AMUL & Diversification

1
Turnover over the years

Source:
Annual Report
FY 17-18

2
 Business Model - Cooperative style of
management

Run by farmers for the benefit of farmers and

end consumers – transparent and fair

Key Lean organizational structure > low cost

Differentiators
of GCMMF Strong brand name for purity and quality

Trust created among the consumers

Scale and scope of Robust distribution &

operations Cold chain network
3
Current business potential
• Milk Production in India in 1998-99 : 86 m ton
• Procurement by organized sector : 40 m ton
• Milk procured by GCMMF : 4.6 m ton (12%)

• Demand for milk (growth) : 8-10% per annum

• Supply (growth) : 6 % per annum
• Supply growth can be improved in long term (1000 kg per
lactation per animal vs 2000 kg in Dairy countries)
• Per capita consumption of milk in India is 225 grams per day
(600 grams in other countries)
4
 Processed food – fruits, vegetables

Premium food Only 1.3% of total fruit

Processed food Fruit and vegetable
consumption & vegetable processed
market in India : Rs 20 availability : spread
as compared to 70 % in
billion likely to increase across many states
US > Good potential

Huge storage facilities,

Food processing Competitors (HLL, Competition – GCMMF
strong logistics /
industry is highly Nestle) – First mover did not have a level
distribution net work
fragmented advantages playing field
to be created
5
Critical Questions for Diversification
success

What can GCMMF do compared to Needs to further investment,

competitors? separate processing set required

Processing plants, existing cold

What strategic assets required?
storage network?

No. Competitors are MNC with

Can we leapfrog competitors? strong resources; No first mover
advantage 6
Critical Questions for Diversification success

Will diversification break up strategic Yes, Milk products and processed

assets? food requires different set of assets

Will be a player or winner in new

Only a player
market?

What GCMMF learn by diversification? Nothing specific to core business

7
 Conclusion

CREATE IMPROVE SUPPLY CONTINUE AND EXIT PROCESSED

AWARENESS SIDE BOTTLENECKS FOCUS IN MILK FOOD BUSINESS
AMONG USERS AND DAIRY
FOR MORE PRODUCTS
CONSUMPTION 8
Thank
you