AMUL

ANAND MILK UNITED LIMITED

 Introduction

 The largest food brand in India and world's Largest

Pouched Milk Brand ‘Amul’ is a brand name managed
by Gujarat Co-operative Milk Marketing Federation Ltd.
(GCMMF).

 This name has its origin in the Sanskrit word "Amoolya,"

(meaning Priceless) and was actually suggested by an
employee of Gujarat Co-operative Milk Marketing
Federation Ltd. (GCMMF)
 The Gujarat Cooperative Milk Marketing Federation
Ltd, Anand (GCMMF) is the largest food products
marketing organisation of India and is the apex
organization of the Dairy Cooperatives of Gujarat.

 With a turnover of INR 67.11 billion GCMMF has

created an economic network that links :
• millions of consumers in India and abroad,

• 2.8 million village milk producers,

• a cooperative system that includes 13,141 Village Dairy

Cooperative Societies (VDCS) at the village level,

• further affiliated to 13 District Cooperative Milk

Producers’ Unions at the District level and GCMMF at
the State level.
History

• Condition of dairy farmers

• Plea of dairy farmers and role of Sardar Vallabh Bhai Patel

• Formation of first District Co-operative ‘Kaira’

• Formation of ‘GCMMF’
Condition of dairy farmers

 There was exploitation of marginal milk producers

by traders or agents of existing dairies in the small
town named Anand (in Kaira District of Gujarat) and
Polson Dairy .

 Other problems faced by dairy farmers in Gujrat.

Role of Sardar Vallabh Bhai Patel

• Unfair trade practices and minimal returns angered

dairy farmers.

• So under the leadership of Tribhuvandas Patel dairy

farmers approached Sardar Vallabh Bhai Patel for a
solution.
Formation of District Co-operative
‘Kaira’

• Thus the first District Cooperative was established to

collect and process milk in the District of Kaira in 1946.

• Milk collection was also decentralized and village level

cooperatives were established to organize the marginal
milk producers in each of these villages.

• The brand Amul was formally registered on December

14th, 1946
Formation of ‘GCMMF’

• Later on with the help of Dr. Verghese Kurien and

Shri H M Dalaya this revolution spread to most of
the districts in Gujrat.

• Thus GCMMF came into being in the year 1973.

• Initially, the brand name Amul was with Kaira

district dairy cooperative, but later they decided to
give it to GCMMF
Father of White Revolution

 The father of the White Revolution, Dr. Verghese

Kurien and the World Food Prize & the Magsaysay
Award winner, is responsible for the grand success of
brand ‘Amul’.
AMUL
Business Model
In a recent survey,

 GCMMF ranked amongst the top ten FMCG

firms in the country

 AMUL rated the second most recognized brand

in India amongst all Indian and MNC offerings
What makes AMUL successful???
Business Model

 Objective :
 Deliver profitable and equitable returns to a large
number of farmers for a long period of time

 Additional objective
 Develop the supplier over the long term through
social change.
 Raw milk

Pasteurization

Packaged Milk Dried Milk

Condensed
->Ice cream and ->Skimmed milk
->Ghee, butter, cream beverages powder

Amul’s Supply chain is one of the most complicated in the world

Success depends on

• High collection rate of milk

• Required increasing membership with more village societies

• Better Cattle management- Better milk yield

• Ensure cost to farmers and high quality to customer at low

prices
Developing Demand

 Consumers- Limited Purchasing power

 Modest consumption levels of milk

 Low –cost price strategy

 Products affordable & attractive

Distribution Network

 Dry and cold warehouses to buffer inventory

 Transactions on an advance demand draft

basis

 Just-in-time inventory strategy improves

dealers' return on investment (ROI)

 All branches -dedicated vehicle operations.

Umbrella brand

 Common brand for most product categories

produced by various unions: liquid milk, milk
powders, butter, ghee, cheese, cocoa products,
sweets, ice-cream and condensed milk

 Avoided inter-union conflicts

 Opportunity for the union members to

cooperate in developing products.
Third Party Service Providers

 Unions' core activity -milk processing and the

production of dairy products.

 Marketing efforts , brand development - By GCMMF

 Logistics of milk collection, distribution of dairy

products, sale of products through dealers and retail
stores, provision of animal feed, and veterinary services –
By Third Parties
Co-ordination
 Large number of organisations and entities in the supply chain

 GCMMF and the unions play a major role in achieving control

 Interlocking control - The board is drawn from the heads of all

the unions, and the boards of the unions comprise of farmers
elected through village societies

 The federation handles the distribution of end products and

coordination with retailers and the dealers.

 The unions coordinate the supply side activities.

Best practices

 Small group activities or quality circles at the federation

 TQM program at the unions

 Improvement programs across to a large number of members

and the implementation rate is consistently high

 For example, every Friday, Meeting without fail, between

10.00 a.m. and 11.00 a.m – to discuss quality concerns

 Village societies becoming individual improvement centres

Amul Revolution – Impact
Study
Pre-Amul Era

Over five decades ago, the life of a farmer in

Kaira District was very much like that of his counterpart anywhere
else in India.

His income was derived almost entirely from seasonal

crops.

Milk distribution was by private traders. . As milk is perishable,

farmers were compelled to sell it for whatever they were offered.
Often, they had to sell cream and ghee at throwaway prices. In this
situation, the one who gained was the private trader.

Only one company , a British company(Polson) existed and it

exploited the farmers
The Turnaround

•Farmer’s realization that they had to market milk themselves

to earn better is what led to the establishment of the Kaira
District Cooperative Milk Producers' Union Limited (popularly known as Amul)

•An assured market proved a great incentive to the milk producers of the
district. By the end of 1948, more than 400 farmers joined in more
village societies, and the quantity of milk handled by one Union
increased from 250 to 5,000 liters a day.

Socio-Economic Impact

•The yearly elections of the management committee and its chairman, by the
members, are making the participants aware of their rights and educating them
about the democratic process.

•Voluntary mix of the various ethnic and social groups for common causes and
mutual betterment has resulted in eroding many social inequilibria. The rich
and the poor, the elite and the ordinary come together to cooperate for a
common cause.
•Live exposure to various modern technologies and their application
in day-to-day life has not only made them aware of these
developments but also made it easier for them to adopt these
very processes for their own betterment.

•More than 900 village cooperatives have created jobs for nearly
5000 people in their own villages -- without disturbing the socio-agro-
system -- and thereby the exodus from the rural areas has been
arrested to a great extent.

•Besides, women, who are the major participants, now have a say in the home
economy. Initiated “Mahila Pashupalan Talim Karyakram” for women resource
persons of the member unions

•48 per cent of the income of the rural household in Kaira District is being derived
from dairying. Since dairying is a subsidairy occupation for the majority of the
rural population, this income is helping these people not only to liberate
themselves from the stronghold of poverty but also to elevate their social status.
•CSR sensitive organizational structure – the 3 tier model from
village societies to state cooperatives ensures accumulation of
human capital which in itself leads to development of society and
the economy.

•Amul Relief Trust – formed in 2001 by GCMMF under the Chairmanship of Dr.
V. Kurien.
•The Trust reconstructed 6 schools damaged by the 2001 earthquake
at a cost of Rs. 41.1 millions in Kutch area.

Ripple Effects

•Anand Pattern extended to other districts in Gujarat - Mehsana, Sabarkantha,

Banaskantha, Baroda and Surat where farmers easily adopted Amul’s
gameplan.

•The Himalayan Cooperative Milk Producers’ Union Limited (HIMUL) was

formed at the foot of the Himalayas in West Bengal in 1973 on the same lines
as Amul.It includes both dairy and non-dairy.

•At a later stage oilseeds, fruit and vegetables, salt, and tree sectors also
benefited from it's success.
Institution Building
•The National Dairy Development Board (NDDB) was created in
1965, fulfilling the desire of the late Lal Bahadur Shastri - to extend the success
of the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India.

•Founded by Dr. Verghese Kurien and Dr. Amrita Patel is the current Chairman
of the National Dairy Development Board, Anand.

•96000 cooperatives have been integrated by this to date.

•To promote the development of cooperatives NDDB has set up separate units
and works in close association with a number of national level institutions
Sabarmati Ashram Gaushala (SAG), Bidaj, Animal Breeding Centre (ABC), Salon,
Institute of Rural Management, Anand (IRMA), National Cooperative Dairy
Federation of India (NCDFI), Anand and Foundation for Ecological Security
(FES), Anand, Mother Diary, Delhi.

•Institute Of Rural Management formed in 1979 with Swiss Agency for

Development Coordination and Govt of Gujarat to develop people through
management education.
Marketing and Advertising Strategies
1)Quality
• No brand can survive long if it’s quality is not equal or exceed
customer expectations.
• Incase of food product hygienic, taste, bacteriological &
organoleptic standard –main essence.
2)Value for money
• Customers get more than what they pay.
• Keep price fair & do best to ensure that retailers don’t gain at
the expense of customer.
3)Availability
 Brand available when and where customers want.
 Amul has nation’s finest distribution network.

4)Service
 Committed to total quality.
Product Scope Strategy
“Perspective of the product mix of a company”
Different products of Amul and
its variants
Bread spreads
 Amul Butter
 Amul Lite Low Fat Bread spread
 Amul Cooking Butter
 Delicious Margarine
Pure Ghee
Sweets
 Amul Shrikhand & Amrakhand
 Amul Mithaee Khoya Gulabjamaun
 Amul Basundi

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Milk Powders
 Amul Full Cream Milk Powder
 Amulya Dairy Whitener
 Sagar Skimmed Milk Powder
 Sagar Tea and Coffee Whitener

Sweetened Condensed Milk

 Amul Mithaimate

Fresh Milk
 Amul Taaza Toned Milk 3% fat
 Amul Gold Full Cream Milk 6% fat
 Amul Shakti Standardised Milk 4.5% fat
 Amul Slim & Trim Double Toned Milk 1.5% fat
 Amul Saathi Skimmed Milk 0% fat
 Amul Cow Milk
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Curd Products
 Yogi Sweetened Flavoured Dahi (Dessert)
 Amul Masti Dahi (fresh curd)
 Amul Lite Dahi
 Amul Prolife probiotic Dahi
 Amul Masti Spiced Butter Milk
 Amul Lassee
Chocolate & Confectionery
 Amul Fruit & Nut Chocolate
 Amul Bindazz
 Amul Rejoice
 Amul kesar

Brown Beverage
 Nutramul Malted Milk Food
Amul Ice creams
 Vanilla Royale
 Royal Treat Range (Butterscotch, Rajbhog,
Malai Kulfi)
 Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit
Bonanza, Roasted Almond)
 Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir,
Fresh Strawberry, Black Currant, Santra Mantra, Fresh
Pineapple)
 Sundae Range (Mango, Black Currant, Sundae Magic, Double
Sundae)
 Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies,
Tricone, Chococrunch, Megabite, Cassatta)
 Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips,
Cake Magic)
Milk Drink
 Amul Kool Flavoured Milk (Mango, Strawberry, Saffron,
Cardamom, Rose, Chocolate, Butterscotch)
 Amul Kool Cafe
 Amul Kool Koko

Health Beverage
 Amul Shakti White Milk Food
Product Positioning

Placing a product in that part of the market where it will receive a

favorable reception compared to competing products.
 A mass market player, no premium offerings
 USP – Quality with affordability
 Up against niche players – value addition to customers
 Sheer size and scale of operation
 New offerings for health conscious and vibrant India –

38
 India’s First Pro-Biotic Wellness Ice cream &
Sugar Free Delights For Diabetics.

 Low Priced Amul Ice Creams made Kwality Walls life hell.

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Flank Attack.. Age Wise..
Aug 25 2007
 Amul launches Chocolate milk under brand
name of ‘Amul Kool Koko’.

 This is targeted at teenagers and

youths.

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Nov 11, 2007
 Amul in Multinational Arena With Snack
Launch: “Munch Time”.
Flavors: Masala , Mint and Tomato
 New Product Activity.

Nov 26, 2007

 Amul Launches “Fresh Paneer” (Free From Any Harmful
Chemicals)
Flank Attack—Expanding its Cheese Segment.
Current market share 65%.

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Product Repositioning
 New Competition
 Change in consumer preference
 Wrong original positioning

 Amul marketed bottled water product named

“JALDHARA” but due to less potential in the market it
turned out to be blunder.
 Now Amul is all set to launch bottled water “NARMADA
NEER”.

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Product Overlap

Situation where company decides to compete against its own

brands.
 Powdered Milk
 Health and price Conscious
“SAGAR Vs Amulya”.
USP:
 Sagar is affordable whitener for health conscious one.

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 Cheese Spreads
 Specific Vs General
“Amul Processed Cheese Vs Cheese Spread”
USP:
Cheese spread is highly accepted spread for regular use.

 Milk Drinks
“Nutramul Energy Drink Vs Amul Kool”

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Product Elimination

Product reaches the stage where continued support

is no longer justified where performance is falling
short of expectations, it is desirable to pull the
product out of the market place.

“ It eliminated “JALDHARA” a decade ago as Bottled

water product do not have potential customers”.
Current Market Share

100
90
80
70
60
50 OTHERS
40 MARKET SHARE

30
20
10
0
AMULYA AMUL CHEESE MOZARELLA
BUTTER SPREAD
 Defense Strategy

 Moving consumers from loose milk to packaged milk and

gradually move them up the value chain (tetra pack to
beverages, all available under the Amul brand)
 A sound strategy likely to work.
 Being exposed to a brand, it is natural for a customer to try
more products
 Improving socio-economic condition of the customer
anchors the desire to enhance lifestyle
 Amul defending its turf

 Largest milk brand in Asia marketing more than 30 different

brands of dairy products like cheese, ice-cream, condensed
milk, ready-to-eat pizza, beverages etc.
 Amul is the market leader in ghee and butter
 Amul Kool and Kool Café doing well

 Defending against names like Mahananda, Vijay, Milma and

other co-operative milk brands
 Aggressive moves against FMCG and F&B brands like
Britannia, Nestle and Mother Dairy among others.
 Segmentation
 Wide range of product categories caters to consumers across
all market segments. For example, Amul Kool is targeted at
children, while teenagers prefer Kool Café, as it has a cool
imagery associated with it.

 Segmentation is not as easy in curd and low fat products,

due to mixed audiences, various culinary applications , eg.
ghee, butter and cheese.
“In India, the most used spread is ghee, then butter, cheese,
low fat butter, margarine, cheese spread and mozzarella
cheese.
Targeting

 Changing retail environment

 Striking out on its own, with Amul Outlets or parlors to
deliver consumers total brand experience
 Launched in 2002, there are now 400 Amul parlors across the
country, which contributed 3% to the brand’s total turnover
last year.
High profile locations: Amul parlors are today present on
campuses of Infosys, Wipro, IIM-A, IIT-B, Temples, Metro rail
and railway stations in Gujarat.
Promotion

 Given this wide product portfolio, Amul’s approach is to

promote its brands in a rotational cycle of two to three
years.

 After ice-creams were launched in 1996, the category

was re-visited in 1999, in order to improve availability of
the product and make it affordable.
The focus shifted to cheese in 2001, Amul Masti Chaas in
2004-05 (sales of Masti dahi grew by 25%), Nutramul and
Kool Kafe in 2006 and Amul Koko — cold chocolate drink
in 2007
 Uses a variety of media to communicate
 Most famous is billboard campaign

 The endearing polka dressed girl and pun at various issues

increased brand’s fan following.

 Below-the-line activity has grown too — such as the Amul

food festival, which has been held for the last four year
between October and December in about 50,000 retail
outlets.
 The Chef Of India promo invites hotel chefs to come up with
recipes using as many Amul products as possible, and is
conducted at city, state and national level.
The First Advertising Strategy
1966 sees the creation of the Amul girl by Sylvester daCunha of the ASP
Advertising agency as a rival to the Polson .

In 1967 the first hoarding was put up in Mumbai with the Amul girl.

The tag line of “Utterly Butterly Delicious” came out in October of 1967.

The first Topical ad came out in 1969 at the beginning of the Hare Rama Hare
Krishna movement.

One of the most conservative FMCG entities — GCMMF — spends a mere 1%

of its turnover on promotions.

Amul butter girl is one of the longest run ad campaigns in the country for 43
years.
Entered in the Guinness Book Of World Records for being the longest running
campaign ever.
Digital Advertising
Amul Cyber Store

Amul in Social Networking

Amul Indulges in Second Life marketing – Advergaming

Amul Parlors
Amul Competitors
Butter
 Britannia
 Nestle
Cheese
 Britannia
Baby Food
 Nestle
 Heinz
Dairy Whitener Segment
 Nestle
 Britannia
Ice creams
 HLL
Amul Competitors
Chocolates & Confectionaries
 Cadbury
 Nestle
Pizza
 Pizza Hut
 Dominos
 Nirulas Frozen pizza
Curd
 Nestle
 Mother Dairy
Ultra High Treated Milk
 Nestle
 Britannia
Amul Competitors
Sweet Condensed milk
 Nestle
Cottage Cheese(Paneer)
 Britannia
Milk Additives
 Cadbury
 Smithkline Beecham
Flavored Milk
 Britannia
 Nestle
Period of diversification
 In 1996, B M Vyas, Managing Director, GCMMF,
commissioned the Indian Market Research Bureau
(IMRB) to conduct a consumer survey to identify the
products consumers wanted from Amul .Based on the findings, Amul
entered into the following areas: ice cream, curd, paneer, cheese, and
condensed milk.

 In 1997, Amul launched ice creams after Hindustan Lever acquired

Kwality, Milkfood and Dollops. Positioned as the 'Real Ice-cream,' Amul
Ice cream was one of the few milk-based ice creams in the market.

 In 1999, Amul launched branded yoghurt in India for the first time,
when it test marketed "Masti Dahi" in Ahmedabad first and then
introduced it all over the country
 In January 2000, Amul re-entered the carton milk
market with the launch of "Amul Taaza" in Mumbai.
Amul Taaza was non-sweetened, plain, low fat milk.
The product was positioned as a lifestyle as well as functional product.

 In November 2000, Amul decided to promote mozzarella cheese,

which was used in pizza. The growing demand for mozzarella cheese
from pizza making companies like Pizza Hut and Domino's Pizza was
expected to give Amul's cheese sale an additional push.

 In August 2001, Amul decided to enter the ready-to-eat stuffed

paratha, cheeseburger, cheese and paneer pakoda, and cheese
sandwich segments. The products were marketed under the SnowCap
brand. The SnowCap brand also included tomato sauce and ketchup.
 Why Diversification

 With the liberalization of the Indian economy in the early 1990s, and
the subsequent entry of new players, there was a change in lifestyles
and the food tastes of people. The new team that took over the
management of the GCMMF in the mid-1990s hoped to take
advantage of the change.

 According to some analysts, this diversification was probably not

entirely demand-driven. Being a cooperative, GCMMF was compelled
to buy all the milk that was produced in Gujarat. And with milk
production having increased since the mid 1990s, GCMMF had to make
use of additional milk, and hence the pressure to make and market
more and more processed-milk products.
 Amul had to expand the consumption base of milk-based
products in India. It planned to make its products (butter
and cheese) a part of the regular diet in most households. Amul
launched its new products with the intention of increasing the offtake
of its basic milk products, including cheese.

 This flurry of launches helped Amul broaden its appeal across all
segments. Price was an advantage that Amul enjoyed over its
competitors. Amul's products were priced 20-40 % less than those of
its competitors. Analysts felt that Amul could price its products low
because of the economies of scale it enjoyed.

 The pizzas were expected to increase the sale of its cheese. The entry
into the confectioneries market was another avenue for increasing milk
consumption
 Amul's obsession with keeping down manpower costs
and dealer commissions added to the strength . In ice-creams for
example, Amul's retail commission in Ahmedabad city was 17.5%
which was 10% lower than what competitors offered.

 However, all said and done, Amul seemed to be all set to make steady
progress in the coming years with its products having become quite
popular in both rural and urban households. Said Vyas, "We've handled
liberalization and globalization far better than our transnational rivals.
It has made us fitter than ever."
 Exports
 GCMMF is India's largest exporter of Dairy Products. It has
been accorded a "Trading House" status. GCMMF has
received the APEDA Award from Government of India for Excellence in Dairy
Product Exports for the last 11 years.

 Amul export turnover registered a 93 percent increase, over the previous year
in 2009. Apart from regular exports of branded, consumer-packed dairy
products to the US, Persian Gulf and Far East markets, they exported large
quantities of skim and full cream milk powder. Nutramul, Amulya, Mithaimate
and Amul paneer were launched in the Gulf countries.

 New markets like Sri Lanka ,Madagascar, Russia and Saudi Arabia are being
developed, building a strong base for the future.
 Amul dairy plants have now received ISO 9000 and HACCP certification,
helping it to obtain the required Export Inspection Agency plant certification
for dairy products.
 AMUL’S Indian desserts are very well liked in countries like
Singapore and Malaysia. Amul has list of products marketed to
various countries few of its products are Amul butter, Amul
cooking butter, Amul cheese spread, Amul pizza cheese, Amul shrikhand, Amul
fresh cream etc.

 India's largest dairy brand Amul would soon be seen on the shelves of leading
international stores like Wal-Mart and Mustafa in Singapore after its successful
foray into the United Arab Emirates (UAE).
Mission 2020 of Amul

 Amul envisages that the dairy cooperatives of Gujarat will

have a group turnover of Rs. 27000 crores by the year 2020.
This will be a three-fold increase over its current group turnover of approx. Rs.
9600 crores. Milk production in milk shed area will increase to 231 lakh kg per
day (23.1 million kg per day), at an annual growth rate of 4%.

 Amul will create fresh avenues for growth by tapping the rising demand for
new value-added products. Special emphasis will be given to strengthening
their presence in the large market for liquid milk, in metropolitan cities.

 Plan to double to processing capacity of dairy plants to 20.7 million kg per day,
by 2020. This would include multi-fold capacity expansion for major product
categories including milk powders, Ice-cream, paneer, cheese, ethnic sweets,
curd, ghee and other dairy products.
SWOT Analysis of Amul
Strength
•Demand profile
•Flexibility of product mix
•Technical manpower
•Trust enjoyed by its products
•Strong cooperative
organization
•Introduced TQM
Weakness
•Logistics of procurement
•Competition
•Short self life of its products
•Completely dependent on
villages for its raw material
•Salaries offered is less compared
to competitors

Opportunities Threat

•Value addition •Milk vendors, the un-organized

•Export potential
•Used internet to sell its products
•Introduced hybrid products in
the market
•Exploring foreign markets
sector
•Strong competition from MNCs
• Competition from private dairies
and local milk suppliers
•The yield of Indian cattle still
much lower than other dairy
countries
 Thank You

Questions????