INDIAN

COMPANY
AMUL
 Amul (AMUL means "priceless" in
Sanskrit. The brand name "Amul,"
from the Sanskrit "Amoolya," was
suggested by a quality control
expert in Anand.)
 Amul was formed in1946.
 It is a dairy cooperative in India.
 It is a brand name managed be 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.
GCMMF Today

 GCMMF is India's largest food products marketing organisation. It
is a state level apex body of milk cooperatives in Gujarat,
which aims to provide remunerative returns to the farmers
and also serve the interest of consumers by providing
affordable quality products. GCMMF markets and manages
the Amul brand.
 From mid-1990s Amul has entered areas not related directly to its
core business.
 Its entry into ice cream was regarded as successful due to the
large market share it was able to capture within a short period
of time - primarily due to the price differential and the brand
name.
 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 rupees per pizza when the other players
were charging upwards of 100 rupees.

Company info

 The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is

the largest food products marketing organisation of India. It is the apex
organization of the Dairy Cooperatives of Gujarat. T
 Over the last five and a half decades, Dairy Cooperatives in Gujarat have
created an economic network that links more than 2.8 million village milk
producers with millions of consumers in India and abroad through a
cooperative system t
 The turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It
markets the products, produced by the district milk unions in 30 dairy
plants, under the renowned AMUL brand name.
 The combined processing capacity of these plants is 11.6 million litres per
day, with four dairy plants having processing capacity in excess of 1
million Litres per day.

 Ever since the movement was launched fifty-five years
ago, Gujarat’s Dairy Cooperatives have brought
about a significant social and economic change to
our rural people. The Dairy Cooperatives have
helped in ending the exploitation of farmers and
demonstrated that when our rural producers benefit,
the community and nation benefits as well.
 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.

 The farmers of Gujarat own the largest state of
the art dairy plant in Asia ,which can handle
2.5 million litres of milk per day and process
100 MTs of milk powder daily.
 All its products are manufactured under the
most hygienic conditions.
 All dairy plants of the unions are ISO 9001-
2000, ISO 22000 and HACCP certified.
 GCMMF (AMUL)’s Total Quality Management
ensures the quality of products right from the
starting point (milk producer) through the
value chain until it reaches the consumer.
THE BIRTH OF AMUL
AND DEVELOPMENT OF
INDIA’S DAIRY
COOPERATIVE
MOVEMENT
 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.
 Milk is a commodity that has to be collected twice a day from each
cow/buffalo. In winter, the producer was either left with surplus /
unsold milk or had to sell it at very low prices.
 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.
 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.
 The success of the dairy co-operative movement spread rapidly in Gujarat. 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 was established.
The Kaira District Co-operative Milk Producers’ Union Ltd. which had
established the brand name AMUL in 1955 decided to hand over the brand
name to GCMMF (AMUL). With the creation of GCMMF (AMUL),
 This was possible due to the leadership of the founder Chairman of AMUL,
Tribhuvandas Patel and the vision of the father of the White Revolution, Dr.
Verghese Kurien who worked as a professional manager at AMUL..
 Dr. Verghese Kurien, the World Food Prize and the Magsaysay Award winner, is the
architect of India’s White Revolution, which helped India emerge as the largest
milk producer in the world.
 Impressed with the development of dairy cooperatives in Kaira District & its success,
Shri Lal Bahadur Shastri, the then Prime Minister of India during his visit to
Anand in 1964, asked Dr. V Kurien to replicate the Anand type dairy
cooperatives all over India. Thus, the National Dairy Developed Board was
formed and Operation Flood Programme was launched for replication of the
Amul Model all over India.

Impact of the "Amul
Model"
 The effects of Operation Flood Programme are more appraised by the World
Bank in its recent evaluation report. Iend of Operation flood Programme.
 Due to this movement, the country’s milk production tripled between the years
1971 to 1996. Similarly, the per capita milk consumption doubled from
111 gms per day in 1973 to 222 gms per day in 2000. Thus, these
cooperatives have not just been instrumental in economic development of
the rural society of India but it also has provided vital ingredient for
improving health & nutritional requirement of the Indian society.
 Very few industries of India have such parallels of development
encompassing such a large population.
 These dairy cooperatives have been responsible in uplifting the social &
economic status of the women folk in particular as women are basically
involved in dairying while the men are busy with their agriculture.
 This has also provided a definite source of income to the women leading to
their economic emancipation.

 Development in India, the
‘Anand Pattern’ has
demonstrated the following
benefits:

 The role of dairying in poverty reduction
 The fact that rural development involves more than
agricultural production
 The value of national ‘ownership’ in development
 The beneficial effects of higher incomes in relieving the
worst aspects of poverty
 The capacity of dairying to create jobs
Contd…

 The capacity of dairying to benefit the poor
at low cost
 The importance of getting government out
of commercial enterprises
 The importance of market failure in
agriculture
 The power & problems of participatory
organisations
 The importance of policy

Achievements of the " Amul
Movement "


1. The phenomenal growth of milk production in India – from 20 million MT to 100

million MT in a span of just 40 years - has been made possible only
because of the dairy cooperative movement. This has propelled India to
emerge as the largest milk producing country in the World today.
2. The dairy cooperative movement has also encouraged Indian dairy farmers to
keep more animals, which has resulted in the 500 million cattle & buffalo
population in the country - the largest in the World.
3. The dairy cooperative movement has garnered a large base of milk producers,
with their membership today boasting of more than 13 million member
families.
4. The dairy cooperative movement has spread across the length and breadth of
the country, covering more than 125,000 villages of 180 Districts in 22
States.
5. The dairy cooperatives have been able to maintain democratic structure at
least at the grass-root level with the management committee of the
village level unit elected from among the members in majority of the
villages.
6. The dairy cooperatives have also been instrumental in bridging the social
divide of caste, creed, race, religion & language at the villages, by
offering open and voluntary membership.
 Contd..
7.
 The dairy cooperatives have been successfully propagating the
concepts of scientific animal husbandry & efficiency of operations, which
has resulted in low cost of production & processing of milk.
8. The movement has been successful because of a well-developed
procurement system & supportive federal structures at District & State
levels.
9. Dairy Cooperatives have always been proactive in building large
processing capacities, which has further propelled growth of milk
production.
10. The dairy cooperatives are among those few institutions in India,
which still cherish a strong Cooperative identity, values and purpose.
They still boast of idealism & good will of members and employees.
11. The dairy cooperatives have removed the poor farmers of India from
the shackles of agents & middlemen and provided an assured market for
their produce. As these are the institutions run by farmers themselves, it
has also resulted in fair returns to the members for their produce
12. Dairy cooperatives have been able to create a market perception of
honesty & transparency with their clean management

Products

 Amul's product range includes milk powders, milk, ,

butter,
 Ghee, cheese, curd, chocolate, ice cream, cream,
shrikhand, paneer, gulab jamuns, flavoured milk,
basundi, Nutramul brand and others. In January
2006, Amul plans to launch India's first sports drink
Stamina, which will be competing with Coca
Cola's Powerade and PepsiCo's Gatorade.
 In August 2007, Amul introduced Kool Koko, a
chocolate milk brand extending its product offering
in the milk products segment. Other Amul brands
are Amul Kool, a low calorie thirst quenching drink;
Masti Butter Milk; Kool Cafe, ready to drink coffee
and India's first sports drink Stamina.
Advertising

 An Amul butter ad on Pakistan's Kargil

War fiasco. The image shows the
"Amul baby" in between George
Fernandes and Atal Behari Vajpayee.

DIVERSIFICATION
DIVERSIFICATION

 In1996, 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.

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 August 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.
"Masti Dahi" was plain yoghurt sold in plastic
cups. Each 400 gm cup was priced at Rs 12.
January 2000,


Amul re-enteredthe carton milk market[4] 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. It was targeted at the upper
middle class housewife who could use it for
different occasions. Amul was targeting sales of
about 0.1 mn litres per day. 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.

July 2001,
 Amul planned to enter the instant coffee market through a tie-up with
Tata Coffee. GCMMF had a strong national distribution network while
Tata Coffee had expertise in manufacturing and marketing coffee. As
a part of the tie-up, Amul was to source the instant coffee from Tata
Coffee and distribute it. The domestic coffee market was estimated at
Rs.11bn, with the instant coffee segment being around Rs.4.5bn.
In August 2001, Amul decided to enter the ready-to-eat stuffed
paratha[5] , cheeseburger, cheese and paneer pakoda[6] , and cheese
sandwich segments. The products were to be marketed under the
SnowCap brand. The SnowCap brand would also include tomato
sauce and ketchup. Amul was also restructuring its chocolates
business[7] . Seven of its brands that were withdrawn from the market
were to be relaunched soon. Amul tied up with Campco, the cocoa
and arecanuts farmers' cooperative in Karnataka and Kerala, for the
supply of cocoa beans[8] . Amul marketed Milklairs, which was
manufactured by Campco. This tie-up was expected to help Amul in
the expansion of its chocolate business.
 WHY
DIVERSIFY?

WHY DIVERSIFY?
 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.


 The management adopted Total Quality Management (TQM) and set for itself higher
benchmarks (in terms of growth).
 They also diversified the Amul portfolio, offering a range of food stuffs such as ketchup,
jam, ice-cream, confectionaries, cheese, and shrikhand.
 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.
 The pizzas were expected to increase the sale of its cheese. The entry into the
confectioneries market was another avenue for increasing milk consumption.
 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.

 According to some analysts, Amul's obsession with keeping down

manpower costs and dealer commissions could be a weakness. In
ice-creams for example, Amul's retail commission in Ahmedabad city
was 17.5% which was 10% lower than what competitors offered.
They also pointed out that Amul might not have the financial muscle
that multinationals had to achieve rapid growth.


 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."


THANK
YOU
THANK YOU


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