The Journey of Jai and Anuj Agarwal Who Built a INR 1580 Cr Milk Empire Despite Many Hiccups

No matter which walk of your life you are into, you never have a linear path; there will be smooth and rough edges along the way. It’s all about being focused on your goals, learning from failures and successes, and moving on with a growth mindset. All that and more have been aptly displayed by Jai Agarwal and Anuj Agarwal - who built a milk behemoth i.e. Gyan Diary (annual revenue of INR 1,580 cr as on March 31, 2024) through numerous twists and turns that we see in typical Bollywood masala flicks. Let’s unravel the saga of the Agarwal brothers that will continue to inspire folks with tall business ambitions.

From Tobacco to Dairy Business, Agarwal Brothers Saw Only Failures from 2001 to 2004

Mark the year - 2001 - when Jai Agarwal joined the four-decade-old family business of tobacco after completing his four-year engineering degree from The Scindia School in Gwalior. The family was based out of Kaimganj, around 230 kilometres from Lucknow in Uttar Pradesh. All of a sudden, he changed the path by venturing into a dairy business he had no knowledge and expertise in. Gyan Dairy, a popular milk business in Uttar Pradesh which was going through a financial crisis in the 90s, was searching for a helping hand for revival. Jai joined it, but what happened a year later? The company flopped! 

What’s more, lenders including banks were all after Gyan Dairy. Jai had no option but to join the tobacco business again. His younger brother joined the family business too after completing his graduation from Hindu College in Delhi. Little did they know that the family business was heading for a FULL STOP in 2004 owing to the price war kicked among tobacco players at that time.

Agarwal Brothers Didn’t Lose Hope; They Became More Confident, More Resilient

The failure did not affect the Agarwal brothers as far as their business ambitions were concerned. Soon they expanded with a wide range of products and regained the market share by 2007. What did they do next? They bought Gyan Diary after the company could not repay the loans. They wanted to open a real estate business but put that to the back burner and focused on building the dairy business. 

While the family didn’t approve of the dairy business idea initially, it agreed eventually, much to the joy of the Agarwal brothers. However, the family put a condition. The father ordered both Jai and Anuj to come back if the experiment failed and make no further experiments. 

A Good Start by Agarwal Brothers with Gyan Dairy Before the Downfall 

The brothers enjoyed a terrific run with the dairy business. While the success may not be attributable to their ideas, they should at least be credited for leveraging the booming commodity market beginning 2007. Jai and Anuj began with a Business-to-Business (B2B) model on milk powder and earned massive profits with the same. But as things were going smoothly, the commodity market crashed due to the collapse of Lehman Brothers, a US-based financial services firm, towards the end of 2008. The demand nosedived, leading to a colossal loss of business. 

Jai and Anuj Shifted Focus Towards B2C, But the Plan Didn’t Work Out! 

Seeing the fall of the commodity market, Jai and Anuj thought of a change in the business plan. They took the route of Business to Customer (B2C) model by investing heavily in dairy whitener and ghee. Both products failed to hit the ground running. The duo went back to the B2B dairy model to stay afloat. 

The glimmer of hope came in 2011 when two big national dairy players were seeking a manufacturing plant to expand their operations. Both Jai and Anuj invested heavily in establishing exhaustive infrastructure for milk processing and signed deals with the dairy players. However, the plan didn’t take off as the Agarwal brothers stepped out of the deal at the last moment. 

As Potential Business Losses Were Lurking, Brothers Played a Masterstroke with a Lucrative Price Offer 

Seeing the potential loss, Gyan shifted focus to the B2C business (milk juice) with a distinctive approach. Yes, the Agarwal brothers tapped into the farmers located in eastern Uttar Pradesh whereas their rival companies concentrated on the western part of the state. 

What’s next was a masterstroke. Gyan came with a lucrative price offer for cattle farmers. The company offered INR 40 for every litre procured; it was double the market rate at that time. Farmers were elated and apprehensive at the same time. They had concerns about whether they would receive their dues on time. However, when they received the same on time, farmers smiled and added to the company’s revenue. 

As time went on, Gyan added curd to its product portfolio, which was a massive success too. Today, the company sells 3 lakh kilograms of curd daily, showcasing massive public trust. Agarwal brothers are all over eastern Uttar Pradesh via hyperlocal milk sourcing, working closely with more than one lakh dairy farmers and building a business of animal feed. All these led to quality produce, offering Gyan a competitive edge over other dairy players. As per Anuj Agarwal, the company grossed a revenue of INR 100 crores in cattle feed in 2021.

Even COVID Pandemic Didn’t Stop Gyan; The Business Grew Even More

The painful memories of the COVID pandemic are still fresh among most of us. It was a full stop for many businesses. But not Gyan! In fact, the pandemic helped the company come close to its customers. Both Jai and Anuj launched an app by which customers can receive milk and other products at home. The company claims that it executes 2.5 lakh home deliveries every month.

A Sneak-Peek into the Company’s Business Stats 

Gyan, which began its journey with skimmed milk powder and ghee, has now a shelf full of other products too. These include butter, paneer (cottage cheese), animal feed and curd. The company’s revenues, which stood at INR 564.54 cr in FY 2017-18, soared 82.40% to INR 1,029.75 cr in FY 2021-22. Milk contributes a significant 37.21% of the company’s sales. Skimmed milk powder takes the second position by contributing 21.33% to its sales numbers. Ghee and butter take the subsequent positions with 20.31% and 7.72%, respectively. 

Gyan expanded the retail empire across 52 locations in Lucknow with Gyan Fresh Stores, operated exclusively by the company. Whereas Gyan Select Stores, a franchise business model that operates 20,000 retail stores, is winning consumers’ hearts across 14 locations in Lucknow. 

The company’s revenue now stands at a massive INR 1580 cr. Wow!

So, What Stood Out for Agarwal Brothers?

Courage, determination, and, of course, a lot of disruptive business ideas. They saw opportunities in challenges while staying focused and awake. So, it’s all about backing yourself through the thick and thin and coming up with an idea nobody had before. 

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Story Courtesy - Forbes India

Reference 

Gyan Dairy: How Jai And Anuj Agarwal Built It Into A Milk Behemoth - Forbes India