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D A R I Y

India is the largest producer of milk producing more

than 100 million tons of milk per annum. Yet, her per capitamilk consumption is around 250 g per day.

W or ld w ide M i l k P r oduct i on

Rank Country Production (109kg/y)

[18]

1 India 114.4

2 United States 79.3

3 Germany 39.4

4 Pakistan 35.2

5 China 32.5

6 Russia 28.5

7 Brazil 26.2

8France

24.2

9 New Zealand 17.3

10 United Kingdom 13.9

http://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Dairy_farming

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Amul (Anand Milk Union Limited), formed in 1946, is adairy cooperative movement in India. It is a brand namemanaged by an apex cooperative organisation, GujaratCooperative Milk Marketing Federation Ltd (GCMMF), whichtoday is jointly owned by some 2.6 million milk producers inGujarat, India

AMULis based in Anand, Gujarat and has been a sterling

example of a co-operative organization's success in the longterm. It is one of the best examples of co-operative achievementin the developing economy. "Anyone who has seen ... the dairycooperatives in the state of Gujarat, especially the highlysuccessful one known as AMUL, will naturally wonder whatcombination of influences and incentives is needed to multiplysuch a model a thousand times over in developing regions

everywhere." The Amul Pattern has established itself as auniquely appropriate model for rural development. Amul hasspurred the White Revolution of India, which has made India the

largest producer of milk and milk products in the world.It is also

the world's biggest vegetarian cheese brand.

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PROD U CT

1- Bread Spreads: -Amul Butter: -Utterly Butterly Delicious,Delicious Table Margarine: -The Delicious way to eat healthy, AmulLite: -Low fat, low Cholesterol Bread Spread.

2- MilkDrinks : -Amul Kool Millk Shaake, Amul Kool, Amul KoolCaf, Amul Kool Chocolate Milk, Amul Kool Thandai, Amul Lassee,Amul Kool Flavoured Tetra Pack, Amul Kool Flavoured BottledMilk, Kool Koko: -A delight to Chocolate Lovers. Delicious Chocolatetaste, Nutramul Energy Drink: -A drink for Kids -provides energy tosuit the needs of growing Kids, Amul Masti Spiced Buttermilk: -Amulintroduces the Best Thirst Quenching Drink.

3- Powder Milk: -Amul Spray Infant Milk Food: -Still, Mother'sMilk is Best for your baby,Amul Instant Full Cream Milk Powder: -Adairy in your home, Sagar Skimmed Milk Powder: -Which is especiallyuseful for diet preparations or for use by people on low calorie and high

protein diet, Amulya Dairy Whitener: -The Richest, Purest DairyWhitener, Sagar Tea Coffee Whitener.

4- Fresh Milk: - Amul Fresh Milk: -This is the most hygienic milkavailable in the market. Pasteurised in state-of-the-art processing plantsand pouch-packed for convenience, Amul Gold Milk, Amul TaazaDouble Toned Milk, Amul Lite Slim and Trim Milk,Amul Lite Slimand Trim Milk, Amul Fresh Cream, Amul Shakti Toned Milk, AmulButtermilk, Amul Calci+.

5- Cheese: -Amul Pasteurised Processed Cheese: -100% VegetarianCheese made from microbial rennet, Amul Cheese Spreads: -TastyCheese Spreads in 3 great flavours, Amul Emmental Cheese: -TheGreat Swiss Cheese from Amul, has a sweet-dry flavour and hazelnutaroma, Amul Pizza Mozzarella Cheese:-Pizza cheese...makes greattasting pizzas!, Gouda Cheese.

6- For Cooking: -Amul/Sagar Pure Ghee: -Made from fresh cream.Has typical rich aroma and granular texture. An ethnic product made by

dairies with decades of experience, Cooking Butter, Amul Malai

Paneer: -Ready to cook paneer to make your favourite recipes!, Mithai

Mate: -Sweetened Condensed Milk-Free flowing and smooth texture.

http://www.amul.com/amul-thandai.html

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White to creamy color with a pleasant taste, Pro-biotic Dahi, Utterly

Delicious Pizza, Masti Dahi.

7- Desserts: -Amul Ice Creams: -Premium Ice Cream made in variousvarieties and flavours with dry fruits and nuts, Amul Mithaee Gulab

Jamuns: -Pure Khoya Gulab Jamums...best served piping hot, Amul

Shrikhand: -A delicious treat, anytime,Amul Chocolates: -The perfect

gift for someone you love,Amul Basundi.

8- Health Drink: - Nutramul: -Malted Milk Food made from maltextract has the highest protein content among all the brown beverage

powders sold in India, Amul Shakti Health Food Drink: -Available in

Kesar-Almond and Chocolate flavours.

9- Curd Products: -Yogi Sweetened Flavoured Dahi (Dessert),AmulMasti Dahi (fresh curd), Amul Masti Spiced Butter Milk, Amul Lassee.10- Amul Icecreams: -Royal Treat Range-(Butterscotch, Rajbhog,

Malai Kulfi),Nut-o-Mania Range-(Kaju Draksh, Kesar Pista Royale,Fruit Bonanza, Roasted Almond), Nature's Treat-(Alphanso Mango,Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, SantraMantra, Fresh Pineapple), Sundae Range-(Mango, Black Currant,Sundae Magic, Double Sundae), Assorted Treat-(Chocobar, Dollies,Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta),Utterly

Delicious-(Vanila, Strawberry, Chocolate, Chocochips, Cake Magic).

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N O. OF STOR S

The firms run 180 stores and are present in Uttar Pradesh,

Punjab, Haryana, Rajasthan and Madhaypradesh. These stores

saw a 30 to 40 percent growth in FMCG sales and a three figure

growth in grocery sales during the April Jun quarter.

Amul is the largest food brand in India and world's

Largest Pouched Milk Brand with an annual turnover of US

$1050 million (2006-07). Currently Amul has 2.6 million

producer members with milk collection average of 10.16 million

litres per day.Members: 13 district cooperative

milk producers' Union

No. of Producer

Members:

2.79 million

No. of Village Societies: 13,328

Total Milk handling

capacity:

11.22 million litres per

day

Milk collection (Total - 3.05 billion litres

Milk collection (DailyAverage 2008-09):

8.4 million litres

Milk Drying Capacity: 626 Mts. per day

Cattlefeed manufacturingCapacity:

3500 Mts per day

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SA LES TU R N OV ER

Sales turnover Rs(million) US$(million)

1994-95 11140 355

1995-96 13790 400

1996-97 15540 450

1997-98 18840 4551998-99 22192 493

1999-00 22185 493

2000-01 22588 500

2001-02 23365 500

2002-03 27457 575

2003-04 28941 616

2004-05 29225 672

2005-06 37736 850

2006-07 42778 1056

2007-08 52554 1325

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TA CTI CS1: -Developing demand: -At the time Amul was formed, consumers had

limited purchasingpower, and modest consumption levels of milk and other dairyproducts. Thus Amul adopted a low-cost price strategy to make its products

affordable and attractive to consumers by guaranteeing them value for money.

2: -Introducing higher value products: -Beginning with liquid milk,GCMMF enhanced the product mix through the progressive addition of highervalue products while maintaining the desired growth in existing products.

3: -The distribution network: -Amul products are available in over 500,000retail outlets across India through its network of over 3,500 distributors. There are

47 depots with dry and cold warehouses to buffer inventory of the entire range ofproducts.

4: -Umbrella branding: -The network follows an umbrella branding strategy.Amul is the common brand for most product categories produced by variousunions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets,

ice-cream and condensed milk.

Amul's sub-brands include variants such as Amulspray, Amulspree, Amulya

and Nutramul. The edible oil products are grouped around Dhara and Lokdhara,mineral water is sold under the Jal Dhara brand while fruit drinks bear the Safal

name.

By insisting on an umbrella brand, GCMMF not only skillfully avoidedinter-union conflicts but also created an opportunity for the union members to

cooperate in developing products.

5: -Managing the supply chain: -Even though the cooperative was formed tobring together farmers, it was recognised that professional managers andtechnocrats would be required to manage the network effectively and make itcommercially viable.

6: -Coordination: -Given the large number of organisations and entities in thesupply chain and decentralised responsibility for various activities, effectivecoordination is critical for efficiency and cost control. GCMMF and the unionsplay a major role in this process and jointly achieve the desired degree of control.

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7: -Managing third party service providers: -From the beginning, it wasrecognised that the unions' core activity lay in milk processing and the production

of dairy products. Accordingly, marketing efforts (including brand development)

were assumed by GCMMF. All other activities were entrusted to third parties.

These include logistics of milk collection,distribution of dairy products, sale ofproducts through dealers and retail stores, provision of animal feed, and veterinary

services.

8: -Establishing best practices: -A key source of competitive advantage hasbeen the enterprise's ability to continuously implement best practices across allelements of the network: the federation, the unions, the village societies and the

distribution channel.

In developing these practices, the federation and the unions have adaptedsuccessful models from around the world. It could be the implementation of small

group activities or quality circles at the federation. Or a TQM program at theunions. Or housekeeping and good accounting practices at the village society level.

9: -Technology and e-initiatives: -GCMMF's technology strategy ischaracterized by four distinct components: new products, process technology, and

complementary assets to enhance milk production and e-commerce.

GCMMF was one of the first FMCG (fast-moving consumer goods) firms inIndia to employ Internet technologies to implement B2C commerce.

Today customers can order a variety of products through the Internet and beassured of timely delivery with cash payment upon receipt.

Another e-initiative underway is to provide farmers access to informationrelating to markets, technology and best practices in the dairy industry through net

enabled kiosks in the villages.

GCMMF has also implemented a Geographical Information System (GIS) at

both ends of the supply chain, i.e. milk collection as well as the marketing process.

10: -Low Price Strategy: -Amuladopted a low-cost price strategyto make its

products affordable and attractive to consumers by guaranteeing them value formoney

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PLA N I M PLI M EN TA T

Aneedwasfelttolookforastrategytomakeitsoperationscompetitiveand

streamlinethecollectionandproductionprocesses ofMilkproductswith thehelpofICT tools.Amuldecided to leverageon thestrengths ofanERPSystemandtookmajorinitiativesinthisdirection in 1994.Amulstudieditsexistingfunctionsandoperations to formulatean IT planforspearheadingitsgrowthin thelongtermperspective.

AutomaticMilkCollectionSystemunits(AMCUS)atvillagesocietieswereinstalled in thefirstphase to automatemilkproducerslogistics.

AMCUS facilitated to capture member information, milk fat contents,

volumecollectedandamountpayable to eachmemberselectronically.

Onanaverage,aroundthousandfarmerscome to sellmilk at their local co-operativemilkcollectioncentre.

Eachfarmerhasbeengivenaplasticcardforidentification.

Atthemilkcollectioncounter,thefarmerdropsthecardintoaboxandtheidentification number is transmitted to a personal computer attached to themachine.

Themilk is thenweighedand the fatcontent of themilk ismeasuredbyanelectronicfattestingmachine. Boththesedetailsarerecordedin thePC.

Thecomputerthencalculatestheamountdue to farmeronthebasis ofthefatcontent.Thevalue of themilk is thenprintedouton aslipandhandedover tofarmerwhocollectsthepaymentatadjacentwindow.

Amulalsoconnecteditszonaloffices,regionalofficesandmembers dairiesthroughVSATsforseamlessexchange ofinformation.

In addition to EIAS, Amul is also using Geographic Information Systems(GIS)forbusinessplanningandoptimization ofcollectionprocesses.

Indian Institute of Management Ahmedabad supplemented Amuls ITstrategy by providing an application software Dairy Information System

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Kiosk(DISK) to facilitate data analysis and decision support in improving milkcollection.

Thekioskwouldalsocontainanextensivedatabaseon thehistory ofcattleownedbythefarmers,medicalhistory ofthecattle,reproductivecycleandhistoryofdiseases.

Besides this, farmers can have access to information related to milkproduction,includingbestpracticesin breedingandrearingcattle.

Using thesame system, the farmerscanevenhaveaccess to amultimediadatabaseon innovationscapturedbySrishti,anNGOworkingwith IIMA. Asalargeamount ofdetailedhistoryonmilkproductionisavailable in thedatabase,thesystem can be used to forecast milk collection and monitor the produce from

individualsellers.Going forward, there are plans to introduce features like Internet banking

servicesandATMswhichwillenablemilksocieties to creditpaymentsdirectly tothesellersbankaccount.

Inlinewiththisvision,officials at Amularelookingatupgradingtheplasticcards which are being currently used only for identification purposes, to smartcardswhichcanbeusedtowithdrawcashfromATMs.

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R ev i ew of Oper at i on s1: -Milk Procurement: -This year total milk procurement by AMULmember unions during the year 2008-09 averaged 87.19 lakh kilograms ( 8.7million kg) per day, representing a quantum growth of 14.87 per cent over 75.90lakh kilograms ( 7.6 million kg) per day achieved during 2007-08. This highgrowth of 14.87 per cent in milk procurement has been achieved, after animpressive growth of 12.9 per cent, last year. The highest procurement as usual,

was recorded during January 2009 at 114.24 lakh kilograms (11.14 million kg) perday. We have also successfully demonstrated our ability to process almost 11million litres of milk per day.

2: - SALES: -During the year, sales of AMUL Federation registered aquantum growth of 27.7 per cent to reach Rs.6711.31 crores ( Rs.67.11 billion).

Last year, AMUL turnover was Rs. 5255.41 crores (Rs. 52.55 billion). This isan

extremely impressive growth, when viewed from the perspective of 22.9 per cent

growth that AMUL had achieved in 2007-08.

Sales of Amul Milk in pouches have grown by 44% in value terms. UHT

milk has also shown an impressive growth of 26%. AMUL sales in AmulProcessed Cheese have shown consistent and very impressive growth of 25%.Amul Ice-cream has shown an impressive growth of 16 per cent in value termsover the last year. At the same time AMUL have remained No. 1 Ice-cream brandin India leaving a wide gap with the nearest competitor. In the Infant Milk Foodcategory, AMUL brand Amulspray registered a growth of 20%. In the dairywhitener segment, Amulya recorded a growth of almost 12%. AMUL managed toachieve 17 per cent value growth in Butter, despite intense competition in thiscategory. In there effort to ensure that all sections of theresociety are able to affordAmul Butter, theyhave given special emphasis to low unit value packs.

3: - RETAILING: -The concept of Amul parlors initiated in 2002 has comea long way and has today, evolved into the most visible face of brand Amul. The

network of more than 4000 parlors in almost all major towns of the country bears

testimony to the fact that the model is hugely scalable and inherently sustainable.

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This retailing initiative has not only enabled themto interface directly with

consumer, it has also helped them in there endeavor to reduce middle-men from

the supply chain.

Taking cue from the success of AMUL parlors, commitment from theresales team and all there channel partners dealing in milk, ice-cream and dairyproducts; theyplan to take the total tally of Amul parlors to 10000 by adding 6000parlors during the coming financial year.

4: -EXPORT: -Despite unfavorable conditions in international dairy market,AMULs export business reached Rs.133 crores against Rs.125 crore last year.They have further consolidated there growth in consumer products includingPaneer, Butter, Cheese, UHT Milk etc. This is extremely encouraging and indicatesthe high trust that our customers place in Amul Brand. Theyhave not been able to

export Milk Powder in bulk packing in larger quantitydue to fall of world marketprices by nearly 50% as compared t previous year.

5: -DISTRIBUTION NETWORK: -Over a period of time AMUL havebuilt unique capabilities of distributing Ambient, Chilled, Frozen and Freshproducts simultaneously through there versatile distribution highways. Today,3500 Distributors for Value added milk products, 1800 Distributors for Fresh Milk,ensure that Amul Products are available to all segments of consumers in Indiathrough more than 2 Million outlets.

In Federation, there distributor is considered to be the real MarketingManager. To update them with modern marketing concept a workshop onMarketing and Sales Management is being conducted in collaboration with apremier business school. So far, 1100 Distributors have been benefited from thisworkshop.

There Amul Yatra Programmes ensure that thereevery new distributor andother business partners visit Anand to get an exposure to our co-operativestructure, there culture as well as there operational systems and processes. Theinitiative continued this year as well and so far, about 7400 Distributors and otherbusiness associates have visited Anand on Amul Yatra.

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PR OBLEM OR I SSU E

1-Perishabilityof product.2-Cooling system is not availableevery where.3-ProblemsareaddressedinlogisticsincollectionofMilkfrom

villages.

4-Problems in distribution of perishable product in on a dailybasis.

5-Problem in gathering spare product from market.6-Local dairy like Shyam Doodh (East, U.P.), Verka Milk

(Punjab-Haryana), Lakshami Dairy (NCR), Sachi Milk(M.P.), Parag Milk (U.P.) etc.

7-Emotional Problems in Infancy and Childhood.