GCMMF – Gujarat Cooperative Milk Marketing Federation Ltd

Group B12

Dairy Map of India

High

Medium

Low

DAIRY INDUSTRY IN INDIA

• Dairy Cooperatives account for the major share of processed liquid milk (around 20%)

• 170 Milk Producers’ Cooperative Unions spread across 22-state cooperative dairy federation.

• Leading brands- Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan), Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur).

• Products : Pouched Milk, Butter, Cheese, Ice-cream, Flavoured Milk, Ghee, Lassi.

Amul

1973 2011 2012-17

Situation AnalysisRoadmap for 2012-17

The Amul Model of dairy development is a three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level.

·Establishment of a direct linkage between milk producers and consumers by eliminating middlemen·Milk Producers (farmers) control procurement, processing and marketing·Professional management

The Amul model has helped India to emerge as the largest milk producer in the world. More than 13 million milk producers pour their milk in 1, 28,799 dairy cooperative societies across the country. Their milk is processed in 176 District Co-operative Unions and marketed by 22 State Marketing Federations, ensuring a better life for millions.

Amul’s Profile

Source: Amul’s website

The Market Model

Economic Aspect

Socio-Cultural Aspect

Source: Amul’s website

Amul’s Market ShareProduct Category Market Share in India

Butter 90%

Cheese 80%

Ice-cream 40%

Pouched Milk 25%

Source: The Economic Times, Feb. 12, 2012

Operations InfoScale and Size $2.2 bn. Revenue; Large product

portfolio

Procurement From 3 million farmers; 3.45 bn. Liters milk

Reach 5000 dealers & 10 lakh retailers

Margins Low-margin business; 2-5%

Source: The Economic Times, Feb. 12, 2012

Amul’s Product Portfolio

Amul’s Export

BCG Matrix Analysis

Stars

Ice Cream, UHT Milk, Cheese, Flavored Milk,

Milk Powders,

Question Marks

Chocolates

Cash Cows

Pouch Milk, Ghee, Butter

Dogs

Market Share

High Low

High

Market Growth

Low

4I’s of AmulImprovement

in Rural Economy

Idea

CompetitionCategory Business Environment Competition Growth

Pouched Milk Huge Investment Required ; Unorganized sector

Mother Dairy 6%

Flavored Milk Very high growth Mother Dairy, Nandini 25%

Milk powder High Price ; Export Opportunities Nestle, Britannia 10%

Baby Food Huge Margin, Single Major Player Nestle (95% share) 10%

Ghee Home-made preferred Unorganized market 9%

Butter Consumers increasing favoring low-fat varieties

Britannia 7%

Cheese Opportunities in rural market Britannia, Dabur 15%

Ice Cream Competitive Kwality Walls, Vadilal, Mother Dairy 12%

Paneer Market penetration possible Amul is the only national player having >50% share of organized

market.

8%

Flavored Yogurt New category and gaining quick acceptance, considered as a

premium product

Nestle, Danone, Cocoberry 22%

Lassi Good preference for unorganized sector

Few organized players, Mother Dairy etc. Major competition is

restaurants.

13%

Trends in CompetitionMother Dairy Co-operative roots; strong in NCR

Parag Dairy Fast Growth rate. More than 10%

Nestle Old player; have future plans in dairy segment

HUL Big player with financial muscles

Britannia Strong in cheese market

Future GrowthProduct Category Indian Market Size 2015

(estimation)

Branded Pouched Milk 50,000 cr. INR

Branded Butter 1200-1400 cr. INR

Branded Cheese 400-500 cr. INR

Branded Ice cream 1500 cr. INR

Flavored Milk 300 cr. INR

Trends

• According to Assocham, milk production in India

is likely to reach 190 million tons by 2015 with an annual turnover of INR 5 lakh crore.

• PE firms could take an interest in private dairies; supply of capital for expansion

• Brand wars – A+ with Nestle and more.• Increase in capacity required (current = 9+ million

liters per day)

Perceptual Map: Guiding Factor

Economic Impact

Soci

etal

Impa

ct Continue/Enter

Discontinue / Do Not Enter

Ansoff Matrix Analysis

Market Penetration

Fresh MilkGhee, Milk Powders

Ice Cream

Product Development

Fat Free DessertCooking Chocolate

SoupsLassi, Diabetic Products,

Healthy products

Market Development

South East Asia andMiddle East with products like

Srikhand, Paneer & Butter

DiversificationSouth East Asia and

Middle East with products likeSterilized Paneer, Cow Ghee,

Confectionery items

Product

Existing New

Existing

Markets

New

SWOT Analysis

Brand Positioning

Brand Positioning

• Shift in Focus - Youth• Amul butter girl – witty topical ads – has been

largely successful. Longest running campaign – should be continued

• Sponsoring Netherlands in the cricket world cup• F1 race• Amul Cafes• Recently, it re-launched its theme song

(leveraging digital media).

Future Roadmap

•Promote sub-branding within the AMUL brand to target high-end customers

• Shift in focus on youth to be continued

• Go for ‘product development’ using premium products

•Gain greater control over the distribution channel in major markets to counter threats from upcoming retail formats

•Emphasize Brand Management

•Creation of Strategic Business Units based on distribution channels

Future Roadmap• Increase capacity to (triple) to drive down the prices• Focus on inbound logistics and outbound logistics to improve the

margins• Increase dealers from 5000 to 10,000. Retailers from 10 lacs to

12.5 lacs (Uniform increase)• Focus on Flavored milk and yogurt market. Target 40+% market

share.• Increase organized market from 15% to 40% (5% every year)• Increase the number of parlors from 6000 to 12,000. Number of

cafes to 400; Number of stalls at railway stations from 177 to 350• Product development – Diabetic products. Exit Chocolate market• Revenue growth from $2.2 bn. To $ 5 bn. in next five years

Financials(INR Cr) 2011 2012 2013 2014 2015 2016 2017

Yoghurt & Curd 2276 2777 3388 4133 5042 6151 7505

Flavoured Milk 892 1115 1394 1742 2178 2722 3403

Total Market 3168 3892 4781 5875 7220 8874 10907

Target Market 1109 1362 1673 2938 3610 5768 7090

Revenues 277 341 469 911 1227 2134 2836

Profit Margin 10% 10% 10% 10% 10% 10% 10%

Profits 28 34 47 91 123 213 284

(INR Cr) Market Share Market Size Growth Rate Revenue

Branded Pouched Milk 40% 56180 6% 22472

Branded Butter 90% 1602.86 7% 1442.574

Branded Cheese 85% 661.25 15% 562.0625

Branded Ice-Cream 50% 1881.6 12% 940.8

Nutritous Products 20% 363 10% 72.6

Expected Revenue (2017) 26717 INR Cr

5.34 USD bn.

Financials

Target Market of total market1st Phase 35%2nd phase 50%3rd Phase 65%

Market share

2012 25%

2013 28%

2014 31%

2015 34%

2016 37%

2017 40%

THANK YOU!