Posted - 12 Apr 2024
"Amul, also known as'Taste of India', goes international for the first time in USA"
"Amul’s revenue as of FY23 is 550 BILLION INDIAN RUPEES”
About AMUL
Amul (Anand Milk Union Limited), established in 1946 in India, is a renowned cooperative dairy brand recognized for its wide range of dairy products. It is distinguished by its commitment to empowering farmers and its iconic advertising campaigns.
Amul is an Indian milk cooperative society headquartered in Gujarat. It is owned by the Gujarat Cooperative Milk Marketing Federation Limited, a department under the Government of Gujarat. Presently, it is overseen by 3.6 million milk producers.
"Amul products are exported to more than 50 countries around the world."
A Brief History of AMUL
The primary motivation behind the establishment of Amul was not driven by profit, but rather by a desire to combat the exploitation faced by dairy farmers at the hands of Polson, a dairy products brand founded by Pestonjee Eduljee in Mumbai in 1915.
In response to the arbitrary pricing set by Polson, which made it difficult for dairy farmers in Kaira to sustain themselves, the farmers, led by Mr. Tribhuvandas Kishibhai Patel, sought help from Sardar Vallabhbhai Patel, who advised the farmers to form a cooperative and enlisted Morarji Desai to assist in organizing them.
Following a meeting in Chaklasi, farmers established a cooperative and restructured the milk pooling system, benefiting small-scale milk producers significantly. This cooperative, led by Mr. Tribhuvandas Kishibhai Patel, was later named AMUL.
The success of AMUL in Anand prompted the establishment of similar cooperatives in neighbouring districts, giving rise to what became known as the Anand Pattern.
The White Revolution, also known as Operation Flood, was a government-led initiative in collaboration with AMUL aimed at boosting milk production in India. This initiative made India the top producer of milk and milk products globally.
The establishment of the Gujarat Co-operative Milk Marketing Federation Ltd in 1973 facilitated the marketing of these district cooperatives.
Dr. Verghese Kurien spearheaded Operation Flood, transforming India from a milk-deficient nation to a global leader in milk production.
By eliminating intermediaries and connecting consumers directly with dairy farmers, the White Revolution incentivized farmers to increase milk production.
With the success of AMUL and the White Revolution, Dr. Verghese Kurien earned the title of "the milkman of India," transforming Gujarat into the milk capital of the country.
AMUL's Business Model
Amul operates on a Cooperative model, empowering farmers by providing them with a fair share of profits and ensuring their active participation in the dairy industry.
This has fostered a strong sense of ownership and commitment among farmers, leading to sustainable growth and development.
"Amul has under it 18,000 milk cooperative committees, a network of 36,000 farmers, processing more than 3.5 crore litres of milk per day."
3-tiered structure
The Amul Model of dairy development comprises a 3-tiered structure, consisting of dairy cooperative societies at the village level, which are federated under a milk union at the district level. These unions further form a federation of member unions at the state level.
As of now, Over 16 million milk producers contribute their milk to 185,903 dairy cooperative societies nationwide. This milk is processed in 222 District Co-operative Milk Unions and marketed by 28 State Marketing Federations, contributing to a better livelihood for these producers.
"Amul spends only 1% of its total expenses on Advertising, whereas the industry standard is 8-15%."
PROMOTION - The Umbrella Branding Strategy
Amul showcases branding brilliance in every bite!
While other brands focus on marketing their individual products, Amul markets its brand itself.
"Ever noticed the magic of Amul ads?" 🤔
Remember, the epic Amul ads on TV, whether its Butter, Milk, Cheese or Ice-Cream, we only hear "Amul, The Taste of India".
They relate each of their product to Amul. It's always been 'Amul'.
And check out their packaging!
Amul is written in Bold letters on every product, while the product name humbly accompany it.
This makes spotlight shines on the iconic brand name, symbolizing the brand's unwavering presence and trusted quality.
Amul Products
And Remember The Mascot - Amul girl.
Amul Girl was created in the 1966 as a mascot for Amul to represent the brand in its advertising campaigns.
The idea behind the creation of the Amul Girl
Humanize the brand and make it more relatable to consumers.
It was introduced as a rival to then famous "Polson's Butter Girl"
Her quirky and clever one-liners in the advertisements not only captured attention but also helped in building brand awareness and recall for Amul.
The character was designed to be witty, humorous, and relatable, often featuring in topical advertisements commenting on current events, social issues, and popular culture.
The Amul Girl
Over the years, the Amul Girl has remained a constant presence in Amul's advertising campaigns, evolving with the times while retaining her charm and relevance.
Now, you name any event - be it politics, cinema, cricket, social issues, Amul is staying relevant for all till now.
And Amul has been doing it for past 53 years!!
Amul Tribute to Doctors- Covid 19
Amul commercial - Tiger Zinda hai
Amul commercial on Mohammad Shami's Wicket Hat-tricks
Amul commercial - IPL 2024
PRODUCT Diversification
Amul has continuously expanded its product portfolio beyond dairy to include a wide range of products such as milk, butter, cheese, ice cream, yogurt, and more.
This diversification strategy has enabled Amul to cater to diverse consumer needs and preferences, capturing a larger share of the market.
With this, Today, Amul boasts a diverse product portfolio with over 2000 offerings under its brand umbrella.
What began as a humble milk cooperative has evolved into the largest player in the milk and dairy product sector, showcasing remarkable growth and expansion.
Affordable & Competitive PRICING
Despite offering high-quality products, Amul maintains competitive pricing to make its products affordable and accessible to a wide range of consumers, including those from lower-income segments.
Amul has adopted a low-cost strategy for essential dairy products such as milk, ghee, butter, and more. It offers these products at competitive prices lower than their competitors.
This affordability strategy has contributed to Amul's widespread popularity and market penetration across India.
PLACE - Integrated Supply Chain & Distribution network
Amul has developed an integrated supply chain that spans from milk collection to processing and distribution.
Farmers supply milk to cooperatives, which is then collected in large quantities and transported to processing plants. At these facilities, the milk is utilized to manufacture the final products.
This vertically integrated approach allows Amul to maintain control over quality and consistency throughout the production process, ensuring that consumers receive fresh and high-quality dairy products.
Amul has built an extensive distribution network that reaches both urban and rural areas across India.
This network includes a network of milk cooperatives, retail outlets, and distribution channels, ensuring that Amul products are readily available to consumers nationwide.
AMUL Embracing Legacy : Staying True to Its Origins
Amul, with a rich history dating back to the 1940s, has garnered decades of experience in the industry.
The company's commitment to its iconic campaigns, such as the enduring Amul Girl for 58 years and "Amul Doodh Peeta Hai India" for 18 years, showcases its adherence to proven strategies.
Similarly, its consistent use of the tagline "The Taste of India" for 27 years, along with the catchy jingle "Utterly, Butterly...delicious...Amul" for 58 years, not only maintains cost-effectiveness but also ensures lasting memorability across generations.
Tagline Since 27 years
Since 18 years
Jingle since 58 years
The Pandemic Effect - AMUL, a beacon of Resilience
On 24-03-2020, Prime Minister Modi announced a nationwide lockdown, resulting in widespread job losses and a significant economic downturn amounting to Rs. 10 lakh crores.
The impact was so heavy on dairy industry as well, that it costed the milk producers of India more than 112.3 crores of rupees every day. 🤯
In 2020, while many companies struggled to maintain their supply chains, AMUL stood out by introducing 33 new products to the market and increasing its daily milk procurement by an additional 35 lakh liters.
Moreover, AMUL demonstrated its commitment to supporting rural milk producers by disbursing an extra Rs. 800 crores in payments to them.
"Remarkably, During COVID, AMUL not only mitigated its losses but also increased its revenue by nearly 700 crores."
The Risk Taker
As 20% of the revenue of the dairy industry came from hotels, catering businesses, and restaurants for the organized dairy sector. As a consequence, of lockdown, AMUL also witnessed a drop of almost 12% in its demand. 📉
Despite this, while other dairy companies were bracing for further losses, pulling down their milk procurement, decreasing logistics, AMUL took a different approach and on the contrary started preparing for a surge in demand.
Instead of scaling back operations, under leadership of MD, Mr. R. S. Sodhi, AMUL anticipated a potential increase in demand and adjusted its milk procurement, logistics, and production accordingly.
Change in Consumer Behaviour
AMUL smartly noticed something important that others missed --- people started changing how they buy milk products.
Although restaurants and hotels were not ordering much, demand for milk products surged at homes. Demand for milk products like cheese increased by almost 80%, demand for cottage cheese increased by 40%, and demand for condensed milk almost doubled
Due to the pandemic, people became more health-conscious and shifted from buying loose milk to packaged milk. Thus, AMUL launched 33 new products and also maintained, full capacity run of its plants.
And the demand was so high, although AMUL plants were operating at full capacity (115%), they had to utilize vacant plants from other companies to meet it.
Strategic Partnerships
AMUL had invested 80 Crore rupees in IBM in 2009 transforming the information technology landscape of the company.
And this came as a resource to AMUL during covid. IBM provided invaluable assistance to AMUL by digitizing the entire operation of its plant. This smart management system enabled AMUL to monitor both idle and fully operational locations effectively, allowing them to redistribute workload from idle areas to active ones as needed.
Supply Chain
When supply was hit as buses were restricted to move from and to places, AMUL decided to carry out transportation via railways.
AMUL used third-party e-commerce platforms such as Flipkart, Big Basket, and Dunzo, while also initiating partnerships with Swiggy and Zomato to distribute butter, milkshakes, and paneer.
As per Mr. R. S. Sodhi, they received over 60,000 orders through Zomato and generated sales of AMUL products worth almost 3 crores across more than 200 cities.
As a result, Amul not only managed to reduce its losses but also witnessed a surge in revenue by 700 crores. 📈
Rural milk producers predominantly relied on Amul for support. While many other companies resorted to employee layoffs, Amul provided incentives, food, and healthcare amenities to its frontline workers!
AMUL - The winner of Hearts
Using these groundbreaking strategies, Amul has established itself as a trusted and iconic brand in the Indian dairy industry, with a strong market presence and a loyal customer base.
Amul has created a strong presence in hearts of every Indian!!
BUSINESS LESSONS FROM AMUL
Power of collaboration and empowerment - By operating on a cooperative model, where farmers collectively own and manage the brand, Amul has demonstrated how collaboration can lead to sustainable growth and success.
Customising as per Customer needs - Amul teaches us significance of prioritizing consumer satisfaction for long-term business success.
Branding Brilliance in Every Bite - Amul depicts how a relatable branding can help win hearts of the people and build a loyal customer base.
Embrace the risk - Good leaders get ready to deal with problems, but great leaders are excited to face them. When things get tough, you can either see it as a roadblock or as a chance to beat your competition. Like, how Amul did during COVID.
Resourcefulness - Being resourceful is a quality that proves invaluable during times of crisis. Like, Amul's futurisitic investment in IBM helped it during crisis.
Adaptability - As supply chain was hit due to COVID, AMUL was quick in switching to other options, which kept them ahead in competition.
