Amul is an Indian dairy cooperative society based out of Anand that lies in Gujarat. The word 'Amul' is derived from the Sanskrit word ‘Amulya’ which means priceless or precious.
This case study on Amul discusses the history of Amul, its business model, revenue, and the key factors behind Amul's success.
Founded in 1946, Amul is managed by the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), a cooperative body that comprises 3.6 million milk producers of Gujarat today.
Amul started India's White Revolution that made India the world's biggest maker of milk and milk products. Amul was founded by Tribhuvandas Patel under the direction of Sardar Vallabhbhai Patel, the first deputy prime minister of India.
The Kaira District Milk Union Limited was then conceived in 1946. Tribhuvandas headed the organization until his death in the 70s. He spoke to Dr. Verghese Kurien in 1949 and persuaded Dr. Kurien to assist in the mission of White Revolution. Dr. Verghese Kurien is widely considered as the Founder of Amul.
Amul - History and White Revolution
Here's a brief analysis of Amul's history and how Amul contributed to the White Revolution. Amul cooperative was registered on 19 December 1946 as a reaction to the exploitation of local milk producers by the dealers and the agents of the main dairy of that time, the Polson dairy. The price of milk was randomly determined. The government had given monopolistic rights to Polson to collect milk from Kaira dairy farmers and supply it to the city of Mumbai.
Agitated by this treatment, the farmers of Kaira approached Sardar Vallabhbhai Patel under the administration of their leader Tribhuvandas K. Patel. Sardar Patel advised them to frame an organization, i.e., Kaira District Co-usable Milk Producers' Union (KDCMPUL), and supply milk directly to the Bombay Milk Scheme rather than relying on Polson. He sent Morarji Desai to sort out the issues faced by the farmers.
Milk collection was decentralized as most of the makers were minor farmers who could provide 1–2 liters of milk each day. Cooperatives were framed for every town.
By June 1948, KDCMPUL had begun pasteurizing milk for the 'Bombay Milk Scheme'. Under the leadership of Tribhuvandas Patel, Amul celebrated its 25th Anniversary in 1973 with Morarji Desai, Maniben Patel, and Verghese Kurien.
The cooperative was additionally created and headed by Dr. Verghese Kurien with H.M. Dalaya. Dalaya's innovation of making skimmed milk powder from buffalo milk for the first time in the world and then making it on a commercial scale with Kurien's help led to the first modern dairy of the cooperative at Anand (Gujarat). It competed against many established market players.
Within a short period, the success at the cooperative's dairy spread to Anand's neighborhood in Gujarat. Thus, five unions in other districts like Mehsana, Banaskantha, Baroda, Sabarkantha, and Surat were set up by following the approach sometimes referred to as the 'Anand pattern'.
In 1970, the White Revolution of India began. In 1973, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), an apex marketing body of these district cooperatives, was set up to combine forces and expand the market while saving on advertising and avoiding internal competition. The Kaira Union, which had the brand name Amul with it since 1955, transferred the name to GCMMF.
Since then, GCMMF has become the largest food products marketing organization in India. It is the leading organization of the dairy cooperatives in Gujarat. GCMMF is responsible for the exclusive marketing of products falling under 'Amul' and 'Sagar' brands.
Over the last five and a half decades, dairy cooperatives in Gujarat have created an economic network that links more than 3.1 million village-manufactured milk products with millions of consumers in India.
On September 30, 2018, Prime Minister Narendra Modi inaugurated Amul's chocolate plant in Mogar, Anand near its headquarters.
Amul - Business Model
Amul pursues a unique plan of action in which 'esteem for cash' items are given to its purchasers while securing the premiums (as a proprieter) of the milk-producing farmers who are its providers. As milk is a transient item, the rancher could endure a misfortune on the off-chance that it isn't sold before the part of the bargain.
Amul's business model is described below:
Structure of the Organization
The cooperative model used by Amul came to be known as the "Anand design" cooperative framework. It is a three-level structure that involves town social orders, region level dairy associations, and a state-level organization. Every level is financially free of the others and involves agents selected from the level below it.
Situated in the town of Anand, the Kaira District Milk Cooperative Union (Amul) has grown exponentially. It held hands with other milk cooperatives in Gujarat and now covers 2.12 million farmers, supporting 10,411 towns' milk. It focuses on fourteen area-level plants (associations) under the general supervision of GCMMF.
Since the beginning, there was an assumption that this activity would directly profit and change poor farmers and add to the improvement of society. Markets, at that point and even today, are crude and poor in the foundation. Amul and GCMMF recognized that improvement and development couldn't be left to market powers and that proactive intercession was required.
Two key necessities were distinguished. The first that continued development for the long haul would rely upon coordinating free market activity. It would require an overwhelming interest in the synchronous advancement of providers and customers. Second, the powerful administration of the system and business feasibility would require proficient administrators and technocrats.
The Umbrella Brand
The system pursues an umbrella marking technique. Amul is the basic brand for most item classifications created by different associations: fluid milk, milk powders, margarine, ghee, cheddar, cocoa items, desserts, frozen yogurt, and consolidated milk. Amul's sub-brands incorporate variations, for example, Amulspray, Amulspree, Amulya, and Nutramul.
The palatable oil items are assembled around Dhara and Lokdhara, mineral water is sold under the Jal Dhara brand while natural product beverages bear the Safal name. By demanding an umbrella brand, GCMMF skillfully maintained a strategic distance from association clashes and created an open door for the patrons to coordinate in creating items.
Development of Products
Amul's item improvement was driven both by the soul of the cooperative framework and productivity. Being a farmers' cooperative, Amul was focused on purchasing all the milk offered by the former. The transitory idea of milk made it important for Amul to process the surplus milk and enter new item classifications as the generation expanded.
Margarine and Butter
Propelled in 1955, margarine was one of the main milk items offered by Amul. It was additionally the first run-through Amul effectively tested on the authority of a built-up brand. Amul uprooted Polson to rise as the undisputed pioneer in margarine advertisement.
Cheese and Cheddar
GCMMF propelled cheddar in 1959 followed by cheddar powder in the mid-1970s. The notoriety of cheddar expanded during the 1980s.
Milk and UHT Milk
Amul was the market chief in the Gujarat entire milk showcase with a 90% piece of the pie in 2002; aside from providing milk to parts of Maharashtra and Rajasthan.
Key Factors behind Amul's Success
The Amul Girl (The Amul Advertising Campaign)
In 1966, Amul hired Sylvester da Cunha, the managing director of an advertising agency, to design an ad campaign for Amul Butter. DaCunha designed the campaign as a series of hoardings with topical ads that related to day-to-day issues. It was popular and earned a Guinness World Record for the longest-running ad campaign in the world.
In the 1980s, cartoon artist Kumar Morey and scriptwriter Bharat Dabholkar were roped in for sketching Amul's ads. But Dabholka rejected the trend of using celebrities in advertisement campaigns. Dabholkar credited chairman Verghese Kurien for creating a free atmosphere that encouraged the development of the ads.
The Amul girl is the advertising mascot used by the company to promote the brand. The brand has been cleverly using the cartoon figure in its longest-running ad campaign. The Amul girl is used to insert an element of humor into its print ads.
Indians have liked Amul's advertisements and the brand has seen higher customer engagement. The brand recall value for Amul increased. The Amul girl advertising campaign is often described as one of the best Indian advertising concepts.
Amul has constantly been innovating, be it launching new products, creative marketing campaigns, or challenging traditional societal trends to come up with better ones. As mentioned, Amul in the 1960s became the first brand in the world to make skimmed milk powder from buffalo milk.
Also with its three-tiered cooperative structure, Amul transitioned from traditional operations to a more cost-efficient and effective structure. For its continuous innovation, Amul won the “CNN-IBN Innovating for Better Tomorrow Award” and “World Dairy Innovation Award” in the year 2014.
Efficient Supply Chain
Amul follows a three-tier cooperative structure. It consists of a dairy cooperative society at the village level that is affiliated with milk unions at the district level which in turn get federated to a milk federation at the state level. Milk is collected at the village dairy society, obtained and processed at the district milk union, and marketed at the state milk federation.
The greatness of this model lies in the fact that Amul was the first company to follow this model. It was reciprocated all over the country under 'Operation Flood' in the 1970s. The model ensures that there is efficiency and swiftness in operations. With this, the Amul model has helped India become the largest milk producer in the world.
Amul follows the 'branded house architecture' way wherein whatever it promotes is done under a common brand name – Amul. The prime focus is on promoting the parent brand rather than individual products; this helps Amul gain more brand visibility and spend lesser on marketing and advertising costs.
Given the enormous number of associations and substances in the inventory network and decentralized duty regarding different exercises, successful coordination is basic for effectiveness and cost control. GCMMF has understood this procedure well and accomplishes the level of control.
Amul - Revenue and Growth
The Gujarat Cooperative Milk Marketing Federation Ltd., responsible for marketing Amul milk and dairy items, revealed a 13% expansion in its turnover to Rs 33,150 crores in the year finished March 31. The Amul gathering's turnover surpassed Rs 45,000 crores which is 13% higher than a year ago, i.e., in 2019.
The Amul Federation has accomplished a compound yearly development pace of over 17.5% for as long as nine years because of higher milk obtainment, extension in business sectors, and the dispatch of new items.
Frequently Asked Questions about Amul
What is White Revolution and who started it?
The white revolution was the initiative responsible for the growth of milk production in India and encouraged the production and use of Indian dairy products. Amul started India's White Revolution that made India the world's biggest maker of milk and milk products. Dr. Verghese Kurien is known as the 'father of the White Revolution' in India.
What was the effect of the White Revolution?
White Revolution made India the biggest manufacturer of milk and milk items. It additionally diminished the acts of fraud and malpractices by milk dealers and traders.
What does Amul stand for?
It stands for Anand Milk Union Limited. Amul is an Indian dairy cooperative society based in Anand (Gujarat). The word 'Amul' is derived from the Sanskrit word ‘Amulya’ which means priceless or precious.
Founded in 1946, Amul is a cooperative brand managed by the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which aggregates 3.6 million milk producers in Gujarat today.
How was Amul started?
Amul cooperative was registered on 19 December 1946 as a reaction to the exploitation of local milk producers by the dealers and the agents of of Polson dairy.
What is the name is of Amul's parent company?
It is a cooperative brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF).
When was Amul founded?
14 December 1946.
How old is Amul?
73 years (14 December 1946).
Who owns Amul? Or, Who is considered Amul's owner?
Gujarat Co-operative Milk Marketing Federation Ltd. is the owner of Amul.
Who is the founder of Amul brand?
Dr. Verghese Kurien and Tribhuvandas Kishibhai Patel are widely considered as the Founders of Amul. Tribhuvandas headed the organization until his death in the 1970s. He got in touch with Dr. Verghese Kurien in 1949 and persuaded Dr. Kurien to help with the mission.
What does Amul mean?
It stands for Anand Milk Union Limited. The word 'Amul' is derived from the Sanskrit word ‘Amulya’ which means priceless or precious.
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