Amul (Anand Milk Union Limited)

World's Largest

Pouched Milk

Brand

World's Biggest

Vegetarian Cheese

Brand

Largest Food Brand And Business In India

OPPORTUNITIES: Subscription Revenues to Drive Industry Growth; Mobile TV Added Channel

Annual Turnover

4300

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1946 1999 2007 2008 2009 2010

Time Frame

INR

Cro

res

CAGR: 32%

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 largest producer 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 the success of Amul.

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

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

• Every day Amul collects 7 million litres of milk from 2.6 million farmers (many illiterate), converts the milk into branded, packaged products, and delivers goods to over 500,000 retail outlets across the country.

• Its supply chain one of the most complicated in the world.

Business Model

RawMilk

Condensed

Ghee Butter Cream

Packaged Milk

Ice creamBeverages

Dried

SkimmedMilk

Powder

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 - common 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 consumption levels - 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 than 30 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&B brands like Britannia, Nestle and Mother Dairy among others..

AMUL defending its turf

• Moving consumers from loose milk to packaged milk and gradually move them up the value chain (tetra pack to beverages, all available under 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 to consumers across all market segments. For example, Amul Kool is targeted at children, while teenagers prefer Kool Café, as it has a cool imagery associated with it.

• Segmentation is not as easy in curd and low fat products, due to mixed audiences, various culinary applications , eg. ghee, butter and cheese.

“In India, the most used spread is ghee, then butter, 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 brand experience

• Launched in 2002, there are now 400 Amul parlours across the country, which contributed 3% to the brand’s total turnover last year.

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

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 drinks Stamina, a health drink made from milk with added vitamin C against Red Bull and Gatorade, milk better than cola. Aimed at youngsters, priced at Rs 12

Ice-creamProbiotic and sugar-free variants Chocolates sugar-free brand called Choco-Mini to target the diabetic

Positioning

• Given this wide product portfolio, Amul’s approach is to promote its brands in a rotational cycle of two to three years.

• After ice-creams were launched in 1996, the category was re-visited in 1999, in order to improve availability of the product and make it affordable.

The focus shifted to cheese in 2001, Amul Masti Chaas in 2004-05 (sales of Masti dahi grew by 25%), Nutramul and Kool Kafe in 2006 and this year the focus is on Amul Koko — cold chocolate 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 Amul products 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 on promotions.

• GCMMF has written and re-written rules of the game.

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

• Intelligent marketing of milk, icecream and butter milk.

Intelligent Marketing

Amul

Product portfolio

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

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

• In a bid to pump up volumes, Amul is also extending its distribution network to reach new markets. "Our core strategy is to further consolidate our operations in existing markets which includes Kolkatta 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 reach and both the giants are trying to capture large packaged milk market.

Amul milk

Amul Buttercash cow in the product portfolio

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

• Amul has introduced a number of diverse range of varied products like cooking butter, low fat butter etc along its main product. Hence covering all the segments in which a competitor can enter, thus creating strong barriers and in turn playing offence to defend its market position.

Amul cheese

Variants

Amul Pasteurized Processed Cheddar Cheese Amul Pasteurized Processed Cheddar Cheese

Amul Processed Cheese Spread Amul Processed Cheese Spread

Amul Pizza (Mozarella) Cheese Amul Pizza (Mozarella) Cheese

• Amul as a brand investing a lot of resources in cheese because it has to defend its position from the various attacks of its close competitor britannia and hence attacks itself by introducing new variants in the cheese segment.

Amul cheese

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

• Marketing analysts say that Amul's pizza marketing strategy is unique 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 Rs 48 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 like kulcha chola or chole bhature. And done in the case of ice-cream, they intended to force other pizza manufacturers to also slash prices. 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% & the market leader HUL- kwality walls with 28.22% • Amul being the 2nd to the market leader is playing offence at its best.• 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 health concious individuals

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

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

the market leader, Cadbury.• The company has maintained a chocolate portfolio for more than 20

years, the dairy products major never posed a threat to market leaders such as Cadbury and Nestle.

• Amul is reworking its strategy in the chocolate category to push its chocolate product sales. Now, with a new product portfolio, it is planning 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 to the chocolate range & occupy a position in the shape based chocolate segment & introduce new variants in the same.-Flanking strategy

SagarAmul 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 strategy to safeguard its position.Ghee is already dominated by local co-operative brands and it will continue with Sagar ghee as a regional brand. With the baseline `Flavour of Festivals', Sagar Ghee is promoted before every festival in both these States to build demand for the brand.

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

Sagarskimmed milk powder-40 per cent share

• Amul’s milk powder continues to enjoy a national presence although it enjoys a strong franchise in the North-Eastern, Eastern and parts of the Southern markets.

• The almost 40-year-old brand of Sagar has also been extended to a tea and coffee whitener and has been made available nationally.

• Amul also has the Amulya brand of dairy whiteners, which is at a premium to the Sagar brand by almost 25 per cent. Hence the brand is targeting 2 segments together with it’s brands of milk power, amulya & sagar. Thus creating barriers by segmentation for entry of competitors.

SagarAmulspray-baby milk powder

• Nestle is the market leader in the segment. This is a category where brand loyalties are very strong as mothers want the best for their babies. Heinz is the only other significant competitor to Nestle in this segment. 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 Lactogen standard formula are the leading brands with around 75% market share. Other brands are Heinz's Lactodex Farex, Wockhardt's Raptakos, and Amul's Amulspray which occupy the rest of the market.

• The market for milk powder is already saturated and there is no need to expand the range is what has been decided by Amul. This ozone is not its core competency.

• Gujarat Cooperative Milk Marketing Federation had signed an agreement 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 products marketed in the US markets.

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

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

Expansion to foreign shores

Butter• Britannia• NestleCheese• BritanniaBaby Food• Nestle• HeinzDairy Whitener Segment• Nestle• BritanniaIce creams• HLL

Chocolates & Confectionaries• Cadbury• NestlePizza• Pizza Hut• Dominos• Nirulas Frozen pizzaCurd• Nestle• Mother DairyUltra High Treated Milk• Nestle • Britannia

Sweet Condensed milk• Nestle

Cottage Cheese(Paneer)• Britannia

Milk Additives• Cadbury• Smithkline Beecham

Flavored Milk• Britannia• Nestle

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

• The company focuses entirely on the dairy business, with cheese being its flagship product. The other products it sells are dairy whiteners, butter, ghee (Indian clarified butter) and a 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 dairy whitener and the remaining 20% from butter and ghee sales.

• 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's revenues 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 Malai Chaska- a soft, fresh and creamy ‘dairy spread,’ which has a mild, tangy taste, Britannia cheese spread in different flavors like Masala Herbs, Spicy Cilantro, Peppy Pepper etc., and Pizza cheese.

• Britannia Flavored Milk in tetrapaks are popular. Other products in the milk range include products like Sweet Lassi (buttermilk) and Cold Coffee in 200 ml tetrapaks. The Lasssi is priced at Rs. 10 while the Cold Coffee is priced at Rs. 12.

• The firm has also entered the fresh pastuerised milk market, dominated by Government-owned milk marketers

• The firm has started supplying dresh paneer (cottage cheese) in and around Delhi, the national capital.

• The firm also has in its portfolio Daily Fresh Dahi (curd) and has just launched Low fat Dahi in 2008

Strategy

In 2001• Besides focusing on competitive pricing, BNZF has adopted a

three-pronged strategy of freshness (lower pipeline stock), availability (improve distribution network) and visibility (more shelf space at modern trade).

• It recently entered some fresh milk markets, such as Delhi and Kolkata, where GCMMF does not have a presence. It is concentrating on just 30 cities, and that too through select class A & B outlets, for butter and cheese. It is not playing the national game with GCMMF.

• Being No 2in the butter and cheese market afterAmul which holds more than 86% (combined butter & cheese market) it should be following Offense strategy by attacking the strengths of Amul cheese market.

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

• Nestle India's business can be broadly classified into four categories ---milk products and nutrition (infant mixes, yoghurt, milk), prepared dishes and cooking aids, beverages (coffee and malted drinks) and chocolate and confectionary.

• Company has a wide presence across India with its portfolio of strong brands Nescafe, Maggi, Milkybar,Milo,KitKat,Bar-one,Polo,Munch,Milkmade,Nestea,Nestle Milk, Nestle Fresh 'n' Natural Dahi and NESTLE Jeera Raita

• The company is focused on growing its market share through renovation and innovation of its existing brands in India.

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 powderb. Skimmed milk powder.

Everyday is a major player in the Dairy whitener category that 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 market

share of around 22%. The category is facing the major obstacle of consumer perception towards this category. The consumers perceive that loose milk is fresh. And with abundant milk supply, milk powders were 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 identifying multiple uses are the only option in this nascent market.

• Expand the market or increase the usage situations

• It wants to give GCMMF competition across the entire dairy line. Will be busy protecting the dominance of its Cerelac and Milkmaid brands, against the impending price-led onslaught from GCMMF's Amul Infant Milk Substitute and Mithai Mate, which will now be produced from a spanking new 8,000 tonne a year facility at Mehsana.

• 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 advanced technology 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 healthy digestion), Nestlé Cerelac Stage 4 and Nestlé Nan with DHA (both infant foods) were also launched.

 

• Cadbury Schweppes is the No.1 confectionery and third largest soft drinks company in the world. We manufacture, market and distribute branded chocolates, confectionery and beverages that bring smiles to millions of consumers across 180 countries

• Cadbury India began its operations as a trading concern in 1947. The company today employs nearly 2000 people across India.

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

• In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years and has market share of over 70% - the highest Cadbury brand share in the world!

• Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, Éclairs,Temptations and Celebrations.

• In the Milk Food drinks segment our main product is Bournvita - the leading Malted Food Drink (MFD) in the country.

• 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.

Strategy

• Since 1965 Cadbury has pioneered the development of cocoa cultivation which gives it a strong unbending foundation 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 afresh to gain a toehold in the sugar confectionery market, and to reduce its traditional dependence on chocolates.

• Unilever, the major shareholder in HLL, is the world's largest ice-cream company selling in more than 80 countries (could be more, by now), mainly under the brand name 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 consumption in the country very niche, at around 500 ml per capita, compared with 2-4 litre in Singapore and an eye-popping 25 litre in the US.

Strategy• The strategy of promoting Kwality Walls as an umbrella

brand for its ice creams, rather than a product-driven promotion, has helped to build the brand well.

• The FMCG major's ice-cream business eliminated several stock-keeping units, rationalised manufacturing infrastructure and brought its focus down to six mainline cities only, where 60 per cent of the ice-cream market exists.

• It is also planning to extend Unilever’s retail brand ‘Kwality Walls Swirls’ parlors in accordance with the growing number of shopping malls in India.

• Sailesh Venkatesan, category head, Ice Creams, HLL said: “Our growth will be driven by increasing the availability and offering innovative products at affordable price points.

Thank you

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