DEVELOPING B2B SALES CHANNEL FOR AKSHAYAKALPA

PRODUCTS IN THE EXPORT MARKET

BY

SAMADRITA DAN (P41039)

Summer Internship Segment

PRM 41

Submitted to

AKSHAYAKALPA FARMS AND FOODS PRIVATE LIMITED

Faculty Guide: Prof. Pratik Modi

June,2021 - August, 2021

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 ACKNOWLEDGEMENT
Opportunities in life come in form of blessings, and availing those opportunities make a way for
a successful future. Often these opportunities are brought to us by some humans who acts as
catalysts in shaping our lives. The achievement of Summer Internship Segment (SIS) with
Akshayakalpa Farms and Foods Private Limited would not have been conceivable without the
help and handholding of different individuals in the association. This report is a result of efforts
and help of several individuals and groups associated with me and would not have been
impossible without the kind co-operation and contribution of these people from different
institutions.

I am indebted to IRMA and our SIS coordinator Professor PKV Kishan for giving me this
golden opportunity.

I would like to express my heartfelt gratitude to Professor Pratik Modi who is my esteemed
faculty guide under whose guidance this report shaped up.

I would like to thank Ms. Lekha Mallavarapu-Category Manager (Akshayakalpa Farms and
Foods Private Limited), Mr. Rajesh Babu -COO (Akshayakalpa Farms and Foods Private
Limited) for intellectual guidance and generic support throughout the internship.

Last yet not the least, I might likewise want to thank our Placement Committee and Mr. Alpesh
Macwan, for their diligent work and true exertion in bringing this venture and giving us this
special chance.

Samadrita Dan
(p41039)

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 EXECUTIVE SUMMARY
I. Title: Developing B2B sales channel for Akshayakalpa products in the export market
II. Organization: Akshayakalpa Farms and Foods Private Limited
III. Reporting Officer: Ms. Lekha Mallavarapu
IV. Faculty Guide: Prof. Pratik Modi
V. Participant's Name: Samadrita Dan
Background: Akshayakalpa, a Tiptur (Karnataka) based organic milk dairy focusses on
molding farmers into being farm-entrepreneurs through the means of organic dairy farming
practices. In order to expand its customer base, Akshayakalpa is looking forward to exporting
its products like ghee.
Objectives and Scope of the study: The objective of the study was to develop a detailed
plan for the export business of Akshayakalpa, studying the regulatory measures for export
and making necessary recommendations.
Methodology: Secondary research was carried out on project deliverable, which was followed
by primary data collection. Research questions and research strategy for primary data collection
were made by studying research papers, articles, and commentaries in journals and open-access
publications. Primary research was carried out by framing research questions and by applying a
definite research strategy. Simple random sampling and convenience sampling techniques were
used in selecting patrons (for tender coconut sampling project).
Source of Data: Data figures were taken from India Stat, EPW, CMIE and WTO. Primary
data about the trade margins and pricing was collected after conducting semi-structured
interviews with a sample size of 10 players. The interviews were conducted with mainly the
export merchants. Secondary data about these 10 players and about other necessary
information was collected from the internet.
Major findings: As per the international readiness assessment conducted, there is a consensus
throughout the company hierarchy to pursue an aggressive export strategy and the company
executives are also aware of the financial and the human resources that are required to be put in.
The company has accumulated the know-how of the manufacturing process and understands the
time taken to realize international success. Products are 100% organic and are of high quality
which keeps it at par with the international standard quality. Presently, the company is not having
any certifications (like Halal, USDA etc.) which is mandatory for exporting products and this is
acting as a roadblock to start off.
Conclusions drawn: Having been in the business for 10+ years, the company has built
some long-lasting relationships. Horizontal management structure is followed, so decisions
are quickly made which provides greater flexibility than the bureaucratic companies and
thus have a competitive advantage.
Recommendations: The most effective way to get on to the export business is by expanding the
product portfolio by introducing new products with comparatively longer shelf life (like whole
milk powder, skimmed milk powder, khoya etc.). The company has to optimize its online
presence as well as capitalize on the international market and maintain a steady optimum cash
flow to boost the exports. It also has to negotiate agreements and commissions with its export
partners.

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 TABLE OF CONTENTS

Serial Number Heading Page Number

I Acknowledgement ii

II Executive Summary iii

III List of figures vi

IV List of tables vii

V Annexures viii

1 Introduction

1.1 About the organization 1

1.2 About the industry 2-3

2 Statement of Objectives 4

3 Methodology 5

4 Domestic Market Scenario of 6-7

Akshayakalpa

5 International Readiness 8-9

Assessment

6 Pricing Strategy 10

7 Ways to Export 11

8 Payment Process 12

9 Phase Wise Export Plan 13

10 Closing a business deal 14

11 Challenges faced 15

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12 Suggestions 16

13 Additional Projects

13.1 Launch of tender coconuts 17

13.2 Daily BB Pricing Tracker 17

13.3 Curd Consumer Survey 18

13.4 Competitor Analysis 19

13.5 Sourcing Repository 19

14 Annexures

14.1 Export Brochure of Ghee 20-24

14.2 Exporters and Sourcing 25

Database

14.3 Google form for Tender

25
Coconut Rollout

15 References 26

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 LIST OF FIGURES

Figure Number Description Page Number

Global Organic Dairy Market
1 3
(By Type)

2 Global Organic Dairy 3

Market (By Region)

3 Ansoff Matrix 6

4 BCG Matrix 7

5 BB Daily Pricing 17

6 Curd Churn Data 18

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 LIST OF TABLES

Table Number Description Page Number

Timeline and Course of
1 5
Action followed to complete
the assigned project

2 Payment Methods 12

3 Decision Matrix 13

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 LIST OF ANNEXURES

Annexure Number Description Page Number

Export Brochure of ghee
14.1 20-24

14.2 Exporters and Sourcing 25

Database

14.3 Google form for Tender 25

Coconut Rollout

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ix
1.INTRODUCTION

1.1 About the organization

Akshaya (Infinite) + Kalpa (Imaginations) = Unlimited Possibilities

Akshayakalpa, A Tiptur (Karnataka) based Organic Milk Dairy focusses on molding farmers into
being farm-entrepreneurs through the means of organic dairy farming practices. The company
was co-founded by Mr. Sashi Kumar and Dr. GNS Reddy in 2010 and since then it has been
serving a customer database of more than 40000 and has almost 600 farms. Akshayakalpa, being
the first organic certified milk company in India, has a wide range of products under its portfolio,
that includes milk and milk-based products. The company currently operates in Bengaluru,
Chennai and Hyderabad. The company has a vision to completely transform the livelihood
driven farming operations into wealth creating opportunities for the farmers and to enable access
of wholesome milk to its consumers.

Automation at farm level ensures quality milk production and Akshayakalpa milk remains
untouched throughout the production process. The cows at the farms are fed with home grown
plants and a tree-based diet and are allowed to roam around freely with 24*7 access to water and
healthy organic fodder in a stress-free environment. They aren’t injected with hormones or
antibiotics to boost milk production. The automated milking process ensures that organic milk is
maintained at 4°C in a continuous cold chain. The farms are cleansed free from any kind of
chemicals, pesticides and synthetic fertilizers. Cow Dung Based biogas systems produce
electricity for the milking systems and other equipment. All the farms are self-sufficient in water,
food and power supply, which makes them truly sustainable.

Akshayakalpa has been into the business for 11+ years and has gained unrivaled expertise
leveraging the best of technology and traditional practices to deliver the highest quality milk. For
the last financial year, there was 71% growth reported. It has 40+ SKUs in its portfolio which
includes products like butter, curd, buttermilk, cheese, milk, curd. The company is into
aggressive development of new products and is launching products like flavored yogurts, bread,
flavored milk etc. The company is currently having certifications from Jaivik Bharat, India
Organic and Aditi Organic.

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1.2 About the industry
Organic dairy products come from animals that have been reared using organic farming methods.
These products are preservative-free and high in antioxidants, vitamins, omega-3 fatty acids, and
conjugated linoleic acid when compared to typical dairy products (CLA). These products also
provide a number of health benefits, including improving metabolism, enhancing immunity,
reducing muscular and joint discomfort, and lowering cancer and heart disease risks. Consumers
are becoming more aware of the consequences of consuming synthetic chemicals as the
frequency of chronic and lifestyle diseases rises. As a result, there has been a rise in the demand
for organic dairy products worldwide.
Many governments are pushing conventional farmers to adopt organic farming practices by
initiating educational campaigns and giving technical and monetary help. Under the National
Horticulture Mission, for example, the Indian government is providing incentives for the
development of natural food products. Similarly, the EU has enacted new criteria for organic
production and labelling in order to ensure that farmers and operators have a level playing field.
Apart from that, through strengthening the distribution and supply chain of organic dairy
products in tandem with the expanding online food retail industry, these products are becoming
more accessible all over the world. Furthermore, technology developments for generating
revolutionary low-fat, low-sodium, and low-sugar products are expected to fuel demand in the
coming years.
Organic fluid milk currently accounts for the majority of the total global market. Supermarkets
represent the largest segment as they attract more buyers and are generally located in the central
parts of cities. They have also gained popularity due to the availability of more shelf-space and a
large number of products to choose from. The market is fragmented in nature owing to the
presence of a large number of global as well as regional manufacturers who are competing
against one another in terms of prices and quality. There is a tough competition in the market
which makes it difficult for the local players to survive.
The global organic dairy market reached a value of USD 20.23 billion in 2020 and is expected to
grow at a rate (CAGR) of 6.8 % during 2021-2026. Export of dairy products from India stood at
186 million USD while export of organic products from India grew 51 % during fiscal year
2020-21 compared to previous year. Major drivers of the market included rising disposable
income, increasing population and increasing health consciousness. Furthermore, enhanced

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formulations and new product launches is increasing the growth of the organic dairy industry
globally. Also, Consumer Staple Sector faced a positive impact due to COVID-19 outbreak and
registered a high growth rate which also had a positive impact on the market.

Figure 1: Global Organic Dairy Market (By Type)

Figure 2: Global Organic Dairy Market (By Region)

Source: Wikipedia

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2. STATEMENT OF OBJECTIVES
Akshayakalpa is looking forward to expanding its customer base and thus is going to start the
export business. The objective of the study was to develop a detailed plan for the export business
of Akshayakalpa products (specially ghee), studying the regulatory measures for export and
making necessary recommendations. This export marketing plan is to assist Akshayakalpa in the
creation and execution of an international strategy. This is accomplished through evaluating
current company conditions, investigating global trade patterns, identifying and prioritizing
promising international markets, identifying market entry strategies, and providing a step-by-step
guide to implementation. The suggestions included in this report are mostly based on primary
research and current company practical experience is also considered. The report focuses
primarily on market data; some political and economic risk data is also taken into account. The
market data provided should help company executives decide which markets to enter. This plan
should be approached as a living document, able to be updated and revised in response to market
conditions and lessons learned. To the end, an exhaustive list of references has been included in
the Appendix, and all information sources have been documented throughout the report.
General Goals of Akshayakalpa (Concerning Exports) -
Goal 1: Akshayakalpa has grown by 65%+ over the past 2-3 years in large part. With this export
marketing plan, Akshayakalpa aims to develop and implement a proactive international strategy
to assist the company in growing sustainably by testing assumptions against outside research and
by properly allocating resources to support this effort.
Goal 2: Identify emerging markets with growth potential. Become the market leader in these
markets to offset growing international competition in mature markets.
Goal 3: Develop international expertise, whether in-house or through a team of outside experts,
in order to ensure long-term success in international sales. This includes solving existing export
questions, creating support strategies for international clients and providing education to key
staff members.

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3. METHODOLOGY

Secondary research was carried out on project deliverable, which was followed by primary
data collection. Research questions and research strategy for primary data collection were
made by studying research papers, articles, and commentaries in journals and open-access
publications. Primary research was carried out by framing research questions and by applying
a definite research strategy. Simple random sampling and convenience sampling techniques
were used in selecting patrons (for tender coconut sampling project).

Data figures were taken from India Stat, EPW, CMIE and WTO. Primary data about the trade
margins and pricing was collected after conducting semi-structured interviews with a sample
size of 10 players. The interviews were conducted with mainly the export merchants.
Secondary data about these 10 players and about other necessary information was collected
from the internet.

Table 1: Timeline and Course of Action followed to complete the assigned project

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4. DOMESTIC MARKET SCENARIO OF AKSHAYAKALPA

Presently, Akshayakalpa has 40+Skus in its product portfolio and the company is in its
expansion phase. So, besides market penetration and new product development, diversification
of its product portfolio and developing market in new regions is equally important. As per the
products of Akshayakalpa are considered, Ghee is neither able to capture a proper market share
nor is it able to grow as compared to other products. Thus, the best way to generate revenue
from ghee is by exporting it.

Figure 3: Ansoff Matrix

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Figure 4: BCG Matrix

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5. INTERNATIONAL READINESS ASSESSMENT
To understand whether the company is ready to export or not, 4 factors were taken into
consideration and an assessment was done. The following internal aspects were analyzed to
determine feasibility of Akshayakalpa’s export operations expansion:
Organizational Readiness: From the CEO throughout the company hierarchy, there is a
consensus within the organization to pursue an aggressive export strategy. Company executives
understand the time commitment to realize international success, and are aware that they will
have to dedicate a considerable amount of human and financial resources to the international
trade expansion.
Company Readiness: Having been in business for 11 years, Akshayakalpa has built lasting
business relationships and has accumulated considerable know-how of their manufacturing and
customer service processes, creating a strong domestic brand. The company employs a horizontal
management structure, which allows for decisions to be made quickly and provides for greater
flexibility than that of a larger, more bureaucratic company. These characteristics provide a
competitive advantage and make it difficult for newer companies in the industry to compete as
efficiently. With this being said, the company owner and executives are committed to
implementing an international strategy, and they understand such a strategy is long term.
Financial Readiness: Akshayakalpa has a steady positive working capital position with sales
growth trending up approximately 70% over the past four years. Management understands that
an export strategy may require using short-term profits to achieve long-term gains. The company
should have adequate cash, savings, or access to capital to finance production and marketing
efforts. Management should also understand that the company may need to wait longer for
payments. The more direct or aggressive the expansion plan, the more cash is required. Each
investment must be balanced against the expected profit opportunities and their impact on
building long-term owner and shareholder value of the company.
Product Readiness: Akshayakalpa’s competitive advantages come not only from experience but
also because they offer a large certified organic product line catering to the customers. Products
are known for their high quality and carry the internationally-recognized standard of quality.

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The most important product to be offered internationally is Ghee and Germany is the topmost
importer followed by France and Netherlands. AK ghee is certified organic and replicates the
homely childhood process. The Ghee market is growing globally and Ak is mainly trying to
capture those merchants/ exporters who have clients at high end restaurants, hotels etc. The B2B
application segment is expected to exhibit the fastest CAGR of 10.2% from 2020 to 2027 owing
to the use of the product as an essential ingredient in some of the most coveted gourmet foods,
including biryani, in restaurants and hotels across the globe.

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6. PRICING STRATEGY

The suggested pricing strategy at least for a year is competitive pricing. There are many small
fragmented players and thus pricing should be such that the exporter is ready to keep the
products in the warehouse. After a year or so, depending on the growth and market response, the
strategy can be changed. If the growth is less than 10 %, the company can think of lowering the
price, if it's between 10-25%, then the company can continue with the competitive pricing and if
it's above 25 % then it can increase the price (Premium pricing) so as to realize maximum profit.

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7.WAYS TO EXPORT

Broadly, there are two ways of exporting (Direct exporting and Indirect exporting) but for the
initial time period, indirect exporting i.e., exporting with the help of merchants/agents will be
convenient. Though low cost is involved in this case, there is little control over the products
involved. After setting up the base, the company can go on with direct exporting in which though
the cost involved is more, the company will have direct control over the products.
The negotiation for margins as collected from primary data, starts at 15-16% but it can go upto
25%. Typically, it hovers around 20-23%.

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8. PAYMENT PROCESS

Table 2: Payment Methods

To realize the payment of products on time, the company should go for either Cash in Advance
method of payment or Letter of Credit (LC) method. In Cash in Advance method, the payment is
done before shipment and thus there is almost no risk involved. Similarly for LC method, the
payment is done just after shipment and in this case also, negligible risk is involved.

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9. PHASE WISE EXPORT PLAN

Currently, the company will go for indirect exporting as suggested by me. But in future if the
company wants to go ahead with direct exporting, this is the phase wise plan that was created.
The plan comprises three phases - Initiation Phase, Transition Phase and Expansion Phase.
The first or the initiation phase should be focused on capturing the market with high trade
potential coupled with low trade barriers. Second/Transition Phase should be used to go further
to capture the markets with high trade score and moderate trade barriers. Finally, the last phase
will include capturing the remaining market with high trade potential and high trade barriers
should be capitalized. A decision matrix was done by me so as to show which all regions should
the company first target to capture.

Table 3: Decision Matrix

After the research part was done, I prepared an export brochure for ghee (Annexure 13.1) and
paneer of Akshayakalpa

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10. CLOSING A BUSINESS DEAL

I was asked by the company to close a business deal in the export market. As the company
currently has no certifications, I applied for HALAL and USDA Certifications (Halal
certification is a process which ensures the features and quality of the products according to the
rules established by the Islamic Council that allow the use of the mark Halal. It is mainly applied
to meat products and other food products such as milk, canned food and additives. USDA
Organic certification enables the organic products to be marketed in the United States).
A database of exporters was created and out of that database I contacted exporters, convinced
one among them. Ghee samples of Akshayakalpa were sent to him and within a week or so, the
company, through me, received an order of 5-liter ghee to be exported to UAE. The written part
of the deal was settled and the actual products will be sent as soon as the company gets the
HALAL certification.

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11. CHALLENGES FACED

The main identified challenges in front of the company as well as that I faced includes -
● Meeting international quality standards of ghee and other products that the company is
planning to export.
● Price competitiveness should be maintained keeping in mind the certified organic aspect
of the company.
● Process and production innovation and efficiency seems to be the need of the hour.
● The company needs to adopt some innovative marketing strategies in the international
market.
● Lack of certifications as well as lack of a dedicated exports management team.

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12. SUGGESTIONS

In my humble capacity, I tried to suggest few things which include-

● Expanding the product portfolio by introducing products with longer shelf life and greater
importance in the international market. (E.g.: WMP, SMP, Khoya, Cream Cheese, Whey
Protein etc.)
● The availability of short and (especially) long-term credit is crucial to exporters
● Making the most of government schemes
● Optimizing the company’s online presence
● Cash flow should be optimized for boosting exports
● Capitalize on the international market
● Need to negotiate agreements and commissions with its export partners.

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13. ADDITIONAL PROJECTS

13.1 Launch of Tender Coconuts

Conducted a sample survey of 80 customers from a 200 odd customers list provided by the
customer relations team. Made calls to the selected patrons, sent them organic tender coconut
samples, floated out a google form, collected their valuable feedback and analyzed the data
received. After 3 days the product was launched in the Akshayakalpa app and the company
received an overwhelming response of 30 orders on the first day and an order of 175 tender
coconuts within a week.

13.2 Daily BB Pricing Tracker

Akshayakalpa is planning to launch organic vegetables directly from the farms and I was asked
to track the prices of certain fruits and leafy vegetables for almost one and a half month so that
the company can have an idea of how the price of vegetables and fruits changes daily and what's
the future price that is going to be.

Figure 5: Daily BB Pricing

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13.3 Curd Consumer Survey
To understand why there was a churn in curd data, I also conducted a consumer survey. For that,
I shortlisted 240+ customers from a list of 1000+ customers received from customer relations
team and successfully conducted telephone interviews of 85+ patrons and analysed the reason for
decrease in curd sales.
Findings:
● Nearly 22% (19/84) customers faced quality/taste issues and most of these were seen in
pouch curd SKUs as compared to set curd SKUs
● 42% customers who faced quality issues showed readiness to try out the new improved
curd sample.
● It was also observed that it is difficult to convert customers who make curd at home
(From Akshayakalpa milk) as they are satisfied with the homemade curd and the quantity
also appeals to their need.
● Approximately 60% of customers either have very less usage of curd at home( which is
why they order occasionally) or they make it at home.

Figure 6: Curd Churn Data

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13.4 Competitor Analysis
I conducted competitor analysis of products such as Yogurts, Cereals, Breads, Flavored Milk,
Mishti Dahi and Lassi (Akshayakalpa is planning to launch all the aforementioned products)
taking into account factors like price, SKU, ingredients, nutritional info, manufacturing and
marketing address, marketing info and shelf life. The purpose of the competitor analysis was to
understand the competitors' strengths and weaknesses in comparison to its own and to find a gap
in the market. It will also help the company to know how it can out-do its competitors in certain
areas.
13.5 Sourcing Repository
The company is launching new products almost every week and it now wants to launch flavored
yogurts, mishti dahi, flavored milk, etc. and for that, ingredients such as berries, saccharin is
required from certified organic sources. I was given the task of preparing a repository of the
companies who can provide Akshayakalpa with organic certified sourcing ingredients. I created
a database, called up the executives of the concerned companies and provided Akshayakalpa
with 12 genuine sources.

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14. ANNEXURES

14.1 Export Brochure of Ghee

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22
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14.2 Exporter and Sourcing Database
The database created by me for exporters’ and sourcing agents’ contact details can be accessed
from the link below:
https://docs.google.com/spreadsheets/d/1QuLJrNb-dkdxj1QmaZKgR8z-
I9DUlpyb6rWAexowC0Y/edit?usp=sharing
14.3 Tender Coconut Form
The form floated to collect responses about tender coconut from patrons can be accessed from
the link mentioned:
https://4eyes.io/s/6jicH/

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15.REFERENCES

• http://apeda.gov.in/apedawebsite/SubHead_Products/Dairy_Products.htm
• https://www.thehindubusinessline.com/economy/agri-business/organic-products-exports-
rise-over-80-times-since-2002-03-to-record-14-b-last-fiscal/article34478666.ece
• https://www.eximbankindia.in/Assets/Dynamic/PDF/Publication-
Resources/ResearchPapers/57file.pdf
• https://www.bizmove.com/export/m7e.htm

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