This agri-based startup is helping farmers earn ~20% premium over regular market prices
Updated: Jun 14, 2021
Barosi won the title of "Sustainability Focused Start-up" at Amazon Sambhav, 2021. In this post, we unravel how Durlabh Kumar Rawat came from a rural farming village and left a corporate engineering role to build Barosi, a dairy company providing fresh, quality-assured milk all while creating job opportunities for local communities.
Barosi is a dairy company providing fresh, quality-assured milk with strong roots in the rural villages like the one founder Durlabh Kumar Rawat comes from. The name Barosi stems from the small clay pots prevalent in such villages, heated by wood and dung, which would slowly cook milk throughout the day. Every day when Durlabh came home from school, he would have a pot of milk from this Barosi waiting. When, many years later, Durlabh founded his company, it seemed fitting to give it this name.
It wasn’t always clear that Durlabh would build a dairy company. He grew up in a small, rural village in India with a family from a farming background, and eventually came to Delhi to complete a diploma in engineering. From there, he held a corporate role for 12 years at an automobile manufacturer before finally striking out as an entrepreneur. Durlabh realizes that his background in rural India and his 12 years in Delhi had allowed him to see “both worlds of India,” and was a key aspect in building a business that both caters to well-off citizens looking for high-quality food and to farmers looking for additional economic opportunities. His goal was to create something that would have impact – if he had wanted to make money, he acknowledged, he would have stayed in the corporate world.
When Durlabh started, his aim was to start a farm and supply milk to a cooperative. Cooperatives and unorganized dairy farms hold more than 90% of the milk business in India, but adulteration of the product, with detergent, urea and other substances, is prevalent. The idea was to improve it – and so Durlabh set up a farm, bought 50 cattle, and started producing milk.
“I am a first-generation entrepreneur, so I didn’t have any ecosystem to guide me.”
The initial two years were challenging, in terms of general viability as well as growing the business. At some points, the price they got from milk was not even enough to cover all the company’s costs. “Entrepreneurship is both a passion and a skill set. I didn’t have the skill set,” Durlabh added. However, he and his team met people who started to mentor them. “They told us, if you want to survive, you have to build your own brand, where you can control your own price.” And so, Barosi was born.
Soon, with demand increasing, the company’s herd began growing as well. On average, it takes one cow to produce 10-15 liters of milk. Managing a farm of that scale becomes an increasingly complicated and risky proposition. In addition, Durlabh realized that he was running a successful company, but success was limited to the company, rather than creating social impact around the farm. The team shifted to finding young people locally who shared Barosi’s vision. If those young people managed to arrange money for 2 cows, Barosi would support them with an additional cow. In exchange for high-quality milk, Barosi would pay a premium.
These days, the farmers that work with Barosi earn an approximately 20% premium over other prices in the market. Most have grown their own dairy herd to 7 - 8 cows, and the company has 60 such farmers in its fold, all located within a 10 km radius from Barosi’s own farm. This process of growing the numbers of farmers that Barosi worked with was not without new challenges, however. The key was finding a way to continue to ensure the quality of the end product, which had been Barosi’s brand from the beginning.
Barosi began partnering with another startup in India which brings the Internet of Things to farming. All of the milk procured from farmers goes through this machine, which determines nutritional quality, bacteria, checks adulteration, temperature, and other metrics. Along the way, the milk gets packed by Barosi, and then delivered directly to customers through a subscription model, employing additional delivery personnel along the way. At the end of the supply chain, customers receive bottles of milk with a QR code printed on the milk bottle, which they can scan to learn more about where and when their milk was procured, tested and delivered. The quality process is managed entirely by the third party.
For Durlabh, managing the entire spectrum of the supply chain is one of the most important parts of the dairy business.
“I have a personality where I can understand the customers and stakeholders. Our stakeholders are the rural farmers, but for the customers on the other end, we have to be very customer-centric. Customers are very demanding. They want quality, technology, everything. I understand it. On the other hand, I understand what kind of comfort the farmer has with the technology and how to build those relationships. If I couldn’t speak with the farmers, there might not be that bond where they would feel comfortable selling with us.”
Although these aspects of running a business come naturally to Durlabh, there were many others that proved more challenging. “I am not from a business background. I don’t know how this entrepreneurial skill set works. I was a farmer – I went and bought some cows and started selling milk. I didn’t know how to build a brand. I didn’t know how to see the balance sheet.” These Durlabh has learned through his determination to make Barosi a success. “Barosi for me is day and night. I dream about Barosi.” The mentors Durlabh was connected to were enormously helpful, as was the process of working with Manush Labs. Over the past few years, in addition to building a successful brand, Durlabh has learned more about business fundamentals, the demand for technology, what should be on tech applications, and why investors and everyone in the startup ecosystem are so focused on top-line revenue growth rather than the bottom line – profit. “For accounting and finance, I picked up this skill set and I love seeing the data and growth. Just yesterday we closed the books and we have grown 90% this past year.”
As Barosi continues to grow, it is exploring new partnerships and thinking what its core value proposition should be. It’s hard to choose the company’s top success so far, Durlabh admits, when growth has come from many small, small successes every day. Now, the company is grappling with whether it should remain the sole distributor of its dairy products, or begin to partner with focused logistics providers. They have also been exploring venturing into new products such as ghee and honey – now selling 6-7 different products with the same commitment to quality as its dairy products. In the end, this is why consumers choose Barosi – both for the convenience of fresh milk delivered to their doorstep day after day, and for the trust they have in the product and processes behind it.
At the end of the day, the impact is the part of the business that excites Durlabh the most.
“At Barosi, and in the impact space, it is not just money people are working for. Obviously, it is entrepreneurship – it is not a grant – it is meant for earning money. But if there is naturally this impact story in your business, it makes it much more fulfilling. We aren’t doing CSR or anything like that – the impact is imbibed in our business model where we are scaling and also impacting people.”
The mentors and other support systems that encourage entrepreneurship are an integral part of that impact. “In my childhood,” Durlabh explains, “there was an immense resource problem. I never knew what I had to do with my life. Nobody was there to guide you or suggest – this could be your path. I am happy I am getting this exposure through Manush Labs. This is one of the things I want to replicate – through the exposure I get, if there is anyone in any small place in India who has a dream I should help them achieve it.”