The farmers wouldn’t always get a fair price from local vendors, so they formed a cooperative society, Modampadi Ksheerothpadaka Sahakarana Sangham. The strength in numbers opened new avenues, but more importantly, the dairy farmers decided to use technology to digitize the milk supply chain, improve quality control, and price the milk.
They worked with Stellapps, a tech startup from Bengaluru, to install an automatic milk collection unit, smartAMCU, at Modampadi Sangham’s centre. “Between 6am and 7am and 4:30pm and 5:30pm, farmers bring about 1,600 litres of milk to our collection centre," says Rajesh P, secretary of the cooperative. “We weigh the milk and test its composition. It’s graded and priced accordingly." They use digitized weighing scales, milk analysers and tablets with internet connectivity.
The data at every step goes to the cloud in real time, straight from the machines. This makes everything transparent to both the buyer—in this case, Milma (Kerala cooperative milk marketing federation)—and the farmers, who get printouts of receipts with all the details.
“Every farmer’s milk is tested separately, but each test takes only 30 seconds," says Rajesh. “If not for all this technology, the process could have taken three hours."
The time saved in the collection process ensures the milk remains fresh until huge vats are transported to a chilling centre 3km away. There, Stellapps’ smartCC (smart chilling centre) system kicks in. Integrated with smartAMCU, it can detect any quality or quantity mismatch or delay in collecting and chilling the milk. An IoT-based system helps maintain the milk close to the ideal temperature of 4 degrees Celsius. It connects with an ERP system at the backend to enable real-time analytics, and easy reconciliation of payments.
Essentially, Stellapps is offering an end-to-end digitized system of milk procurement as a service to the likes of Milma, Amul and Hatsun who in turn sell milk and other dairy products to consumers. This is not a trivial problem to solve in a country with 76 million households producing milk, two-thirds of whom are small, marginal farmers like the ones in Modampadi.
From a procurement point of view, digitization tackles problems of adulteration, pilferage, inefficiency, pricing and payments in this largely fragmented space. But it goes deeper than that in changing behaviour and livelihoods at the grassroots level.
When the milk rating and price are linked to a quick, digital test of the SNF (solid non-fat) and fat content in front of the farmer, the focus shifts to animal care and nutrition to improve the yield and quality. If one farmer gets a higher rating and returns from better grazing and care, it has a ripple effect on neighbours. The incentive to add water to milk starts vanishing in this milieu, as farmers discover better ways to raise their income.
Once what’s in the milk becomes the primary unit of measurement, rather than just volume, it’s transformative. “Giving farmers their due if they’ve put in additional effort in looking after their animals is a simple but very important concept," says Sudhir Rao, managing partner in India for Silicon Valley VC WRVI Capital, which has invested in Stellapps.
Rao took his time and travelled to remote areas of the country with the Stellapps team to understand what it was doing on the ground before backing the startup. The game-changer for him was how Stellapps was accelerating change in behaviour among small milk producers while improving the value chain all the way to consumers with its SmartMoo IoT platform.
Such an end-to-end system has more value in a post-covid era when hygiene and traceability of food have become vital. From animal ID to farmer ID and milk can ID, everything is mapped on the SmartMoo platform. “It can be traced back to a village or a set of farmers whose milk has gone into a particular can," says Ranjith Mukundan, co-founder and CEO of Stellapps.
The milk analyser not only tests samples but also detects any anomaly from historical data. For example, if the fat content of milk from a farmer suddenly jumps from 4.6% to 5%, it could indicate that vegetable oil has been added to get a better price. “With data from the collection centre coming to the cloud real time, you could subject it to various analyses," he says. This reinforces a shift to healthier practices.
The next step would be to add spectral analysis at the collection point to detect contaminants like pesticides and antibiotics. As consumers become willing to pay extra for organic, additive-free milk, the smartAMCU system makes it easy to introduce this form of testing at the source.
For farmers, going organic would mean a bump in income from the same number of animals. The SmartMoo IoT platform also enables value-added services like credit and insurance linked to milk collection data, ratings and earnings.
The nine-year-old startup pivoted from a farm-centric to supply-chain-centric model that focuses on its procurement service for large buyers like Karnataka Milk Federation, who are better-placed to pay for IoT systems than small farmers. But Stellapps also deploys what Mukundan calls a “Fitbit for cows" at ground zero.
Its mooOn pedometer linked to a mobile phone app can track a cow’s activity and temperature. From this, a call to a vet could go out in time for treatment or even artificial insemination, because sensor data can map a cow’s estrus cycle. This IoT-based system can also help with sachetized nutrition and herd management.
Mukundan and his co-founders—Ravishankar G. Shiroor, Praveen Nale, Ramakrishna Adukuri and Venkatesh Seshasayee—were colleagues at IT company Wipro, where they specialized in telecom. “We wanted to build an app store type of platform for IoT products when we started out as entrepreneurs," says Mukundan.
They realized that a horizontal play for multiple verticals wouldn’t work in India. They would have to drill deep into one domain. While their contemporaries were looking at urban-centric applications of IoT, they figured rural areas had more to gain as remote services could be a substitute for lack of expertise on the ground. This led to dairy tech.
That has scaled to reach 2 million farmers, with 10 million litres of milk flowing through SmartMoo. It still leaves a lot of room for growth in a country that produces 22% of the world’s milk—nearly 600 million litres daily.
Malavika Velayanikal is a Consulting Editor with Mint. She tweets @vmalu