#amul – Eduindex News

Anand Milk Union Limited, a brand so distinctively Indian has been a part of our lives for nearly five decades now and still is able to touch a chord in our hearts. Brand Amul has grown as a dynamic factor which protects the interests of producers and consumers of Indians and it is a symbol of many aspects of high-quality products sold at reasonable price, of the genesis of a vast co-operative network, of the marketing savvy of a farmers’ organization, and of a proven model for dairy development.

In 1946 the colonial government of Mumbai had the rights of the procurement of milk from the villages of Kaira district. The milk was to be supplied to the government for distribution in Mumbai. The firm, Polson dairy in turn appointed contractors for collecting milk from these villages. The farmers found the contractors entirely unreliable in collecting the daily milk supply and paying them what they considered to be unfair and insufficiently remunerative price. This state of affairs was not tolerated by the farmers; they retaliated and refused to supply milk. Hence they formed a co-operative under the guidance of Sardar Vallabhbhai Patel and Morarji Desai and eventually won the right to collect milk in the district and also sell it to the Government.

The co-operative was started with an initial collection of just 250 liters a day. This was the beginning of the Kaira District Co-operative Milk Producers’ Union, which is now better known as AMUL which was formally registered on December 14, 1946.

Amul inspired ‘Operation Flood’ and credited to bring the ‘White Revolution’ in India. It began with two village cooperatives and 250 liters of milk per day and it distributes over a million liters of milk per day, collects and processes various milk products. By managing milk supplies from the cattle farmer and sending it straight to the factory, it’s been able to eliminate the middleman. Amul has become a symbol of the aspirations of millions of farmers.

With ‘White Revolution’, we cannot ignore the remarkable contribution of Dr. Verghese Kurien who is better known as the “father of the white revolution” in India and his name is synonymous with the Amul brand. He is also called as the Milkman of India. For his outstanding input he has earned many accolades and awards that include: Ramon Magsaysay Award for Community Leadership, Padam Shri, Padam Bhushan, Krishi Ratna Award, Wateler Peace Prize Award of Carnegie Foundation and many more.

The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the District level which in turn is further federated into a Milk Federation at the State level. Three-tier structure was set up in order to delegate the various functions; milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. Three-tier structure was first developed at Amul in Gujarat and thereafter replicated all over the country under the Operation Flood Programme, it is known as the ‘Amul Model’ or ‘Anand Pattern’ of Dairy Cooperatives.

The effects of Operation Flood Programme are more appraised by the World Bank. An incremental return of Rs. 400 billion annually have been generated by an investment of Rs. 20 billion over a period of 20 years. This has been the most beneficial project funded by the World Bank anywhere in the World. One can continue to see the effect of these efforts as India’s milk production continues to increase and now stands at 90 Million Metric Tonne.

AMUL is recognised as the country’s largest milk producing cooperative. Based in the village of Anand, it expands exponentially. Originally marketed by the Kaira District Cooperative Milk Producers’ Union, Anand, it was taken over by the Gujarat Cooperative Milk Marketing Federation (GCMMF) in 1973 and further it joined hands with other milk cooperatives and now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen district level plants (unions) under the overall supervision of GCMMF (Gujarat cooperative milk marketing federation ltd).

Amul has a wide spread supply chain network across the country. Its products are available in over 500,000 retail outlets across Indian through its network of over 3,500 distributors. There are 47 storehouses with dry and cold warehouses to buffer inventory of the entire range of products.

Amul network follows an umbrella branding strategy i.e a common brand for most product categories produced like liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk. AMUL is considered as India’s best known local Brand across all categories.

In fact, it is not just the core values at Amul that have remained the same; since long the core team associated with the brand is still the same. Even the advertising agency hasn’t changed, and Da Cunha and FCB Ulka, have played a pivotal role in the growth of Amul.

Amul’s unique marketing strategy is really surprising. Despite of the fact that in today’s business world advertising plays a vital role to marketing a product, Amul does not spend more than 1% of total turnover for marketing, compared with 7-8 % spent by most of food and consumer product companies.

With top of mind use of its jingle, Utterly Butterly Delicious and animated Amul girl, campaign- Amul brand has set a longest running advertising Campaign and it is a world record that got registered its name in Guinness World Record and has won the many accolades. Amul features in top 100 Brands of Asia.Competing with other international brands like Nastle, Dutch Lady, Dumex etc it has been ranked as the best and number one dairy brand from India.

From a sales turnover of Rs 1,114 crore in 1994-95, Amul’s sales have risen substantially to Rs 9,774.2 crore in 2010-11. Amul is all set to fight in the global arena and has entered overseas markets such as Mauritius, UAE, United States of America, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries.

The Gujarat Cooperative Milk Marketing Federation Ltd. cannot be viewed simply as a business enterprise. It is an institution created by the milk producers themselves to primarily safeguard their interest economically, socially as well as democratically. Business houses create profit in order to distribute it to the shareholders. In the case of GCMMF the surplus is ploughed back to farmers through the District Unions as well as the village societies. This circulation of capital with value addition within the structure not only benefits the final beneficiary – the farmer – but eventually contributes to the development of the village community. This is the most significant contribution the Amul Model cooperative has made in building the Nation.

India is that the world’s biggest producer and consumer of dairy. In 2018 alone, India produced 186 million metric tonnes of milk — about 410 billion pounds and 22 percent of the milk produced globally. Almost all of that is consumed domestically thanks to India’s dairy-heavy diet — think creamy curries, yogurt drinks, and a popular type of butter called ghee. A quick note before we proceed: this includes milk from buffaloes, which are an important source of milk in many developing countries. the point is that India loves milk.

In 2011, the French dairy company Danone hoped to capitalize on this by opening a division in India. Danone opened its own processing plant in Haryana and tried to capture some of India’s 1.2 billion dairy lovers. But less than a decade later, Danone shuttered their dairy business in India. That same year, the corporate made 28 billion dollars worldwide and was within the top three global dairy companies. With all this success, elsewhere, why did Danone’s dairy business sour in India? Let’s start with some background on Danone. Their business is broken down into three categories:

1.specialized nutrition, like supplements and formula for babies;
bottled waters and seltzers;
dairy and plant-based alternatives.

That one makes up over half of their global sales, but it’s also the one that failed in India. Danone does still sell specialized nutrition products in the country, but they don’t break out those sales figures separately. This is the same company as Dannon in the U.S. The company decided to rebrand to make the spelling less confusing for American consumers. Anyway, now for some background on India’s dairy industry. There are about 75 million dairy farmers in India. Most of them are women who own one or two buffaloes or cows to supplement the family’s income. Nearly half of India’s milk is not sold, but consumed by the farmers household. This makes India’s dairy industry much more fractured and localized than other countries where Danone operates. Take the company’s native France and one of its biggest customers, the U.S. Each has far fewer dairy farms with herds that dwarf India’s one or two animal average. This was Danone’s first big problem in India: sourcing milk is difficult. Of the half not consumed by farmers’ households, only about 15 percent goes to big organized companies or government run cooperatives. The rest goes to hundreds of small, local milk processors.

The largest companies like Amul, Mother Dairy, and Nestlé have tiny percentages of the market, and they’ve been there for decades. Market research firms Mintel and Euromonitor declined to release specific market share numbers to CNBC. However, a 2016 piece in The Economic Times of India citing Euromonitor put the figures at about 7 percent for Amul, 3.7 percent for Mother Dairy, and 2.9 percent for Nestlé. In short, tapping into the existing dairy infrastructure is effective but time consuming. Imagine the effort of contacting dozens or hundreds of local and regional dairies, processors, or individual farmers. But establishing a separate supply chain altogether is very expensive — a lesson Danone learned the hard way. And when Danone did get milk, the company focused on the wrong products. Danone pushed plain yogurt and flavored yogurt drinks — popular in places like the U.S. and France with high profit margins to boot. But in India around the time when Danone arrived, yogurt comprised only 7 percent of the dairy consumed.

The real money was in ghee, a type of clarified butter, and plain old fluid milk, a product with razor-thin margins dominated by those hundreds of local small-scale producers. Analysts explained to CNBC the simple reason why Indian consumers shunned Danone’s prepackaged yogurt. And if Indian consumers did want to buy premade yogurt, they had a slew of cheaper options than Danone. Dairy never accounted for more than 10 percent of Danone’s sales in India, a far cry from its global 50 percent. Its specialized nutrition arm picks up the slack, and the company announced a renewed focus on that division when it shuttered its dairy operation. Meanwhile, two of their biggest competitors, Amul and Nestlé, made nearly five billion and 750 million from dairy, respectively. But not all hope is lost for Danone’s dairy in India.

In January 2018, the same time that Danone ended its dairy production there, the investment arm of the company announced its part in a 26.5 million dollar investment in Epigamia, an Indian yogurt startup. This could be a sustainable move for Danone in India’s dairy industry because Epigamia offers consumers products that add value onto the plain yogurt they will make cheaply reception . But perhaps most importantly is this: while much of the population still makes yogurt the old-fashioned way, analysts predict that a growing number of consumers will want to buy premade options as they move into corporate jobs in developing urban centers. Very large numbers indeed. If only 5 percent of India’s 1.35 billion people decides to buy prepackaged yogurt, that’s over 67 million consumers — more than the entire population of Danone’s native France.

Tag: #amul

AMUL – Anand Milk Union Limited

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