India’s food safety regulator on Tuesday ordered all states and Union territories to launch an enforcement drive against adulterated milk and milk products. (Pixabay) Summary Tighter regulation, increasing health awareness and fresh capital are helping organic dairy brands deepen farm control, strengthen traceability and test whether premium pricing can scale beyond niche urban consumers. Bengaluru/New Delhi: A renewed crackdown on adulterated dairy products, combined with a shift among urban consumers towards farm-to-table food, is reshaping the dairy market in the world’s largest producer of milk. Companies like Akshayakalpa Organic, Two Brothers Organic Farms, Sid’s Farm and Anveshan, which produce natural or organic milk, ghee and other milk products, stand to gain. Banking on premium portfolios that include organic milk, A2 ghee, curd and yogurt, these companies are positioning themselves as credible alternatives to loose and mass market dairy products in urban markets, where the trust deficit surrounding counterfeiting persists. A2 dairy products contain only the A2 type beta-casein protein, which makes it easier for the human body to process. Their pitch, which includes traceable sourcing, controlled farm practices and minimal processing, is increasingly appealing to health-conscious middle-class households. For Mumbai-based consultant Ananya, the switch to organic dairy followed repeated concerns about milk purity. “I started buying farm brand milk after my daughter got sick twice,” she said, adding that the higher prices feel justified due to claims of transparent sourcing, consistent taste and direct access to farms that offer reassurance of quality. Akshayakalpa, based in Tiptur in Karnataka, manages 2,700 farms and has encouraged efforts to control adulteration by introducing daily farm-level tests for antibiotics and toxins. “There is a lot of consumer skepticism about quality. We have now opened our farms for consumers to inspect and familiarize themselves,” says Shashi Kumar, founder and chief executive officer of the company. India’s food safety regulator on Tuesday directed all states and Union territories to launch an enforcement drive against adulterated milk and milk products, including paneer and khoya. This includes improved inspections and testing across the entire dairy value chain, driving increased consumer scrutiny about purity and sourcing. In August, the Food Safety and Standards Authority of India suspended Dindigul-based AR Dairy’s license for ghee due to adulteration and false information, Mint reported. Investor interest The developments coincided with increased investor interest in organic and natural food businesses. Several farm-led dairy and staple food brands have raised growth capital in the past year to expand capacity, strengthen cold chain logistics and broaden their direct-to-consumer and modern retail presence. In October, Two Brothers Organic Farms, which sells A2-grown ghee, khapli atta, peanut butter, honey, pickles and cold-pressed oils, raised ₹110 crore in a Series B funding”>₹110 crore in a Series B funding round led by 360 Narotter ONE investment office, Rainmat Assaria, Rainmat, the Family Office, Rahul Garg of organic food brand Nourish You raised nearly $2 million in March, led by SIDBI Venture Capital, while Akshayakalpa is said to be in talks to raise ₹350 crore from Temasek’s ABC Impact and others, according to Entrackr. 1,900 crore to create a ‘health and wellness platform’ in April 2025, which sells organic foods under the ₹ 472 crore category, said Akshali Shah, executive director of the Pune-based Parag Milk Foods, which launched its premium milk in 2011, is expanding its presence across the top metros. Shah said premium dairy is no longer a niche trend, reflecting a fundamental shift in how Indian consumers think about food and nutrition prioritize provenance. These are consumers who read labels, ask questions and are willing to pay a premium for products that offer real differentiation, transparency and trust,” she said. “They are typically urban professionals, young parents and households who see food as an investment in long-term well-being rather than a mere daily necessity.” Price premium However, the portfolio of organic and natural products comes at a huge price premium. Two Brothers sells one liter of A2 Gir Cow-Cultured Ghee for ₹ 3,370, while Akshayakalpa prices its one-litre bottle at ₹650. Sumit Keshan, managing partner at Wipro Consumer Care Ventures, said there is a market for these price points and some of that is built over a period of time regular oil, but health wise it is on another level. If you have a certain offer and quality, repeat purchases are very high. There is a market price point of ₹1,800-2,000 per liter for ghee, for oils it is ₹370-360. Clearly, for some consumers, health comes first. Not everyone can afford it.” Increasingly, these companies are doubling down on deeper farm involvement, investing in long-term relationships with dairy farmers, on-ground veterinary support and feed control, while strengthening cold chain and processing infrastructure. The strategy aims to ensure traceability, consistent quality and supply reliability as they scale premium dairy products in urban markets. Akshayakalpa’s premium pricing will aid its expansion plans. It is looking for new farming groups closer to its biggest markets, minimizing the transport of milk and other products that have a shorter shelf life. “We also keep farmer profitability in mind. The cost of producing milk is rising and farmers need to be compensated much better than the industry standards,” noted Kumar. Farmers and customers Two Brothers’ Organic Farms, located near Pune, will continue to invest in technology that supports farmers and also expands to consumers by providing traceability, said co-founder Satyajit Hange. from sowing to harvesting, irrigation practices, pest management, and more. It took us three to four years to build this system,” he said. Hange noted that it is also expanding its presence abroad, with the US and UAE already accounting for about 20% of its overall business. “Our prices are premium compared to the wider market, but the idea is that with scale, we can pass those savings on to consumers and lower prices. There are also some categories where we are experimenting with more aggressive pricing, such as cold-pressed oils and jaggery powder,” said Hange. “Prices at around ₹120 per 500 grams (for jaggery) are very competitive because we have our own manufacturing units and our own farms. With scale, the intention is clearly to pass on efficiencies to consumers and reduce prices over time.”