Amul (Anand Milk Union Limited)

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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2000
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1946 1999 2007 2008 2009 2010
Time Frame
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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

Raw
Milk
Condensed

Ghee
Butter
Cream

Packaged
Milk

Ice cream
Beverages


Dried

Skimmed
Milk
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 Caf 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 Caf, 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 brands 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-cream
Probiotic and sugar-free variants
Chocolates
sugar-free brand called Choco-Mini to target the diabetic




Positioning
Given this wide product portfolio, Amuls
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 brands 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 Amuls 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 Butter
cash 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 Processed Cheese Spread
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 2
nd
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


Sagar
Amul 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

Sagar
skimmed milk powder-40 per cent share

Amuls 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 its brands of milk power,
amulya & sagar. Thus creating barriers by segmentation for entry of
competitors.


Sagar
Amulspray-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
Nestle
Cheese
Britannia
Baby Food
Nestle
Heinz
Dairy Whitener Segment
Nestle
Britannia
Ice creams
HLL

Chocolates & Confectionaries
Cadbury
Nestle
Pizza
Pizza Hut
Dominos
Nirulas Frozen pizza
Curd
Nestle
Mother Dairy
Ultra 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.

Nestl 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 powder
b. 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), Nestl Cerelac
Stage 4 and Nestl 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, clairs,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 Unilevers 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
Questions?