnb, Amazon, Netflix and Google of the world. We must not forget that Google was the 18th search engine in the world. Today Google has turned itself from a noun into a verb for practically all of our search needs. You can google it also if you wish.

What could disrupt our dairy sector ?

Let us look at the Indian dairy industry. We are the largest producer of milk in the world. India is also host to the largest population of low productivity cattle on earth. We are also amongst the slowest innovators in the dairy sector. We can always feel proud of the innovation done by Amul in 1956 for converting buffalo milk into milk powder and later baby foods. This innovation also helped the Indian dairy sector to compete against the global dairy leaders like New Zealand and Europe. We have been discussing it in various webinars even in current times.But which innovation followed it with the same intensity? I don’t know.

It is very difficult to list disruption in milk processing and dairy technology with a very high level of commercial sustainability. We have 4-5 types of market milk; 2-3 kinds of curd and derivatives; 1 kind of butter , 2 kinds of paneer , two types of ghee and 2-3 kinds of milk powders . This covers almost 80-85% of the total organised sector revenue. Is this achievement good enough for a 8.5 lakh crores sector in last 75 years? The supply chain has remained dependent on general trade and not much on Modern trade. The traceability of products to the last mile is still miles away.

What next ?

Is the industry too busy focussing on growth or too complacent to ignore the real consumer needs . The largest players of the dairy sector are not the market leader in innovative segments like Yogurts and Greek Yogurt; ambient yogurts ; Organic milk, Sports nutrition, Direct to home delivery, Desi cow A2 certified ghee, Chocolates, ambient Indian sweets, Probiotics etc.

In this article my objective is to raise this issue in front of the market leaders from both cooperative and private sector. In these changing times there is a need for the industry to come together and start evolving with agility and diligence . It requires a lot of lateral thinking and openness to questioning the conventional wisdom in all aspects of dairy value chain. This can be taken up more of an exercise to circumvent the entry of millennials who may impact the livelihood of 80 millions dairy farmers by taking help from the investors having deep pockets.

Surprisingly, the industry is also keeping a closed eye on the plant protein segments which have the power to disrupt the dairy sector. Alternative protein companies have raised almost $6 billion in investments in the past decade (2010–2020), more than half of which was raised in 2020 alone. The size of the protein based dairy alternative industry is 22.6 B USD which will cross 40 B USD by 2026.

We must also not forget that as per McKinsey 70% of global grocery investments came to India in 2020. There is a huge opportunity in India to make groceries delivered at the consumer’s door step in the shortest time. Convenience is the intrinsic trait of a consumer. Our industry must understand it.

Today’s consumer loves Nutrition but not at the cost of convenience

My only apprehension is that a major part of the market may become brand indifferent in the wake of convenience. The next disruption may be the storm of white labeled brands in the fresh category like Zepto or Blinkit milk. Big basket has already tried it under BB daily.

So it’s high time for all the stakeholders in the dairy sector to be the proud father of the next disruption.

Source : Blog by Kuldeep Sharma Chief editor Dairynews7x7 Channel