A dairy business struggling with surplus milk during the Covid-19 pandemic has evolved into a growing sweets and savouries chain with more than 50 reported outlets. Bengaluru-based India Sweet House offers an example of how dairy businesses can create new revenue streams by moving beyond the sale of fresh milk and focusing on value-added products.
The business traces its origins to Karma Farms, an organic farming venture started around 2015-16 by entrepreneurs Shwetha Rajashekar and Vishwanath Murthy. The couple operated a 20-acre farm with around 100 cows and initially built the business around fresh milk, paneer and ghee.
However, the direct-to-consumer milk model faced significant challenges during the pandemic. Demand became difficult to manage, while the collection and return of glass bottles added complexity to distribution. With fresh milk having a limited shelf life, surplus production also became a commercial challenge.
Instead of treating the surplus milk purely as a problem, the founders began looking at ways to convert it into products with greater value and a longer commercial window.
Turning Milk Surplus into Value Addition
The answer came through traditional Indian sweets. Milk could be transformed into products such as khova-based sweets and other dairy-rich preparations, allowing the business to capture more value from the same dairy input.
This approach eventually led to the establishment of India Sweet House in 2020. The company’s journey highlights an important principle for the dairy sector: value addition can help businesses reduce dependence on commodity milk prices while creating differentiated consumer products.
India Sweet House initially followed an online-first model, selling through platforms including BigBasket, Metro Cash and Carry and SPAR India. It later opened its first physical outlet in Bengaluru’s Malleswaram in 2021.
The brand positioned itself between conventional neighbourhood sweet shops and premium mithai retailers. Its outlets combine traditional sweets with savouries, snacks and chaats, creating a broader food-retail proposition rather than relying only on packaged mithai sales.
The connection with the dairy business remains central to the brand. India Sweet House says its sweets are made using milk, khova and organic ghee sourced from its farm, while its automated milking infrastructure supports its farm-to-kitchen model.
This integration gives the company greater control over an important part of its supply chain and allows it to build its brand around the quality and origin of dairy ingredients.
From Dairy Farm to Organised Food Retail
The company’s growth also demonstrates how dairy enterprises can diversify through downstream processing. Instead of selling milk as a standalone commodity, businesses can potentially create additional margins through paneer, ghee, khoa, sweets, desserts and other dairy-based foods.
India Sweet House has now expanded to more than 50 reported outlets, with its presence largely concentrated in Karnataka. The company has also indicated plans to expand into additional markets.
According to financial data cited by Moneycontrol from Tracxn, India Sweet House recorded revenue of ₹83.10 crore in FY25. Its EBITDA stood at ₹6.15 crore, while net profit was ₹1.83 crore. The company also raised $1 million from Viney Equity Market in October 2024 in a funding round described as a pre-IPO raise.
For India’s dairy industry, the India Sweet House story illustrates how a supply-side challenge can become a product-development opportunity. The transformation from selling fresh milk to building a branded value-added food business shows the potential of processing, branding and retail integration.
As dairy businesses face changing consumer preferences, distribution challenges and pressure on margins, value-added dairy products could increasingly play a larger role in determining growth and profitability.
