Amul, through its vision 2030, aims at a 35 percent reduction in specific carbon emissions, recycling 700kilolitres/day of water...
"Amul's strategic move to focus on high-growth categories such as protein and probiotics is wise in today's health-conscious market. By utilising its cheese whey to make high-protein products, Amul aims to cater to the growing demand for protein-rich foods in India, thereby reducing the need for expensive whey protein imports,"says Rahul Ghose, Founder & CEO, Hedged.
Mehta sees the range of high-protein buttermilk and lassi to become a major growth driver, especially among the younger generation."When every Indian understands that they need to consume one gram of protein daily per kg of their body weight, you can imagine the kind of market opportunity," he says.
He adds that protein is like the US dollar, a global currency which will also help Amul go global at a scale. "The benefit we give to our consumers is a guilt-free indulgence," he states.
Amul's strategy is also to present itself as a modern and contemporary brand."One significant challenge is maintaining, and further enhancing, the image of Amul as a contemporary, modern food brand, especially among youngsters and children," GCMMF Chairman Shamalbhai Patel said in the group's 48th Annual Meeting in June 2022.
In the carbonated drinks space, which has heated up after Reliance Industries acquired Campa-Cola, Amul is upbeat on "Tru Seltzer: Though Mehta says Amul is not directly pitting itself against the 'Cokes' and 'Pepsis'.
Ghose says this category may be a misfit for Amul as Tru Seltzer, a carbonated beverage, cannot be considered healthy. "Brand Amul is known for offering natural, trusted, and nutritious products" he adds.
Market Visibility
A cursory glance at Amul's extensive product portfolio in the non-dairy segment raises the question: Why are most of these products not on shelves in markets beyond Gujarat and neighbouring states?
Asenior official at one ofAmul's plants in Anand says that most of these products have been launched recently. He adds that GCMMF analyses market trends across regions to gauge demand and the basis for the production cycle to kick in.
"Northern markets at present may not be having that demand for these products, and hence you don't see many of them in the market," the official says.
The weak market penetration ofAmul's products brings back memories of its past diversification bet in various categories, such as chocolates, energy drinks, frozen foodset which failed to create a dent in the market.
Amul is also focused on creating a strong distribution network across India. It has 10,000 distributors, which cater to 1million retail outlets."The company has now expanded its direct distribution reach to towns with 10,000+population,and it plans to now penetrate in 5,000-+ population towns", ICICI Securities notes.
But Mehta believes that all of Amul's past diversifications beyond dairy and value-added dairy products came with multiple learnings through which they better understood the market trends and consumer preferences in that category.
In the chocolate segment, for example, while Amul maybe having just 10 per cent of the market share, but today, we are the largest brand of dark chocolates in India, Mehta says.
Mehta says that Amul's USP is consistency, and it will continue with its legacy campaigns for marketing. It also aggressively used the 'Amul Girl' to connect with the masses, which according to Mehta, has seamlessly transitioned from hoardings to social media.
Amul's ESG Story
Beyond capturing market share or competing with established FMCG behemoths, Mehta believes it is the farmers' interest that Amul has consistently put forward.
There is no better proof of this than the 36lakh farmers of Shekhadi and 17,999 other villages who own Amul.
The Amul model enabled farmers to be involved in decision-making at every stage of operation, from milk procurement and processing to product manufacturing and marketing.
Mehta says that when it comes to the ESG story of Amul, they didn't have to invent the purpose. "Since our inception in 1946, the purpose has been built in. Ever since we started, we were clear that we cannot be self-centred".
Amul has maximised returns on milk supplied by the farmers and provides incentives for better quality milk. During the pandemic, Amul ensured that milk procurement didn't stop, farmers were compensated, and employees were taken care of.
"Every Rs 100 you spend on Amul products, Rs 80-85g goes back to the producer;" Mehta states.
As to the sustainability aspect across the entire value chain, Amul, through its Vision 2030, aims at 35 per cent reduction in specific carbon emissions, recycling 700 kilo-litres/day of water, and a 20 per cent reduction in chemical consumption.
Mehta explains that Amul has started developing a robust circular economy, which will become a classic case for India. "India has demonstrated that cow is not a problem but a dolution," he says.
India's FMCG majors have announced plans to ramp up manufacturing and innovation as they forecast a healthy revival in the sector.
Amul, through its strong brand legacy and distribution reach coupled with its ever-evolving marketing playbook and experience from past diversifications, can make the non-dairy food segment a significant growth driver as it aims for a Rs 1 lakh crore turnover by 2025. With a diversified portfolio in the segment, India's best-kept FMCG seeret may soon be revealed.
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