India is an Argo economic country and a major portion of the Indian population is financially

dependent on agriculture. The dairy industry thus plays an important in providing a source of extra
income to the rural people as a basic source of milk in rural and sub-urban areas. The industry is
extended from the milk producers in the rural areas to the consumers in the urban areas through
various interim processes like collection, chilling, transportation, pasteurization, distribution, etc.
The supply of milk largely depends on small unorganized rural farmers. It causes difficulty for
farmers in procuring and capturing large margins of the market. Low milk prices, lack of subsidies,
high cost of feed and fodder, etc. give rise to the high cost of milk production, and lower earnings.
Simultaneously, consumer demand regarding quality, price, time, and flexibility has been changing
continuously. Therefore, now most of the established dairies globally try to become more flexible
towards the needs of consumers. The common issues to deal with are delivery speed, quality, price-
quality, and compatibility.

GLOBAL DAIRY INDUSTRY

Dairy Industry is one of the largest income-generating sectors worldwide. It provides livelihood to
thousands of people. In developed countries like the U.S. and U.K., the dairy sector is largely
corporatized but in developing countries like India, Bangladesh, etc., the dairy industry is dependent
upon the small and marginal milk producers with one to two cows. The quality and quantity of milk
produced by each cow is also a determining factor. For example, the herd size is the same in India
and Poland and yet the quantity of milk produced by each cow is much larger in the latter. The rate
of subsidy in developed countries also high as compared to developing countries because of which it
is difficult for small farmers to export their dairy products. Despite all this, the world dairy industry is
rising at an average rate of 3.0 percent annually and The global dairy market is projected to grow
with a CAGR of 5% over the forecast period (2020 - 2025). In 2018, the global milk output was valued
at 843 million tons, an increase of 2.2% from the value registered in 2017.

The highest number of dairy cows are present in India, followed by the US, South Africa, and the UK.
Even after being the highest producer of milk in the world, the average milk production per cow per
year in India is significantly lesser than the developed countries. Countries like Canada, Japan, Slovak
Republic, South Africa, and Poland have subsidized dairy industries. Ayrshire, Brown Swiss,
Guernsey, Holstein, Jersey, Milky Shorthorn are quite common kinds of cattle reared in many
countries. In developing countries like India, crossbreeds are quite popular but found to be less
productive for dairying. A large portion of milk is procured by cows and buffaloes followed by goats,
sheep, and camel.

New Zealand’s Fonterra, USA’s Dairy Farmers of America, and Switzerland’s Nestle are the top
runners in the dairy processing segment in the world. India’s Amul being at the 21st position
processes only 0.4 percent of India’s total milk production for various dairy products. Despite being
the largest producer of milk in the world, India is lagging in the trading sector.

INDIAN DAIRY INDUSTRY

As we’ve already discussed the dependence of the Indian economy on agriculture, 70% of people in
India are related to the Dairy industry and half of their income comes from the selling of Dairy
products. Still, milk production in India is treated as a subsidiary activity along with agriculture,
unlike western countries where it is an organized activity. A small amount of milk is procured by
each farmer and hence market capture is segregated and low and it further adds up to the difference
in quality and quantity of milk as well. Despite all the challenges, India continues to be the largest
milk-producing country and the graph of milk production is moving in the right direction. This credit
is attributed to the “Operation Flood” which was a rural development program initiated by National
Dairy Development Board (NDDB) in the year 1970.

The objective of this program was to make the nation self-sufficient in milk production. This program
was a huge success and was administered by Dr. Varghese Kurien who is considered as the architect
of India’s “White Revolution” for giving the management skills and necessary thrust to the
cooperatives. Presently the industry is strengthened with 22 state milk federations, 177 milk unions,
110,000 cooperative societies, and more than 12 million milk producers.

AMUL and other successful milk cooperatives constitute about 15% of the organized milk industry in
India. The existence of the rest 85 percent unorganized market can be captured for proper
channelization implicating tremendous scope for the industry to expand. This growth is going to
come from the greater emphasis on the processed foods sector and also by an increase in the
conversion of milk into milk products.

STATE LEVEL INDUSTRY

Some states of India are doing exceptionally well in terms of milk procurement, processing, storage,
and selling. Of all states, 15 states contribute to 90% of milk produced in India. Gujarat, Andhra
Pradesh, Haryana, U.P., Rajasthan, and Punjab are in the top lead and are above the national
average of per capita availability of milk whereas states like Odisha, Tamil Nadu, etc. are still below
the national average. Punjab’s per capita availability of milk is much above the national average
which is found to be 957 gms per day followed by Haryana and Gujarat. Despite the lower level of
milk production, HP comes on the top five-list in this category due to its less population. Due to the
higher population UP’s per capita availability is 279 gms per day which is slightly above the national
average. There is still the need for proper organization of the milk sector in many states of India.

AMUL DAIRY

AMUL stands for Anand Milk Union Limited. It marked the beginning of the Dairy cooperative
movement in India and formed an apex cooperative organization called Gujarat Cooperative Milk
Marketing Federation (GCMMF). The owner of this cooperative is 2.6 million milk producers of
Gujarat, India with a milk collection of 10.8 million liters per day. GCMMF is India’s largest exporter
of the Dairy product. Recently on 18 July, 2020 AMUL’s turnover crossed Rs. 52,000 Crore and the
numbers are increasing since then.

Amul's product range includes milk powders, milk, butter, ghee, cheese, chocolate, ice cream,
cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand, and others. Amul Butter, Amul
Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice
cream, Nutramul, Amul Milk, and Amulya. Amul is Asia’s 1st and the world's 2 largest cooperative
dairies.

AMUL was formed by Tribhuvandas and Dr. Varghese Kurien under the guidance of Sardar Vallabh
Bhai Patel. The aim of forming this union was to empower farmers and protect them from
middlemen like Polson dairy, who takes many parts of farmer's profit and torture them. The success
of Amul is based on the principle of maximum profit to farmers and minimum cost to consumers.
Today, Amul has spread itself not only in all states of the country but also in most countries across
the globe.

Amul's model has demonstrated that it cares for its consumers, producers, and environmental
sustainability.

Amul's competitors

The top 10 competitors in Amul's competitive set are:

● Mother Dairy
● Prabhat Dairy
● Osam Dairy
● Chitale
● Gowardhan
● Kwality Wall
● Adityaa Milk
● Mars
● Hershey
● Britannia Industries Limited.