04/10/2023
This is the story of 1945 when most of the dairy farmers of Gujrat are affected by some problems. They have to sell their milk at lower price to the middle man or contractor of Polson. In 1945 there was only one dairy brand(Polson) with whole monopoly in the market. Polson was a British based company manufacturing its products from a Gujrat based factory.
The condition of these milk farmers was bad and miserable. Farmers share their problem with social activist named Tribhuvan Das Patel than they decided to discuss these problem with prominent leader of that time sardar Vallabhbhai Patel in Gujarat.
Patel give an advise to build a cooperative society and made a strike against these middle man. Farmers make a decision to build an cooperative society(UNION) with the help of Morarji Desai in the Kiara District.
In 1949 on the request of government Dr. Varghese Kurian came to Gujrat to improve dairy industry in India. The person drastically improve the every aspect of this co operative society and turn it into a well established organization.
In 1955 when they are producing enough milk, they decided to launch other milk products like butter and milk powder and but there is a problem with the name Anand(Kiara) milk union limited then they compel in to a short form and make a new brand AMUL.
In 1966 Sylvester da Cunha, came up with the idea of using a character in Amul's advertisements. The Amul Girl's expert to respond quickly to current events. Whether it's a political development, a cultural moment, a sports event, or a movie release, Amul releases new ads with the Amul Girl to stay relevant and engaging.
Amul work at three levels first at village level, it is the initial stage of procurement, second is district level where it is sterilized to increase its self life to make other products after that it is send to the state level to distribute across country.
They focus on providing value to both dairy farmers and the end consumer by providing the quality in the product and right price to the farmers. They have installed electronic fat testing machine for procurement process so that they can easily detect the quality of milk according to the fat stored in it.
Amul invested 80 crore in a setup designed by IBM in 2009 to mange every small detail of operations in supply chain management. This technological advancement helps in accessing the plant capacity, track exact location of trucks.
When R.S. Sodhi become head in June 2010 they focus on scaling rapidly these are the few thing they focus on deliberately like expansion in procurement so that they can collect as much as milk, expansion in processing to increase self life by sterilization and expansion in distribution to increase reach in the areas where it is not available or available in small quantity.
During COVID period other dairy brands is affected so badly but Amul instead of that increase their revenue and sales. As you know that milk comes under essential goods category. In the lockdown period during pandemic different businesses those who depends on dairy products like restaurant, hotels, catering are closed.
They are responsible for 20% sales of these dairy brands as the demand cut down they decrease their production, lot of factory workers and drivers loss their job but the Amul on the other hand doing something different than their competitor and thinking way ahead to understanding the changing demand of the market.
As you know that in crisis consumer behavior will drastically change, the demand of dairy based products which is used mostly at home will increase because most of people have stayed at home and choose home made food because of increasing health awareness.
During this time demand of cheese increased 80%, in which there are 40% cottage cheese and condensed milk increase by 100%, you will be shocked by knowing that all factory of Amul was running at their full capacity during lockdown.
During pandemic Amul launch 35 new products in the market, acquiring extra 35 lakh liter milk every day and paid 800 crore in return to milk farmers of India. In the place of trucks they are using trains during COVID because of lockdown to manage their supply chain.
They take an umbrella approach in their marketing strategy because it helps in cutting the cost of branding and increase sales and revenue by rub of effect. In the COVID period Amul make a revolutionary step and increase their advertising volume up to 316% in comparison of last year.
In 1965 National dairy development board was build by Dr Verghese Kurian to improve the dairy industry in India. In 1970 operation flood was organized by this board, which was the world's largest dairy development program, it transformed India from a milk-deficient nation into the world's largest milk producer.
There are some fact and figures you must know about Amul, dairy farmers are the owner of this brand because 80% of their revenue directly goes to farmers and remaining 20% they spend on milk procurement, milk processing, packaging and distribution network.
Today turn over of the company is more than 72,000 crore, more than 36 lack farmers are directly working from 18,500 villages across India. Amul collects 4.1 crore liter milk per day from the farmers.
Tribhuvan das Patel was awarded the 1963 Ramon Magsaysay Award for 'Community Leadership', together with Dara Nusserwanji Khurody, and Verghese Kurien and the Padma Bhushan from the Govt. of India in 1964.
These are some key business lessons you can learn from this case study try to understand the changing paradigm of consumer behavior during crisis for some brand it is like challenge but for some it is like opportunity to growth.
Second build a robust supply chain management if your product also comes under food category It is really challenging from procurement to process and then to supply end consumer.
Third use robust technology at different stages in your company to increase efficiency, quality of product and reduce cost. And at last you can use umbrella approach in your branding strategy to increase sales and revenue.
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