DAIRY INDUSTRY IN INDIA• Dairy Cooperatives account for the major share of processed liquid milk (around 20%)• 170 Milk Producers’ Cooperative Unions spread across 22-state cooperative dairy federation.• Leading brands- Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan), Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur).• Products : Pouched Milk, Butter, Cheese, Ice- cream, Flavoured Milk, Ghee, Lassi.
Amul1973 2011 2012-17 Roadmap for Situation Analysis 2012-17
Amul’s Profile The Amul Model of dairy development is a three- tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. Establishment of a direct linkage between milk producers and consumers by eliminating middlemen Milk Producers (farmers) control procurement, processing and marketing Professional management The Amul model has helped India to emerge as the largest milk producer in the world. More than 13 million milk producers pour their milk in 1, 28,799 dairy cooperative societies across the country. Their milk is processed in 176 District Co-operative Unions and marketed by 22 State Marketing Federations, ensuring a better life for millions. Source: Amul’s website
The Market ModelEconomic Socio- Aspect Cultural Aspect Source: Amul’s website
BCG Matrix Analysis Market Share High Low Stars Question Marks High Ice Cream, UHT Milk, Chocolates Cheese, Flavored Milk,Market Milk Powders,Growth Cash Cows Dogs Low Pouch Milk, Ghee, Butter
4I’s of Amul Improvement in Rural Economy Impact Indigenous Immovation (Imitation, Innovation) Idea
Competition Category Business Environment Competition Growth Pouched Milk Huge Investment Required ; Mother Dairy 6% Unorganized sector Flavored Milk Very high growth Mother Dairy, Nandini 25% Milk powder High Price ; Export Opportunities Nestle, Britannia 10% Baby Food Huge Margin, Single Major Player Nestle (95% share) 10% Ghee Home-made preferred Unorganized market 9% Butter Consumers increasing favoring low- Britannia 7% fat varieties Cheese Opportunities in rural market Britannia, Dabur 15% Ice Cream Competitive Kwality Walls, Vadilal, Mother Dairy 12% Paneer Market penetration possible Amul is the only national player 8% having >50% share of organized market. Flavored Yogurt New category and gaining quick Nestle, Danone, Cocoberry 22% acceptance, considered as a premium product Lassi Good preference for unorganized Few organized players, Mother Dairy 13% sector etc. Major competition is restaurants.
Trends in CompetitionMother Dairy Co-operative roots; strong in NCRParag Dairy Fast Growth rate. More than 10%Nestle Old player; have future plans in dairy segmentHUL Big player with financial musclesBritannia Strong in cheese market
Trends• According to Assocham, milk production in India is likely to reach 190 million tons by 2015 with an annual turnover of INR 5 lakh crore.• PE firms could take an interest in private dairies; supply of capital for expansion• Brand wars – A+ with Nestle and more.• Increase in capacity required (current = 9+ million liters per day)
Perceptual Map: Guiding Factor Societal Impact Continue/Enter Discontinue / Do Not Enter Economic Impact
Ansoff Matrix Analysis Product Existing New Market Penetration Product Development Existing Fat Free Dessert Fresh Milk Cooking Chocolate Ghee, Milk PowdersMarkets Soups Ice Cream Lassi, Diabetic Products, Healthy products New Market Development Diversification South East Asia and South East Asia and Middle East with products like Middle East with products like Sterilized Paneer, Cow Ghee, Srikhand, Paneer & Butter Confectionery items
Brand Positioning• Shift in Focus - Youth• Amul butter girl – witty topical ads – has been largely successful. Longest running campaign – should be continued• Sponsoring Netherlands in the cricket world cup• F1 race• Amul Cafes• Recently, it re-launched its theme song (leveraging digital media).
Future Roadmap•Promote sub-branding within the AMUL brand to target high-endcustomers• Shift in focus on youth to be continued• Go for ‘product development’ using premium products•Gain greater control over the distribution channel in major markets tocounter threats from upcoming retail formats•Emphasize Brand Management•Creation of Strategic Business Units based on distribution channels
Future Roadmap• Increase capacity to (triple) to drive down the prices• Focus on inbound logistics and outbound logistics to improve the margins• Increase dealers from 5000 to 10,000. Retailers from 10 lacs to 12.5 lacs (Uniform increase)• Focus on Flavored milk and yogurt market. Target 40+% market share.• Increase organized market from 15% to 40% (5% every year)• Increase the number of parlors from 6000 to 12,000. Number of cafes to 400; Number of stalls at railway stations from 177 to 350• Product development – Diabetic products. Exit Chocolate market• Revenue growth from $2.2 bn. To $ 5 bn. in next five years