India is the largest producer of milk in the world. The dairy industry is one of the fastest growing sectors in India, valued at over $26 billion. Amul is the largest player in the organized sector, with market shares of over 80% for products like butter and cheese. It was formed in 1946 as a cooperative and now has over 2.5 million producer members. Mother Dairy is the largest regional player, sourcing milk from dairy cooperatives and marketing products under its brand. The dairy industry faces high competitive rivalry due to numerous competitors and undifferentiated products.

1. Pasteurized
packed milk
Subtitle

2. Current scenario
 India is the largest producer of milk in the world (87 million tons)
 Near self sufficiency in milk and milk products
 Marginal and small households will continue to be the major producer of milk
in future
 Current growth rates of 4-5% in milk production per annum

3. Current scenario
 Sustained rise in per capita income and urbanization are fuelling rapid growth
in demand for milk.
 The per capita availability of milk is 226 grams per day.
 The world average of 285 grams per day
 The minimum nutritional requirement is 280 grams per day as per Indian
Council of Medical Research.

4. Indian Dairy Industry
 One of the fastest growing sectors in India, with a total size of about INR1160
billion (INR 1,16,000 crore) OR US$ 26.5 billion.
 In Dairying, 75 million women are engaged as against 15 million men.

5. Indian Dairy Scenario

6. Position Of Milk Production
By
 Farm Level
-45%
 Unorganised -
42%
 Organised
-13%
0
5
10
15
20
25
30
35
40
45
Farm Level Unorganised Organised
Sector

7. Position Of Milk Utilization
 Consumed
as Milk
- 46%
 Traditional
- 47%
 Western
- 7%
0
5
10
15
20
25
30
35
40
45
50
Consumed Traditional
Products
Western
Products

8. Major Player in organized sector

9. Sabse Bada Khiladi
AMUL
 Origin from the Sanskrit word ‘Amoolya’.
 Amul is a brand under which GCMMF markets its products.
 Birth of GCMMF is closely linked to India’s freedom struggle.

10. The Birth of Amul
 First Co-operative formed on 4th Jan 1946.
 Kaira District Co-operative Milk Producers Union Ltd.
formed 14th Dec 1946.
 Gujarat Co-operative Milk Marketing Federation
(GCMMF) was formed in 1973.
 Dr. Verghese Kurien was the architect of Amul’s
success.

11. Dr.Kurian’s Mantra for Amul
 Quality
 Economy
 Availability
 Service

12. Aaj Ka Amul
 GCMMF is India’s largest food products marketing organisation.
 12 district co-operative milk producers’ union.
 2.5 million producer members.
 2.28 billion litres milk collected in 2005-2006.
 Sales turnover stands at Rs.37736 million in 2005-06 (Rs.13790
million in 1995-96)

13. Amul Products
 Amul Butter
 Milk powder
 Toned Milk
 Dahi
85% 1
60% 1
65% 1
60% 1
Market Market
Share Position

14. Amul Products
 Flavoured Milk
 Ice Creams
 Cheese
 Ghee
55% 2
75% 1
90% 1
8% 2
Market Market
Share Position

15. Mother Dairy
 No.1 Regional Player in India.
 It was set up in 1974 under the Operation
Flood Program.
 It is now a subsidiary company of a wholly
owned company of the National Dairy
Development Board (NDDB).

16. Products
 Mother Dairy markets & sells dairy products under the Mother Dairy brand
(like Liquid Milk, Dahi, Ice Creams, Dairy Whitener and Butter)
 Mother Dairy sources its entire requirement of liquid milk from dairy
cooperatives

17. PORTERS FIVE FORCE ANALYSIS

18. THREAT OF NEW ENTRY
 It has the capacity to retaliate when new firm enter into
the industry
 Capital requirement in the initial phase is high because
plant and machinery is expensive hence it acts as an
entry barrier to new firm

19. BARGAINING POWER OF SUPPLIERS
 There is ample supply of cows and bulls for rearing and
cross breeding purposes
 They are available at very low prices also.
 Consumer switching cost is low

20. BARGAINING POWER OF BUYERS
 Concentration of buyers are more
 Buyer has full information about products of various
companies
 Buyer's purchases are a sizable percentage of the
selling industry's total sales – So the power of buyers
are high.

21. THREAT OF SUBSTITUTE
 Demand of fresh milk in domestic and overseas market
is increasing.
 Milk has been universally accepted as it possess the
essential vitamins and minerals required for good
health
 There are substitutes in soya based formulas or
goats’ milk, but the demand for them are low and does
not pose a major threat to cows’ milk.
 Buyer have less propensity to substitute products –
So the threat of substitute is low.

22. COMPETITIVE RIVALRY
Competitors are numerous Products are
undifferentiated
 Consumer switching costs are low
 Exit barriers are high
 Competitors are strategically diverse – So competitive
rivalry is high.