Akshayakalpa Organic to add 1,800 farms in FY23

October 26, 2022

Akshayakalpa Organic, a Bengaluru-based organic dairy products manufacturer, will add 1,800 new farms to its production cluster in order to strengthen its position in the existing markets, says Shashi Kumar, co-founder and CEO of Akshayakalpa Organic. Cluster farms are basically made up of several individual farms that are close to one another, and currently, the company runs 780 such farms to supply products to three cities.

“By July 2023, we will add 1,500 more farms to the Tiptur cluster and 300 farms to the Chennai cluster, of which 100 will go live by January 2023. However, due to the prerequisites for organic certification, going live in the Hyderabad cluster will require two more years,” said the CEO.

The company supplies its products to a total 60,000 households in three cities — Bengaluru, Chennai, and Hyderabad — and has a daily milk production capacity of about 70,000 litres. According to the company, while its primary focus is to expand its business in the existing cities, it also intends to enter newer markets such as Mumbai, Pune, and Kochi.

In FY22, Akshayakalpa generated revenues of ₹117 crore. Kumar explained, “In the last five years, we have grown at a compound annual growth rate (CAGR) of 60 per cent year on year and expect to generate ₹200 crore this financial year.” He added, “Production constraint is a huge challenge and it’s not possible to double every year. So, we need to be conscious of building the business. For the next five years, we expect to continue to grow at a CAGR of 40-50 percent (y-o-y), link 2,000 farms to the markets, and build a ₹500 crore business.”

Farm visit programme

The company runs two farms in Bengaluru and Chennai. Kumar explained that the objective behind developing farms is to create awareness about organic food. The biggest investment in a farm’s development is its formation time, which typically takes a long time, said the CEO. “The entire investment is in developing the farms i.e three to five years and purchasing cows which cost around ₹6–7 lakh.”

According to the CEO, farm visit programmes have paid well in terms of marketing organic foods, “It is working well and is one of the deep marketing strategies of ours. Rather than deploying funds to acquire customers, the education of the customer has helped our business grow,” he added. The company started the programme around two years ago and currently has a footfall of 100 people every weekend, said Kumar.

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