Sid’s Farm Growth Highlights Challenges in India's Dairy Sector

Sid’s Farm, founded in 2016 and based in Hyderabad, has been working to streamline the Indian dairy value chain. The company reported a 38% increase in operating revenue for FY25, rising from ₹122 crore to ₹168 crore. However, this growth came with substantial cost increases, with total expenses rising 47% to ₹196 crore, leading to a net loss of ₹27 crore, up from ₹10.5 crore the previous year.

The cost structure of Sid’s Farm reveals significant expenses in raw milk and materials, which accounted for 64% of total costs, amounting to ₹126 crore. Employee expenses also saw a 47% increase, reaching ₹25 crore, reflecting the labor-intensive nature of dairy processing and distribution. Additionally, advertising and brand-building expenses nearly doubled to ₹7 crore, and logistics costs exceeded ₹13 crore, underscoring the high costs associated with maintaining a cold-chain distribution system.

Despite these challenges, Sid’s Farm has managed to raise $12.2 million in funding, including a $10 million investment round led by Omnivore and the Narotam Sekhsaria Family Office. This investment indicates confidence in the company's long-term potential, even as short-term profitability remains elusive.

The experience of Sid’s Farm highlights the broader challenges faced by fresh-food startups in India. While demand is strong, the industry's high fixed and variable costs, including farms, chilling centers, and processing units, present significant barriers to profitability. The journey of Sid’s Farm illustrates the need for strategic focus on operational discipline, supply-chain optimization, and sustainable economics in India’s dairy sector.