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Amul (Anand Milk Union Limited)




W o r l d ' s L a r g

e s t

P o u c h e d M i l

k

B r a n d

W

o r l d ' s B i g g e s t

V e g e t a r i a n C h e

e s e

B r a n d

Largest Food Brand And Business In India




OPPORTUNITIES: Subscription Revenues toDrive Industry Growth; Mobile TV Added

Channel

Annual Turnover

4300

10000

2000

0

2000

4000

6000

8000

10000

1946 1999 2007 2008 2009 2010

Time Frame

I N R C r o r e s

CA G

R :

3 2 %

Annual Turnover Of Rs 4300 Crore (2006-07)

Rs 10,000-crore mark over the next three years.

Four decades to become Rs 2,000-crore entity But, the turnover doubled to over Rs 4,300 crore within nine years from 1999 to 2007



• Formed in 1946, is a dairy cooperative movement in India.

• A brand name managed by Gujarat Co-operative Milk Marketing Federation

Ltd. (GCMMF)

• Jointly owned by 2.6 million milk producers in Gujarat

• Spurred the White Revolution of India, which has made India the largestproducer of milk and milk products in the world.

• Overseas markets - Mauritius, UAE, USA, Bangladesh, Australia, China,Singapore, Hong Kong and a few South African countries

• Fresh plans of flooding the markets of Japan & Sri Lanka.

• Dr Verghese Kurien, former chairman of the GCMMF -the man behind thesuccess of Amul.

• On 10 Aug 2006 Parthi Bhatol was elected chairman of GCMMF

• The white revolution has finally created a billion-dollar brand.

http://en.wikipedia.org/wiki/1946

http://en.wikipedia.org/wiki/Cooperative

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Brand

http://en.wikipedia.org/wiki/Gujarat

http://en.wikipedia.org/wiki/White_Revolution_%28India%29

http://en.wikipedia.org/wiki/Mauritius

http://en.wikipedia.org/wiki/UAE

http://en.wikipedia.org/wiki/USA

http://en.wikipedia.org/wiki/Bangladesh

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/China

http://en.wikipedia.org/wiki/Singapore

http://en.wikipedia.org/wiki/Hong_Kong

http://en.wikipedia.org/wiki/Africa

http://en.wikipedia.org/wiki/Dr_Verghese_Kurien

http://en.wikipedia.org/wiki/Parthi_Bhatol

http://en.wikipedia.org/wiki/Parthi_Bhatol

http://en.wikipedia.org/wiki/Dr_Verghese_Kurien

http://en.wikipedia.org/wiki/Africa

http://en.wikipedia.org/wiki/Hong_Kong

http://en.wikipedia.org/wiki/Singapore

http://en.wikipedia.org/wiki/China

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/Bangladesh

http://en.wikipedia.org/wiki/USA

http://en.wikipedia.org/wiki/UAE

http://en.wikipedia.org/wiki/Mauritius

http://en.wikipedia.org/wiki/White_Revolution_%28India%29

http://en.wikipedia.org/wiki/Gujarat

http://en.wikipedia.org/wiki/Brand

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Cooperative

http://en.wikipedia.org/wiki/1946



• Every day Amul collects 7million litres of milk from 2.6million farmers (many

illiterate), converts the milkinto branded, packagedproducts, and deliversgoods to over 500,000 retailoutlets across the country.

• Its supply chain one of themost complicated in the

world.

Business Model

Pasteurisat

ion




Third party service providers - core is milk processing , production of dairy products

- logistics of milk collection, distribution of dairy products, sale of products through dealers and retail

stores

Umbrella brand - c

ommon brand for most product categories- Amul's sub-brands , edible oil products - Dhara, mineral water - Jal Dhara brand while fruit drinks - Safal

Developing demand - limited purchasing power, modest consumptionlevels- a low-cost price strategy products

The distribution network - dry and cold warehouses- cash transactions throughout the supply chain- JIT improves dealers' return on investment (ROI



• Largest milk brand in Asia marketing more than30 different brands of dairy products like cheese,ice-cream, condensed milk, ready-to-eat pizza,beverages etc.

• Amul is the market leader in ghee and butter • Amul Kool and Kool Café doing well

• Defending against names like Mahananda, Vijay,Milma and other co-operative milk brands

• Aggressive moves against FMCG and F&Bbrands like Britannia, Nestle and Mother Dairyamong others..

AMUL defending its turf



• Moving consumers from loose milk to packagedmilk and gradually move them up the value

chain (tetra pack to beverages, all availableunder the Amul brand)• A sound strategy likely to work.• Being exposed to a brand, it is natural for a

customer to try more products• Improving socio-economic condition of the

customer anchors the desire to enhance lifestyle

Defense Strategy



• Wide range of product categories caters toconsumers across all market segments. For example, Amul Kool is targeted at children, whileteenagers prefer Kool Café, as it has a coolimagery associated with it.

• Segmentation is not as easy in curd and low fatproducts, due to mixed audiences, various

culinary applications , eg. ghee, butter andcheese.

“In India, the most used spread is ghee, thenbutter, cheese, low fat butter, margarine, cheese

spread and mozzarella cheese.

Segmentation



• Changing retail environment• Striking out on its own, with Amul Outlets or

parlours to deliver consumers total brandexperience

• Launched in 2002, there are now 400 Amulparlours across the country, which contributed3% to the brand’s total turnover last year.

High profile locations: Amul parlours are todaypresent on campuses of Infosys, Wipro, IIM-A,IIT-B, Temples, Metro rail and railway stations inGujarat.

Targetting



•

A mass market player, no premium offerings• USP – Quality with affordability• Up against niche players – value addition to customers• Sheer size and scale of operation• New offerings for health conscious and vibrant India –

Health and energy drinksStamina, a health drink made from milk with added

vitamin C against Red Bull and Gatorade, milk better thancola. Aimed at youngsters, priced at Rs 12

Ice-creamProbiotic and sugar-free variants

Chocolatessugar-free brand called Choco-Mini to target the diabetic

Positioning



•

Given this wide product portfolio, Amul’sapproach is to promote its brands in a rotationalcycle of two to three years.

• After ice-creams were launched in 1996, thecategory was re-visited in 1999, in order toimprove availability of the product and make itaffordable.

The focus shifted to cheese in 2001, Amul MastiChaas in 2004-05 (sales of Masti dahi grew by25%), Nutramul and Kool Kafe in 2006 and thisyear the focus is on Amul Koko — coldchocolate drink

Promotion



•

Uses a variety of media to communicate• Most famous is billboard campaign

• The endearing polka dressed girl and pun at

various issues increased brand’s fan following.• Below-the-line activity has grown too — such as

the Amul food festival, which has been held for the last four year between October and

December in about 50,000 retail outlets.• The Chef Of India promo invites hotel chefs to

come up with recipes using as many Amulproducts as possible, and is conducted at city,state and national level.

Promotion



•

One of the most conservative FMCG entities —GCMMF — spends a mere 1% of its turnover onpromotions.

• GCMMF has written and re-written rules of thegame.

• Amul butter girl is one of the longest run adcampaigns in the country for 41 years.

•

Intelligent marketing of milk, icecream and butter milk.

Intell igent Marketing




Amul

Product portfolio



• Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) isdrawing up a fresh game plan for its flagship brand 'Amul FreshMilk, its main rival is mother dairy India

• On Amul’s future plans, Amul is expanding their processing andpackaging capacity to meet growing demands eg delhi & Mumbai.

• In a bid to pump up volumes, Amul is also extending its distributionnetwork to reach new markets. "Our core strategy is to further consolidate our operations in existing markets which includesKolkatta along with beefing up advertizing &marketing actions.

• Incidentally, Amul is selling its packaged milk brands on the Net too.

• Mother dairy is working on similar grounds and increasing its reachand both the giants are trying to capture large packaged milkmarket.

Amul milk

A l B tt



Amul Butter cash cow in the product portfolio

Primary position as far as butter is concernedwith a market share of more than 86 per cent

• Amul has introduced a number of diverse range of varied productslike cooking butter, low fat butter etc along its main product. Hencecovering all the segments in which a competitor can enter, thuscreating strong barriers and in turn playing offence to defend its

market position.



Amul cheese

Variants

Amul Pasteurized Processed Cheddar Cheese

Amul Processed Cheese Spread

Amul Pizza (Mozarella) Cheese

• Amul as a brand investing a lot of resources in cheese because ithas to defend its position from the various attacks of its closecompetitor britannia and hence attacks itself by introducing new

variants in the cheese segment.

Amul cheese

http://www.amul.com/cheese-cheddar.html


http://www.amul.com/cheese-spreads.html


http://www.amul.com/cheese-mozzarella.html












• The brand with the hope to double its cheese sales through itsrecent foray into the marketing of vegetable pizzas introduced amulpizzas.

• Marketing analysts say that Amul's pizza marketing strategy isunique because it aims at boosting sales of an `elite' product(cheese) by pushing down prices of another `elite' product (pizza).The maximum retail price for Amul's Mozzarella cheese is now Rs48 per 250 gm, while its processed cheese slices sell at Rs 43 per 200 gm. ``The pizza route would promote sales of an otherwise

premium product as cheese,'' they pointed out.

• Amul aimed to do to pizza what it has already done for ice-cream.They wanted pizzas to become a mass consumption item likekulcha chola or chole bhature. And done in the case of ice-cream,

they intended to force other pizza manufacturers to also slashprices. Eventually, this would further expand the market for cheese.

Amul pizzas



Amul ice creams-24.75 per cent share in the Rs 525 crore Indian

market, Mother Dairy share of 8.66% & themarket leader HUL- kwality walls with 28.22%

• Amul being the 2nd to the market leader is playing offence at itsbest.

• Delhi and the National Capital Region, which was hitherto deemed

to be Mother Dairy domain in the icecream sector, has already seen Amul move in with vengence- market penetration strategy

• Amul's Pro-biotic Ice-cream-flanking strategy targeted at healthconcious individuals

In a country like India where we have waterborne diseases likediarrhoea, eating a spoonful or two of pro-biotic ice-cream would keepthe family healthy and strong. The product was launched with this inview. Amul was the first in the country to introduce pro-biotic ice-creamand pro-biotic sugar free ice-cream. Hence it also has first mover

advantage.



Amul chocolates- market share of roughly 10per cent compared with 70 per cent share of

the market leader, Cadbury.

• The company has maintained a chocolate portfolio for more than 20years, the dairy products major never posed a threat to marketleaders such as Cadbury and Nestle.

• Amul is reworking its strategy in the chocolate category to push itschocolate product sales. Now, with a new product portfolio, it isplanning to create a space for itself. In the chocolate business,

Amul's strategy is to identify the market gaps and try and fill them.They have done this in the past with their Sugar free and Choco

Zoo, both of which have been appreciated by the consumers. Now. Amul intends to concentrate on the niche segment when it comes tothe chocolate range & occupy a position in the shape basedchocolate segment & introduce new variants in the same.-Flankingstrategy

http://www.amul.com/

http://www.amul.com/



Sagar Amul ghee-20 per cent share in the

ghee market• Amul has decided to restrict the brand in Gujarat and

Maharashtra.Its a dominant player here and uses defence strategyto safeguard its position.Ghee is already dominated by local co-operative brands and it will continue with Sagar ghee as a regionalbrand. With the baseline `Flavour of Festivals', Sagar Ghee ispromoted before every festival in both these States to build demandfor the brand.

• Amul is trying to promote Sagar on the value for money platform. Infact, in the past, the brand used cartoons from R.K. Laxman to drivehome the image of a brand for the common man. Today, however,the brand is being advertised based on images from festivals



Sagar Amulspray-baby milk powder

• Nestle is the market leader in the segment. This is a category wherebrand loyalties are very strong as mothers want the best for their babies. Heinz is the only other significant competitor to Nestle in thissegment. Nestle's Cerelac and Nestum together have around 80%market share and Heinz's Farex has close to 18% share.

• In infant formula also Nestle's Lactogen formula and Lactogenstandard formula are the leading brands with around 75% marketshare. Other brands are Heinz's Lactodex Farex, Wockhardt'sRaptakos, and Amul's Amulspray which occupy the rest of the

market.

• The market for milk powder is already saturated and there is noneed to expand the range is what has been decided by Amul. Thisozone is not its core competency.



• Gujarat Cooperative Milk Marketing Federation had signed anagreement 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 few of the productsmarketed in the US markets.

• 50 per cent of Americans being medically obese, and if Amul isreally looking to capture the hearts of the second- and third-generation Indians, offering low-fat versions of its brands, wouldmake a lot of commercial sense.

• Hence targeting the large Indian community in the US markets withits niche products like mithai, packaged ready to eat foods market itcan definitely expand its market to a large extent.

Expansion to foreign shores

AMUL Competitors



Butter• Britannia• Nestle

Cheese

•

BritanniaBaby Food• Nestle

• Heinz

Dairy Whitener Segment• Nestle• Britannia

Ice creams

• HLL

AMUL Competitors

U C



Chocolates & Confectionaries• Cadbury

• Nestle

Pizza

• Pizza Hut• Dominos

• Nirulas Frozen pizza

Curd

• Nestle

• Mother Dairy

Ultra High Treated Milk •

Nestle•

AMUL Competitors



B i i



• BNZFL is a joint venture between Britannia Industries Ltd.and the Fonterra Cooperative Group, New Zealand, a dairycooperative group.

•

The company focuses entirely on the dairy business, withcheese being its flagship product. The other products it sellsare dairy whiteners, butter, ghee (Indian clarified butter) anda malt drink- Anlene. All products are marketed under the'Britannia MilkMan' brand.

• Its turnover in 2005-2006 is US$ 24 million with about 50%coming from processed cheese, 30% from the dairywhitener and the remaining 20% from butter and ghee sales.

Britannia

Britannia Cheese



• BNZF only sells in the processed cheese segment and

has five variations of processed cheese in the market,besides a cheese dip product. Over half of the company'srevenues come form the processed cheese segment.

• BNZF cheese is priced at a premium in the market, one

reason being that the cheese is sourced from cow's milk(unlike Amul, that sources its cheese from buffalo milk).• Cheese products: Cheese cubes, Cheese singles

(regular and Slim variants), Britannia Milkman MalaiChaska- a soft, fresh and creamy ‘dairy spread,’ which

has a mild, tangy taste, Britannia cheese spread indifferent flavors like Masala Herbs, Spicy Cilantro, PeppyPepper etc., and Pizza cheese.

Britannia Cheese

Other Products



• Britannia Flavored Milk in tetrapaks arepopular. Other products in the milk rangeinclude products like Sweet Lassi

(buttermilk) and Cold Coffee in 200 mltetrapaks. The Lasssi is priced at Rs. 10while the Cold Coffee is priced at Rs. 12.

•

The firm has also entered the freshpastuerised milk market, dominated byGovernment-owned milk marketers

• The firm has started supplying dresh

paneer (cottage cheese) in and around

Other Products

Strategy



Strategy

In 2001• Besides focusing on competitive pricing,

BNZF has adopted a three-pronged

strategy of freshness (lower pipelinestock), availability (improve distributionnetwork) and visibility (more shelf space at

modern trade).• It recently entered some fresh milkmarkets, such as Delhi and Kolkata,where GCMMF does not have a presence.

It is concentrating on just 30 cities, and

Strategy



• Nestlé India is a subsidiary of Nestle S.A.,world's biggest food company and aleading Swiss giant.

•

Nestle India's business can be broadlyclassified into four categories ---milkproducts and nutrition (infant mixes,

yoghurt, milk), prepared dishes andcooking aids, beverages (coffee andmalted drinks) and chocolate andconfectionary.

• Company has a wide presence across

Nestle



Nestle Dairy whitener • The loose milk market is estimated to be around Rs470

billion, the processed milk market is only Rs 10000 crores.Milk powder market is only 7% of the whole milk market.

• There are two types of milk powders

a. Whole milk powder b. Skimmed milk powder.

Everyday is a major player in the Dairy whitener categorythat is a part of the skimmed milk category. The dairy

whiteners are used for tea making.



Nestle Everyday•

Everyday was launched in 1986 now have a marketshare of around 22%. The category is facing themajor obstacle of consumer perception towards thiscategory. The consumers perceive that loose milk isfresh. And with abundant milk supply, milk powderswere able to penetrate only 4.7% of the entire market.

• While Everyday faces stiff competition from Amul's Amulya and Britannia's Milkman, the major competition is from the ordinary milk.

• Adding more nutrients , variants and identifyingmultiple uses are the only option in this nascentmarket.

• Expand the market or increase the usage situations



• It wants to give GCMMF competition across the entiredairy line. Will be busy protecting the dominance of itsCerelac and Milkmaid brands, against the impendingprice-led onslaught from GCMMF's Amul Infant Milk

Substitute and Mithai Mate, which will now be producedfrom a spanking new 8,000 tonne a year facility atMehsana.

• Nestle India has access to its Switzerland-based parent,Nestle SA's investments (global expenditure was Rs 6,500

crore in 2007) in research and development and advancedtechnology for foods and beverages

• Likewise, Nestle Fresh ‘N' Natural Slim Dahi (fat free),Nestle Milkmaid Fruit Yoghurt (fat free with real fruits),

Nestle Nesvita (fat free with probiotics, for healthydi estion Nestlé Cerelac Sta e 4 and Nestlé Nan with

Strategy

C db



• Cadbury Schweppes is the No.1 confectionery and third

largest soft drinks company in the world. We manufacture,market and distribute branded chocolates, confectioneryand beverages that bring smiles to millions of consumersacross 180 countries

•

Cadbury India began its operations as a trading concern in1947. The company today employs nearly 2000 peopleacross India.

• Currently Cadbury India operates in three sectors viz.Chocolate Confectionery, Milk Food Drinks and in theCandy category.

• In the Chocolate Confectionery business, Cadbury hasmaintained its undisputed leadership over the years andhas market share of over 70% - the highest Cadbury brand

share in the world!

Cadbury



• In the Milk Food drinks segment our main product isBournvita - the leading Malted Food Drink (MFD) in thecountry.

• Similarly in the medicated candy category Halls is the

undisputed leader.• We recently entered the gums category with the launch of

our worldwide dominant bubble gum brand Bubbaloo.

Bubbaloo is sold in 25 countries worldwide.

Cadbury



Strategy

• Since 1965 Cadbury has pioneered the developmentof cocoa cultivation which gives it a strong unbendingfoundation in chocolates segment in India.

• Being the market leader it follows the Defense

strategy.• It re-launched three brands: 5 Star, Gems, and

Bournvita recently. It is looking at its strategy afreshto gain a toehold in the sugar confectionery market,

and to reduce its traditional dependence onchocolates.

Strategy

HUL



• Unilever, the major shareholder in HLL, is the world's

largest ice-cream company selling in more than 80countries (could be more, by now), mainly under the brandname Walls.

• The Rs 1,200-crore branded ice creams sector is

dominated by HLL with 37% market share followed by Amul with 27% market share.• With a growth in sales of nearly 40 per cent in 2006 and

with HLL making profits in the category for the second year in succession, the company is bullish.

• The market potential is huge, with ice cream consumptionin the country very niche, at around 500 ml per capita,compared with 2-4 litre in Singapore and an eye-popping25 litre in the US.

HUL

Strategy



Strategy•

The strategy of promoting Kwality Walls as anumbrella brand for its ice creams, rather than aproduct-driven promotion, has helped to build thebrand well.

• The FMCG major's ice-cream business eliminatedseveral stock-keeping units, rationalisedmanufacturing infrastructure and brought its focusdown to six mainline cities only, where 60 per cent of the ice-cream market exists.

• It is also planning to extend Unilever’s retailbrand ‘Kwality Walls Swirls’ parlors in accordancewith the growing number of shopping malls inIndia.

• Sailesh Venkatesan, cate or head Ice Creams,

Strategy




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