Born and raised in the village, my parents were always particuolar about the milk that came home. My dad would find a nearby milker at every job location and make an evening trip to get fresh milk home. I often asked him - why not just save time and take it from the milk delivery motorcycle or the nearby milk parlour?

To which his answer was always, “You don’t know if it has water, detergent, paint or something else. I would rather make the effort than compromise quality.”

Milk and its quality-related concerns have been a long-standing consumer issue. So today, we deep dive into a 12-year-old brand changing the status quo with its pure, organic milk and much . 😃

Today, we are going through the workings of Akshayakalpa, a Bangalore-based startup with 360 Cr annual revenue growing ~26% year-on-year.

Alright, here’s what we will be covering in our Akshayakalpa analysis

Table of Contents

• Why the heck is organic costly?

• Humble Beginnings: How Akshayakalpa started?

  • What makes Akshayakalpa different? - Unique positioning and a larger mission

  • Turning farmers into agriprenuers: A 3-step model

• GTM Strategy

  • Early GTM: Lesson from Paul Graham and doing things that don’t scale

  • Building Trust: The 6 battle-tested ways to build trust and how Akshayakalpa executes two of them incredibly well

  • The “can’t say no” offering at society activations(BTL’s)

  • The organic awareness

Let’s get to it! 👉 🐄🥛

Why the heck is organic costly?

Before we go into the workings of Akshayakalpa, I would like to start with what’s with the premium attached to organic.

Simply put, producing products naturally that guarantee the highest animal welfare is costlier. 

Organic milk requires growing and feeding cows cattle feed free from pesticides and other unnatural additives. This leads to fewer cows fed per hectare of farmland, and the volume of milk produced by each organic cow remains at a much lower, natural level.

There’s also additional labor required to keep the cows free-grazed and infection-free. Over and above, organic certification takes two to three years.

So, net-net, a farmer has to charge more to cover the costs of feed, labor, and volume. 

Hari Menon, CEO of Bigbasket summarizes this really well in his LinkedIn post.

Okay, so now we know why organic deserves a premium. Let’s look at how Akshayakalpa found their niche in the organic market.

How Akshayakalpa started?

Born and brought up in a small city called Attibele on the outskirts of Bangalore, Shashi Kumar pursued his B.Tech in computer science and subsequently started his career in Wipro Technologies. After spending 17 years in the technology industry, he decided to return to his roots and recreate the country’s farm sector in a way that improves the economic conditions of millions of small and marginal farmers.

For a while, he had informal discussions with 27 people from Wipro about how farming needs to change. The talks gradually became serious and in 2010, all 27 pooled in money and started a crowd-funded initiative. Initially, their NGO was focused on women and children in small villages who needed support. Most of these women-owned one or two acres of land (or even less where traditional farming wasn’t viable. The idea was to help them set up farming enterprises and support them reach a sustainable living from agriculture. 

They started by bringing 25 women in a locality together. However, over time, they realized that these women needed more psychological and physiological support. This is when they decided to extend their effort towards entire farming families. This needed significant funding and hence they formed a private company called Akshayakalpa.

Meeting farmer families, Shashi and the team saw a troubling trend: despite owning land, farmers were trying to move away from agriculture. They did not see farming as a viable source of income. Instead, they were seeking jobs such as cab drivers and security guards - anything with a regular income.

The only significant assets farmer families have are land and one or two cows. 

Team Akshayakalpa took the goal of enterprising these farms to produce stable income for these farmers and it has been their sole focus for the last 14 years.

Since 2010, Akshayakalpa has worked with around 1,200 farmers, helping them create a stable income through dairy farming while also restoring the health of their soil, ensuring that farming remains a viable and profitable occupation.

If you look at how milk is produced, processed, and consumed in India, you will see that there’s a big challenge.

Most brands and co-operatives start their milk-to-consumer value chain from collection centers. Be it Amul, KMF, or private brands, they work with an agent to set up a collection center, collect the milk, send it to their factories, build distribution, and do a great job at marketing. Yet, no one goes deeper and solves the fundamental challenges faced by the farmers.

At a farm level, what are the quality aspects? What are the soil conditions at which the fodder is produced? Does the producer have the knowledge and equipment to do better? What does the producer do when the cows fall sick? Does the producer make enough money?

These are deeper problems no one gets their hands muddy on. In contrast, Akshayakalpa is trying to solve these grassroots problems and simultaneously build an organic brand around it. 

Now let’s look at how Akshayakalpa is positioned differently with respect to other brands in the market and then dive deeper into how their business model turns farmers into agriprenuers.

Akshayakalpa is positioned differently

People don’t change their milk brand often. This means there has to be a really strong reason for buyers to switch. You might say better quality will nudge people to switch eventually but here’s the problem. Almost all entrants, old or new, position themselves around the same promise: better quality.

So how do you stand out?

Here’s how Akshayakalpa does it. They differentiate themselves by solving something more fundamental than quality - inspiring rural youth to take up farming. 

Their problem, solution, and product placements look like this

Compared with other brands in the market, Akshayakalpa takes the high road and has a larger mission on its hands

Turning farmers into Agriprenuers

Akshayakalpa starts by building a strategic farm network in rural, agricultural areas close to the demand cluster. Over the first two to three years, they work with farmers developing the soil and turning the produce organic.

They simultaneously work on building demand in the nearby urban hubs. As the fields mature, they use their farm network to supply fresh, locally-produced items to the urban hub. For Bangalore, their farm networks are situated in Tiptur (150 km from the city) where they work with 750 farmers from 900 villages.

Let’s look at how this whole process works in detail.

Step 1: Helping farmers lease the land

Any farmer interested in working with Akshayakalpa needs to have access to a minimum of ~3 acres of farmland. Roughly, about 40% of the farmers own the required amount of land. The others, lease the land. Leasing is also easy because most of the farm-owned families don’t live there and are willing to lease for a steady income.

Next, Akshayakalpa assists the farmers in the leasing process with a tripartite agreement with NBFCs. Akshayakalpa finances the farmers at 7%-8% per annum. In 4-6 months, the farms start making money. Akshayakalpa’s loan is repaid by the NBFC’s who then take over the loan amount. Akshayakalpa has also launched a retail investor fund to finance farmers which has received 6 Cr from 3402 social investors so far.

Step 2: Introducing dairy

Unlike crops, dairy is a quick turnaround product - meaning, positive cash flow from day one. It also takes away the uncertainty of income that farmers face. Therefore, Akshayakalpa starts by introducing dairy into their developing farms.

Akshayakalpa encourages the farmers to reuse the fodder from the farms for their cows and encourages free grazing for both cows and calves. They also guide farmers in setting up biogas plants solving their external electricity dependency

Step 3: Adding multiple cash streams

Next, Akshayakalpa encourages farmers to build multiple revenue streams. They guide farmers in 

1. Setting up a small, backyard poultry farm

2. Integrating practices like penning, bunding, and hedging

3. Planting mulch plants on hedges and

4. Growing seasonal herbs such as curry leaves, methi, amaranthus and mushrooms on the side.

These interventions change the farm incomes from  ₹3000 to ₹6000 per month in a couple of months.

Within 2-3 years, the groundwork is complete. , Akshayakalpa helps farmers with end-to-end farm design and crop planning. They introduce pollinators and crop diversity and practice intercropping to replenish soil fertility. Linking their produce to urban demand, the income of Akshayakalpa farms rises to ~₹1,00,000/month on average in two to three years.

Compared to local co-operatives, Akshayakalpa also pays a higher price/litre to their farmers

By creating real-life stories of farmers becoming self-sustainable, Akshayakalpa inspires rural youth to take up farming.

Alright, so far, we have seen how Akshayakalpa is transforming the production and supply side of organic dairy and farming.  Now, let’s move on to the other side and see how Akshayakalpa found early demand and the channels they use to grow consistently.  

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GTM Strategy

Strategy 1: Do things that don’t scale

Before we go to Akshayakalpa’s GTM, this quote from Paul Graham’s famous essay titled ‘Do things that don’t scale’ on early GTMs puts this in a better context.

So, Shashi Kumar and his team went to where their audience was. They made Bangalore’s Jayanagar their beachhead and went to parks and temples offering free samples to the devotees.

For the first 10 years, Akshayakalpa spent Zero rupees on marketing,  relying on personal networks, word of mouth, and tie-ups with local milkmen to create a loyal customer base in the city.

Now, word of mouth of this level only happens when your existing customers trust your so brand deeply that they can’t stop telling their friends about it. So, how does Akshyakalpa build trust amongst its users?  Let’s find out 👇

Strategy 2: Building Trust

Trust is a hard-earned currency.

A quote I found on Lenny Rachitsy’s post summarizes why is it so very well.

“Throughout human history, we have distrusted people outside our clan, our tribe. We believe strangers will do us harm. Why? In deep time, hominids outside the family group were likely to be a raiding party.” —Gordon H. Orians

Talking to a dozen founders and early growth leaders, Lenny finds that there are six effective ways to build trust

• Reviews

• Verifying your supply

• Leaning on social proof

• Creating a perception of quality

• Providing a safety net

• Delivering magic

Akshayakalpa has imbibed “verifying supply” and “creating a perception of quality” into its go-to-market DNA. Let’s look at these two in detail.

a) Farm Tours (Padharo Mhare Khet)

Like wine-tasting tours from Grover and Sula in Bangalore, Akshyakalpa invites their subscribers to explore the behind-the-scenes of organic farming via farm visits.

Their field trip entails a fun educational outing into the 24-acre lush green Akshayakalpa farm in Tiptur (150 km from Bengaluru), where Akshayakalpa has a 200,000 litres-a-day milk processing facility, a lab, and a model farm for training farmers. During the trip, the visitors handpick veggies, spend the night in tents, and learn  the organic approach to cow rearing, soil treatment, free-range grazing, cow feeding, and honey harvesting. So far, they have taken over 10,000 of their consumers to their farm demonstrating their processes and practices.

This is a classic “show, don’t tell’ strategy that works wonders for word-of-mouth.

b) School Tours

Akshayakalpa also hosts tours for schools, providing an immersive learning experience to kids on farming. During the tour, the Akshayakalpa team shares hands-on experience in core farming principles such as crop rotation, pest control, and composting techniques. 

If you look at these tours from a broader perspective, they cultivate a strong sense of awareness towards the food we eat. What it truly accomplishes is turning the next generation into conscious consumers, who appreciate the food on the table and contribute to a sustainable tomorrow.

These visits ignite conversations about organic lifestyle at home and at the center of it - consuming organic products such as Akshayakalpa.

c) Give back the milk pack 

Another Akshayakalpa initiative to build loyal customers is the “Let’s give back the milk pack” campaign started in 2022. Doing right by the planet, Akshayakalpa collects empty milk packs back from customer’s doorsteps. They send these empty packets to one of their partners who recycles the plastic into notebooks which the Akshayakalpa team reuses for their internal note-taking and academic purposes.

By Apr 2024, they have collected over 30,000 kg of milk packets and recycled them.

What’s more? 

Their recycling initiative also puts the classic Ikea effect into action which suggests that users place a disproportionate value to items they have co-created. Akshayakalpa nudges users to rinse, dry, and return the milk packs for faster segregation - guiding them to contribute to a circular economy.

Strategy 3: Society Activations 

Akshayakalpa continues to grow by taking a targeted approach to acquiring customers. They host BTL’s in societies and brand-relevant events across Bangalore, Chennai and Hyderabad. 

However, milk and milk-buying products have a strong brand affinity. Therefore, Akshayalalpa’s offerings at the society events are designed to engage kids in creative activities and get an instant “yes” from the parents on their products

Typical offerings at the society activation events look like:

For Kids: Drawing/ Quiz format competitions themed around organic farming

For parents: Straight value in the following two ways

1. On a ₹2000 wallet recharge, you get a complimentary small bottle of honey, buttermilk, coconut oil, and 200gm paneer. That’s probably free items worth ₹1000 or more right off the bat.

2. On a ₹5000 wallet recharge, along with the above products, a free weekend farm visit including stay and food. What’s unique about the second offering is that it compels you to compare it to getting a free family getaway.

Strategy 4: Digital Awareness - Youtube & Podcasts

The biggest challenge that Akshayakalpa and other organic brands face today is awareness. Akshayakalpa makes numerous videos to educate customers on debunking food myths, farmers’ entrepreneurial journeys, and conscious farming.

Bridging the transparency gap, they also present how they use data to track and ensure their cows and fields are chemical-free and bring truly sustainable food to your table.

In a world of fast-moving consumer goods and 10-minute deliveries, it’s fascinating to see Akshayakalpa bringing grassroots-level changes and taking a strong stance toward building a sustainable tomorrow.

More power to them!

Until next time,

Saurabh 👋