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Y Y Y Y Y Y Y Y Y Prepared by:

Y Y Y Y Y Y Y Y Y Maitreyee B. Shukla

Y Y Y Y Y Y Y Y Y MBA Tech ± IT

Y Y Y Y Y Y Y Y Y 122

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Amul is a dairy cooperative formed in India in the year 1946. It is a brand name managed by
an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd.
(GCMMF), which today is jointly owned by some 2.8 million milk producers in Gujarat,
India.

The word ³Amul´ means ³priceless´ in Sanskrit. The brand name ³Amul´, from the Sanskrit
³Amoolya´ (meaning ³precious´) was suggested by a quality control expert in Anand,
Gujarat.

Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an
annual turnover of US 1504 million as stated in the year 2008-09, which when further
converted into INR gives around 67113 million. Y

Amul has spurred the White Revolution of India, which has made India the largest producer
of milk in the world. Also, it is the world¶s largest vegetarian cheese brand.

Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an
annual turnover of US $1050 million (2006±07). Currently Unions making up GCMMF have
2.8 million producer members with milk collection average of 10.16 million litres per day.
Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA,
Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its
bid to enter Japanese market in 1994 did not succeed, but now it has fresh plans entering the
Japanese markets. Other potential markets being considered include Sri Lanka.

The establishment of Amul is also known as White Revolution. The White Revolution
ushered an era of plenty from a measly amount of milk production and distribution. Aside
from the great measurable success that this project was, it also demonstrated the power of
"collective might". A small set of poor farmers of Kheda district in Gujarat had the vision and
foresight to act in a way that was good for the society and not for the self alone.

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The birth of Amul at Anand provided the impetus to the cooperative dairy movement in the
country. The Kaira District Cooperative Milk Producers¶ Union Limited was registered on
December 14, 1946 as a response to exploitation of marginal milk producers by traders or
agents of existing dairies in the small town named Anand (in Kaira District of Gujarat). Milk
Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in
Anand. Often milk went sour as producers had to physically carry the milk in individual
containers, especially in the summer season. These agents arbitrarily decided the prices
depending on the production and the season. In winter, the producer was either left with
surplus / unsold milk or had to sell it at very low prices. Moreover, the government at that
time had given monopoly rights to Polson Dairy (around that time Polson was the most well
known butter brand in the country) to collect milk from Anand and supply it to Bombay city
in turn. India ranked nowhere amongst milk producing countries in the world in 1946.

Angered by the unfair and manipulative trade practices, the farmers of Kaira District
approached Sardar Vallabhbhai Patel (who later became the first Deputy Prime Minister and
Home Minister of free India) under the leadership of the local farmer leader Tribhuvandas
Patel. Sardar Patel advised the farmers to form a Cooperative and supply milk directly to the
Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices to
the producers). He sent Morarji Desai (who later became Prime Minister of India) to organize
the farmers. In 1946, the farmers of the area went on a milk strike refusing to be further
oppressed. Thus the Kaira District Cooperative was established to collect and process milk in
the District of Kaira in 1946. Milk collection was also decentralized, as most producers were
marginal farmers who were in a position to deliver 1-2 litres of milk per day. Village level
cooperatives were established to organize the marginal milk producers in each of these
villages.

Indigenous R&D and technology development at the Cooperative had led to the successful
production of skimmed milk powder from buffalo milk ± the first time on a commercial scale
anywhere in the world. The foundations of a modern dairy industry in India were thus laid
since India had one of the largest buffalo populations in the world.

The success of the dairy co-operative movement spread rapidly in Gujarat. Within a short
span five other district unions ± Mehsana, Banaskantha, Baroda, Sabarkantha and Surat were
organized. In order to combine forces and expand the market while saving on advertising and
avoid a situation where milk cooperatives would compete against each other, it was decided
to set up an apex marketing body of dairy cooperative unions in Gujarat.

Thus, in 1973, the Gujarat Co-operative Milk Marketing Federation (GCMMF) was
established. The Kaira District Co-operative Milk Producers¶ Union Ltd., which had
established the brand name ³Amul´ in 1955, decided to hand over the brand name to
GCMMF (AMUL). With the creation of GCMMF (AMUL), they managed to eliminate
competition between Gujarat¶s cooperatives while competing with the private sector as a
combined stronger force. GCMMF (AMUL) has ensured remunerative returns to the farmers
while providing consumers with products under the brand name ³Amul´.

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Amul topped as the winner of the ³Best of All´  Y  Y
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the year 1999.The award which is considered to be equivalent to the Malcolm Balridge
National Quality Award of USA and the European Quality Award is the most prestigious
award which recognizes achievements of an organization in terms of excellence in business
results, business processes, customer satisfaction as well as societal and environmental
impact.

In January 2007, for the first time in India and the world GCMMF introduced the Amul range
of Pro-biotic and sugar free ice-creams aimed at the health- conscious and diabetic. Probiotics
are live beneficial culture which, when administered in adequate amounts, confer a beneficial
health effect on the host. They help in digestion, especially of milk sugar (lactose).

After emerging as India¶s topmost brand, Amul has gone to win one of the world¶s most
prestigious awards ± 
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Amul pro-biotic ice-cream launch. GCMMF is the first and the only Indian organisation to
receive the 2007 IDF Marketing Award which covered 3 categories:

VY Nutri-marketing
VY Innovation
VY Marketing Communication

Amul Pro-biotic Ice-cream received the award in the Nutri-marketing category.

Amul has also been ranked among ³

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according to the findings published by the J


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(IFCN) at the 10th IFCN Dairy Conference 2009, held at Stockholm during June 14-17.

The IFCN is a network of dairy researchers responsible for analysing global dairy trends and
creating knowledge to guide various stakeholders in the dairy sector covering about 80
countries, over 60 dairy-related companies, a number of dairy-related institutions and dairy
farmers.

In its recent report, IFCN has provided ranking of dairy processors by its milk intake,
representing milk volumes collected plus commodity purchased in home country and
subsidiaries in other countries. Accordingly, Fonterra of New Zealand, Dairy Farmers of
America and Nestle of Switzerland secured the first three places with market share of 2.7 per
cent, 2.3 per cent and 1.7 per cent globally.

Amul, with "#$Y
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, stood 21st in the list, thus entering the top league for
the first time. This IFCN analysis was based on IFCN Daily Report 2008 with data
representing the year 2007.

However, with substantial growth having taken place during the last two years at Amul, its
ranking would improve to almost at the 16th place in the current year. Thanks to the White
Revolution pioneered by Amul, India with its milk production touching 114.4 million tonne
during the year under review is the largest milk producer in the world, way ahead of the US
and Germany with 79.3 million tonne and 39.4 million tonne respectively.

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& Amul¶s CSA lies in its procurement
part. The ability to collect 7 million litres of milk from 2.6 million farmers everyday,
converting it into goods worth 6 crore and distributing it to more then 5, 00,000
retailers across the entire country is not an easy job. However, Amul has so far been
extremely organized and thus successful in managing its large scale supply chain,
which begins with the milk producer and ends with the goods being supplied to the
customers all over the country via retailers. No other dairy in India has such a
sustainable procurement network.

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Butter 85% 1
Milk powder 40% 1
Cheese 50% 1
Ice-cream 24.75% (HUL ± 28.22%) 2
Sweets 50% 1
Chocolate drink 90% 1
Chocolate 10% (Cadbury ± 70%) 3

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introduced products for target audience ranging from youth, to diabetic people, and
from the health conscious to the urban class. Thus, it enjoys enormous support from a
large target audience.

Some of the numerous products introduced by Amul are listed below:

1)Y Chocolate milk under the brand name of ³Amul Kool Koko´ targeting the youth of
today.
2)Y India¶s first pro-biotic ³Wellness Ice cream´ and ³Sugar free Delights´ for diabetic
people.
3)Y ³Low Fat, Low Cholesterol Bread Spreads´ for the health conscious.
4)Y ³Emmental´, ³Gouda´ and ³Pizza Mozzarella Cheese´ for the likes of the urban class.
5)Y Product for the µprice sensitive India¶ ± ³Low priced Amul Ice Creams´ and the very
affordable ³Sagar´ whitener.
6)Y It also entered the pizza business, where the base and the recipes were made available
to restaurant owners who could price it as low as 30 per pizza when the other
players were charging more than 100.

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 The quality of all the products of Amul is on par
with international standards. However, the price is comparatively less and affordable
as all the products are manufactured within the country. Also, as their distribution
network is very strong, the availability of all the products is very good. At the same
time, due to affordable fares, the demand for Amul products is very high from the
consumers.

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 Amul has had a very strong marketing strategy at its disposal. It
has very good communication with its customers, be it through advertisements,
hoardings, television or even radio. Unlike maintaining standard products on the
shelves, it continuously comes out with new products and new schemes, as well as
advertisements as a tool to connect with the audiences. As a result of this, it has been
possible for them to keep their customers loyal, as well as attract new customers.

I personally feel that one of the best methods used by Amul to promote their No.1 product,
Amul Butter, was the 1966 launch of the round-eyed, chubby-cheeked Amul moppet who put
Amul on India¶s breakfast table - ³The Utterly Butterly´ girl. Since its launch, every time an
event of local, national or global importance occurred, it has been very beautifully been
depicted by in the ³Utterly Butterly Delicious´ ad-campaigns on billboards and hoardings.
The Amul ads are one of the longest running ads based on a theme, now vying for the
Guinness records for the longest running ad campaign ever.

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As shown above, the GCMMF supply chain system has a huge amount of human labour
under its wings. It forms a chain of people ± farmers, VCS, MUs, Distributors, Retailers and
finally the consumer (i.e. we, the people consuming their products). Even if there is a small
glitch in the working of one of these departments as a result of some political disturbance or
even a natural calamity, it hits the manufacturing unit hard, and that can result into delay in
supply.

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  As it is known, Amul mainly manufactures dairy

products i.e. most of its products are made from milk. Whole milk keeps for about a
week after the store expiration date. However, many of the dairy products including
skim milk, ice cream and frozen yogurt have a very short shelf life of not more then 3-
4 days. Consumption of dairy products that have crossed their expiry dates is
extremely unhealthy and harmful for health. Also, you need to store all dairy
products, including milk and cheese, in the refrigerator. However, after refrigerating
dairy products, if there is a power failure, then these products need to be consumed
within 4-6 hours, because the chances of them getting spoiled increase considerably
after 6-7 hours.
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 Amul has an extremely strong dependency on weak
infrastructure and is completely dependent on villages for its raw materials. Up to the
mark infrastructure for the manufacture of the various dairy products is not available
at many of its manufacturing units. Further, the transportation link in the supply chain
may get delayed due to many political as well natural reasons, which can cause
damage to the products due to their limited shelf life.Y


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ÔY  Y   GCMMF has signed an agreement with Wal-Mart to stock its shelves
with products under its Amul brand name. Amul Processed Cheese, Pure Ghee,
Shrikhand, Nutramul, Amul¶s Mithaee Gulab Jamuns are some of the products being
marketed in the American markets. Its overseas markets include Mauritius, UAE,
USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African
countries. Its bid to enter Japanese market in 1994 did not succeed, but now it has
fresh plans entering the Japanese markets. One of the other potential market being
considered at this stage is neighbouring Sri Lanka.

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 As a first step towards eCommerce in India,

Amul has offered the cyber shopping experience with a wide range of Amul dairy
products in all the major cities of our country. Thus, the ³Taste of India´ has now
become just a few clicks away from our doorstep.

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Y

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: More then 50% of Americans are medically
obese. If Amul is really looking forward to capture the hearts of the Indians settled in
the USA, offering low-fat versions of its brands would make a lot of commercial
sense. Hence, targeting the large Indian community in the USA markets with its niche
products like Mithaee, packaged ready-to-eat foods etc., it can definitely expand its
market to a large extent, and at the same time make its presence felt at the global
level.

In order to improve further, Amul can take advantage of the following ideas and
opportunities:

ÔY Amul can venture out on new products like Toned Milk and Condensed Milk that can
be used for preparing baby food products and sweets.

ÔY Though Amul¶s hoardings have been a huge hit in the cities, it can penetrate even
better in the rural areas by advertising through the media like cable channels and
newspapers. Sponsoring shows on TV and sports events can be of great help.

ÔY There are certain Amul products like Amul Basundi, Gulab Jamun, Chocolates etc.,
which have not been as successful and popular as compared to Amul Ice Cream.
Amul can try to understand the cause of this through market research and work on
improving these products and thus gaining the audience¶s trust and loyalty.


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Given below are some of the major competitors for Amul:

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Cheese Britannia
Butter Britannia, Nestle
Ice creams HUL
Curd Nestle, Mother Dairy
Paneer Britannia
Flavoured milk Britannia, Nestle
Baby food Nestle, Heinz

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  In the past few years, there are various dairy companies, MNCs as
well as local, which have given a stiff competition to Amul. HUL (for Ice Creams)
and Cadbury (for Chocolates) have been very strong contenders for the top spot
against Amul. Also, Amul has seen excellent competition from Vijaya (for Cheese,
Butter and Ghee). The new entrant in the dairy market has been Govardhan (for
Cheese, Butter, Ghee and most importantly Pasteurized Milk).

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 At today¶s date, India has the highest population of cattle

around the world. However, the yield of Indian cattle is still much lower than other
dairy countries because of unhygienic conditions and non-availability of proper food
for the cattle. This may prove to be a hindrance for Amul in the global market.

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YThe rates of milk have kept on

increasing over the years. There was a time in the 90s when it was available at around
18 per litre in retail. However, over the last 10 years, due to change in government
policies, the price of all the commodities including milk has increased to a
considerable extent, now costing around 34 per litre. As a result of this, the
production cost of dairy products for Amul has increased too. These further results
into increased rates of dairy products.

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modifications in the Import Policies made by the Government of India. It has now
become possible to import milk products from various countries around the world. So,
the demand for Amul products had seen a dip as when compared to earlier times.

ÔY ÷ Y@
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 Now-a-days, there has been a growth in production of

Soy Products like, Soya Paneer, Soya Milk, and even ice creams made from soya
(Baskin Robbins)! Also, as people have become health conscious, they tend to
consume margarine as a substitute.
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Looking at the current trend, I feel that Amul will definitely have a consistent growth in the
national as well as international market.

The product quality is very good«. the taste has been accepted by the masses«

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http://www.amul.com

http://en.wikipedia.org

http://www.google.co.in

http://www.thehindubusinessline.com

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