Amul Research Paper
Amul Research Paper
KEYWORDS
Rupinder Kaur
Assistant Professor, GGS Khalsa College for Women, Jhar Sahib, Ludhiana, Punjab.
ABSTRACT The brand name "Amul," from the Sanskrit "Amoolya," was suggested by a quality control expert in Anand
formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organi-
sation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.8 million
milk producers in Gujarat, India. AMUL is based in Anand, Gujarat and has been an example of a co-operative organiza-
tion's success in the long term. It is one of the best examples of co-operative achievement in the developing economy.
"Anyone who has seen the dairy cooperatives in the state of Gujarat, especially the highly successful one known as AMUL,
will naturally wonder what combination of influences and incentives is needed to multiply such a model a thousand times
over in developing regions everywhere." The Amul Pattern has established itself as a uniquely appropriate model for rural
development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk
products in the world.
Introduction The turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11
Amul is the largest food brand in India and world’s Largest billion. It markets the products, produced by the district milk
Pouched Milk Brand with an annual turnover of US $1050 unions in 30 dairy plants, under the renowned AMUL brand
million (2006-07). Currently Unions making up GCMMF have name. The combined processing capacity of these plants is
2.8 million producer members with milk collection average of 11.6 million litres per day, with four dairy plants having pro-
10.16 million litres per day. Besides India, Amul has entered cessing capacity in excess of 1 million Litres per day. The farm-
overseas markets such as Mauritius, UAE, USA, Bangladesh, ers of Gujarat own the largest state of the art dairy plant in
Australia, China, Singapore, Hong Kong and a few South Af- Asia – Mother Dairy, Gandhinagar, Gujarat - which can handle
rican countries. Its bid to enter Japanese market in 1994 did 2.5 million litres of milk per day and process 100 MTs of milk
not succeed, but now it has fresh plans entering the Japa- powder daily. During the last year, 3.1 billion litres of milk was
nese markets. Other potential markets being considered in- collected by Member Unions of GCMMF. Huge capacities for
clude Sri Lanka. Dr Verghese Kurien, former chairman of the milk drying, product manufacture and cattle feed manufacture
GCMMF, is recognised as a key person behind the success of have been installed. All its products are manufactured under
Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the Banas- the most hygienic conditions. All dairy plants of the unions
kantha Union, was elected chairman of GCMMF. are ISO 9001-2000, ISO 22000 and HACCP certified. GCMMF
(AMUL)’s Total Quality Management ensures the quality of
History of Amul products right from the starting point (milk producer) through
• Amul (Anand Milk Union Limited), formed in 1946, is a the value chain until it reaches the consumer.
dairy cooperative movement in India.
• It is managed by Gujarat Co-operative Milk Marketing Ever since the movement was launched fifty-five years ago,
Federation Ltd. (GCMMF). Gujarat’s Dairy Cooperatives have brought about a signifi-
• AMUL is based in Anand, Gujarat and has been a sterling cant social and economic change to our rural people. The
example of a co-operative organization’s success in the Dairy Cooperatives have helped in ending the exploitation
long term. The Amul Pattern has established itself as a of farmers and demonstrated that when our rural producers
uniquely appropriate model for rural development. benefit, the community and nation benefits as well.
• Amul has spurred the White Revolution of India. It is also
the world’s biggest vegetarian cheese brand. The Gujarat Cooperative Milk Marketing Federation Ltd.
cannot be viewed simply as a business enterprise. It is an
The Gujarat Cooperative Milk Marketing Federation Ltd, institution created by the milk producers themselves to pri-
Anand (GCMMF) is the largest food products marketing or- marily safeguard their interest economically, socially as well
ganization of India. It is the apex organization of the Dairy Co- as democratically. Business houses create profit in order to
operatives of Gujarat (Dasgupta, 2012). This State has been a distribute it to the shareholders. In the case of GCMMF the
pioneer in organizing dairy cooperatives and our success has surplus is ploughed back to farmers through the District Un-
not only been emulated in India but serves as a model for ions as well as the village societies. This circulation of capital
rest of the World. Over the last five and a half decades, Dairy with value addition within the structure not only benefits the
Cooperatives in Gujarat have created an economic network final beneficiary – the farmer – but eventually contributes to
that links more than 2.8 million village milk producers with the development of the village community. This is the most
millions of consumers in India and abroad through a cooper- significant contribution the Amul Model cooperative has
ative system that includes 13,141 Village Dairy Cooperative made in building the Nation. GCMMF: Gujarat Cooperative
Societies (VDCS) at the village level, affiliated to 13 District Milk Marketing Federation. GCMMF is India’s largest food
Cooperative Milk Producers’ Unions at the District level and products marketing organization. It is a state level apex body
GCMMF at the State level. These cooperatives collect on an of milk cooperatives in Gujarat which aims to provide remu-
average 7.5 million litres of milk per day from their producer nerative returns to the farmers and also serve the interest
members, more than 70% of whom are small, marginal farm- of consumers by providing quality products which are good
ers and landless labourers and include a sizeable population value for money.CRISIL, India’s leading Ratings, Research,
of tribal folk and people belonging to the scheduled castes. Risk and Policy
Facts: ble for Marketing of Milk & Milk Products Responsible for
Cattle feed manufacturing 3500 Mts. per day Procurement & Processing of Milk Responsible for Collection
of Milk Responsible for Milk Production
Capacity:
No. of Village Societies: 13,328 1. Village Dairy Cooperative Society (VDCS)
2. District Cooperative Milk Producers’ Union (Milk Union)
No. of Producer Members: 2.79 million 3. State Cooperative Milk Federation (Federation)
Milk collection (Total - 2008- 09): 3.05 billion litres Impact of the “Amul Model”
The effects of Operation Flood Programme are more ap-
Total Milk handling capacity: 11.22 million litres per day praised by the World Bank in its recent evaluation report. It
has been proved that an investment of Rs. 20 billion over
Milk collection (Daily Average 2008-09):8.4 million litres 20 years under Operation Flood Programme in 70s & 80s
has contributed in increase of India’s milk production by 40
Milk Drying Capacity: 626 Mts. Per day Million Metric Tonne (MMT) i.e. from about 20 MMT in pre-
Operation Flood period to more than 60 MMT at the end of
Members:13 district cooperative milk producers’. Operation flood Programme. Thus, an incremental return of
Rs. 400 billion annually have been generated by an invest-
The Birth of Amul and development of India’s Dairy Coop- ment of Rs. 20 billion over a period of 20 years. This has
erative Movement been the most beneficial project funded by the World Bank
The birth of Amul at Anand provided the impetus to the co- anywhere in the World. One can continue to see the effect of
operative dairy movement in the country. The Kaira District these efforts as India’s milk production continues to increase
Cooperative Milk Producers’ Union Limited was registered on and now stands at 90 MMT. Despite this four-fold increase in
December 14, 1946 as a response to exploitation of marginal milk production, there has not been drop in the prices of milk
milk producers by traders or agents of existing dairies in the during the period and has continued to grow.
small town named Anand (in Kaira District of Gujarat). Milk
Producers had to travel long distances to deliver milk to the Due to this movement, the country’s milk production tripled
only dairy, the Polson Dairy in Anand. Often milk went sour between the years 1971 to 1996. Similarly, the per capita
as producers had to physically carry the milk in individual milk consumption doubled from 111 gms per day in 1973
containers, especially in the summer season (George, 1985). to 222 gms per day in 2000. Thus, these cooperatives have
not just been instrumental in economic development of the
The success of the dairy co-operative movement spread rap- rural society of India but it also has provided vital ingredient
idly in Gujarat. Within a short span five other district unions – for improving health & nutritional requirement of the Indian
Mehsana, Banaskantha, Baroda, Sabarkantha and Surat were society. Very few industries of India have such parallels of de-
organized. In order to combine forces and expand the market velopment encompassing such a large population.
while saving on advertising and avoid a situation where milk
cooperatives would compete against each other it was de- These dairy cooperatives have been responsible in uplifting
cided to set up an apex marketing body of dairy cooperative the social & economic status of the women folk in particular
unions in Gujarat. Thus, in 1973, the Gujarat Co-operative as women are basically involved in dairying while the men are
Milk Marketing Federation was established. The Kaira District busy with their agriculture. This has also provided a definite
Co-operative Milk Producers’ Union Ltd. which had estab- source of income to the women leading to their economic
lished the brand name AMUL in 1955 decided to hand over emancipation.
the brand name to GCMMF (AMUL). With the creation of GC-
MMF (AMUL), managed to eliminate competition between The three-tier ‘Amul Model’ has been instrumental in bring-
Gujarat’s cooperatives while competing with the private ing about the White Revolution in the country. As per the
sector as a combined stronger force. GCMMF (AMUL) has assessment report of the World Bank on the Impact of Dairy
ensured remunerative returns to the farmers while providing Development in India, the ‘Anand Pattern’ has demonstrated
consumers with products under the brand name AMUL. the following benefits:
This was possible due to the leadership of the founder Chair- • The role of dairying in poverty reduction.
man of AMUL, Tribhuvandas Patel and the vision of the father • The fact that rural development involves more than agri-
of the White Revolution, Dr. Verghese Kurien who worked cultural production.
as a professional manager at AMUL. Numerous people con- • The value of national ‘ownership’ in development.
tributed to this movement which would otherwise not have • The beneficial effects of higher incomes in relieving the
been possible. Dr. Verghese Kurien, the World Food Prize worst aspects of poverty.
and the Magsaysay Award winner, is the architect of India’s • The capacity of dairying to create jobs.
White Revolution, which helped India emerge as the largest • The capacity of dairying to benefit the poor at low cost.
milk producer in the worldIndia has already demonstrated • The importance of commercial approach to develop-
the superiority of this approach. ment.
• The capacity of single-commodity projects to have multi-
The Three-tier “Amul Model” dimensional impacts.
The Amul Model is a three-tier cooperative structure. This • The importance of getting government out of commer-
structure consists of a Dairy Cooperative Society at the vil- cial enterprises.
lage level affiliated to a Milk Union at the District level which • The importance of market failure in agriculture.
in turn is further federated into a Milk Federation at the State • The power & problems of participatory organizations.
level. The above three-tier structure was set-up in order to • The importance of policy.
delegate the various functions, milk collection is done at the
Village Dairy Society, Milk Procurement & Processing at the Amul Brand Building
District Milk Union and Milk & Milk Products Marketing at the GCMMF (AMUL) has the largest distribution network for any
State Milk Federation. This helps in eliminating not only in- FMCG company. It has nearly 50 sales offices spread all over
ternal competition but also ensuring that economies of scale the country, more than 3,000 wholesale dealers and more
is achieved. As the above structure was first evolved at Amul than 5,00,000 retailers.
in Gujarat and thereafter replicated all over the country under
the Operation Flood Programme, it is known as the ‘Amul AMUL is also the largest exporter of dairy products in the
Model’ or ‘Anand Pattern’ of Dairy Cooperatives.Responsi- country. AMUL is available today in over 40 countries of the
world. AMUL is exporting a wide variety of products which Reasons for Success
include Whole and Skimmed Milk Powder, Cottage Cheese • Robust Supply Chain-The vast and complex supply chain
(Paneer), UHT Milk, Clarified Butter (Ghee) and Indigenous Hierarchical network of cooperatives
Sweets. The major markets are USA, West Indies, and coun- • Stretches from small suppliers to large fragmented mar-
tries in Africa, the Gulf Region, and [SAARC] SAARC neigh- kets
bours, Singapore, The Philippines, Thailand, Japan and • Low Cost Strategy
China. • Amul adopted a low-cost price strategy to make its prod-
ucts affordable and attractive to consumers by guaran-
In September 2007, Amul emerged as the leading Indian teeing them value for money
brand according to a survey by Synovate to find out Asia’s • Diverse Product Mix
top 1000 Brands. • Amul Butter, Milk Powder, Ghee, Amulspray, Cheese,
Chocolates, Shrikhand, Ice cream, Nutramul, Milk and
Products Amulya
Amul’s product range includes milk powders, milk, butter, • Strong Distribution Network
ghee, cheese, curd, chocolate, ice cream, cream, shrikhand, • Amul products are available in over 500,000 retail outlets
paneer, gulab jamuns, flavoured milk, basundi, Nutramul across India through its network of over 3,500 distributors.
brand and others. In January 2006, Amul plans to launch In- • 47 depots with dry and cold warehouses to buffer inven-
dia’s first sports drink Stamina, which will be competing with tory of the entire range of products.
Coca Cola’s Powerade and PepsiCo’s Gatorade. • Technology and e-initiatives
• New products
In August 2007, Amul introduced Kool Koko, a chocolate • Process technology
milk brand extending its product offering in the milk products • Complementary assets to enhance milk production
segment. Other Amul brands are Amul Kool, a low calorie • E-commerce
thirst quenching drink; Masti Butter Milk; Kool Cafe, ready to
drink coffee and India’s first sports drink Stamina. Facts:
Cattle feed manufacturing 3500 Mts. per day
Amul’s sugar-free Pro-Biotic Ice-cream won The International
Dairy Federation Marketing Award for 2007. Capacity:
No. of Village Societies: 13,328
Mascot
Since 1967 Amul products’ mascot has been the very recog- No. of Producer Members: 2.79 million
nisable “Amul baby” (a chubby butter girl usually dressed in
polka dotted dress) showing up on hoardings and product Milk collection (Total - 2008- 09): 3.05 billion litres
wrappers with the equally recognisable tagline Utterly But-
terly Delicious Amul.The mascot was first used for Amul but- Total Milk handling capacity: 11.22 million litres per day
ter. But in recent years in a second wave of ad campaign for
Amul products, she has also been used for other product like Milk collection (Daily Average 2008-09):8.4 million litres
ghee and milk.
Milk Drying Capacity: 626 Mts. Per day
White Revolution
The establishment of Amul is also known as White Revolu- Members:13 district cooperative milk producers’
tion. The White Revolution of India inspired the notable
Indian film-maker Shyam Benegal to base his film Manthan Customer Based Market Segmentation
(1976) on it. The film starred Smita Patil, Girish Karnad, Na- Amul – Product Portfolio
seeruddin Shah and Amrish Puri. The film itself was financed
by over five lakh rural farmers in Gujarat who contributed Rs 2
each to the film’š budget. Upon its release, these same farm-
ers went in truckloads to watch ‘their’ film, making it a com-
mercial success, the film was chosen for the 1977 National
Film Award for Best Feature Film in Hindi. The Amul success
story is taken up as a case study in marketing in many premier
management institutes across the world.
REFERENCE Amul – The Taste of India. "Welcome to Amul – The Taste of India". Amul.com. Retrieved 2010. | Dasgupta, Manas (2012). "‘Kurien strode like
a titan across the bureaucratic barriers and obstacles’". The Hindu (Chennai, India). | George, Shanti (1985). Operation flood: an appraisal of
current Indian dairy policy. Delhi: Oxford University Press. ISBN 978-0-19-561679-8. | Heredia, Ruth (1997). The Amul India story. New Delhi: Tata McGraw-Hill. | http://
www.amul.com/m/organisation | Suhrud, Tridip (2006). "The magic of manthan". Tehelka. |