|
|
The
Amul twist
RS
Sodhi, General Manager (Marketing), GCMMF, in conversation with Shuchi
Srivastava, explains Amul’s retailing plans and expansion strategies
 The
Gujarat Cooperative Milk Marketing Federation (GCMMF) has achieved 18
per cent growth during 2003-04 to close the year with a Rs 2,882 crore
turnover, so it has been an enthusiastic year for Amul?
Our March closing was exceptionally good as an
overall growth was witnessed across all our dairy products.
What percentage of this growth would you attribute
to business garnered from the organised retail segment in India?
As far as GCCMF is concerned, the contribution from the organised
retail segment would be negligible, say about 2-3 per cent. Except for
a few cities like Hyderabad and Bangalore, the actual penetration of
the organised retail segment is not really significant in other parts
of India.
But what about the fact that the distribution
of your products is carried out through a network of 4,000 stockists
who, in turn, supply to 500,000 retail outlets?
These outlets would not fall in the organised segment but rather
in the traditional unorganised one.
You have recently introduced new processes where
you plan to launch new products, or re-launch old ones every Thursday
of the week? Don’t you think such an increase in your product portfolio
would be enhanced if these new products are present in organised retail
formats?
Yes, the opportunity is immense but as I said
earlier, due to the lack of an established market presence, such formats
are not really high on our list of priorities. It would make much more
sense to liase with local selfowned supermarkets who have all the amenities
of an organised retail format. There is no special strategy to specifically
target the organised segment. This does not mean that they don’t
figure on our list at all; they do, but just as any other category.
Are your products accorded any special treatment
in terms of packaging, labelling or other areas when sent to organised
retail formats?
No, none at all we have the same range of products across all
categories.
Given that there has been a shift towards branded food products, across
urban markets, why has their sale through organised retail formats not
taken off?
Clearly because there is no significant cost advantage
offered to consumers in order to lure them away from the comfort of
their local mom-andpop stores. At the latter option, one may still find
a definite price advantage that is instrumental in cementing a longlasting
relationship with the customer. An inviting ambience is an experience
that organised retail formats offer but gradually this advantage too
is losing its edge as the smalltime, so-called unorganised retailer
is also waking up to the fact.
|
Fresh
and ‘Taaza’
|
Amul
doubles exports
|
|
GCMMF plans to focus on marketing Amul Taaza, the long-life milk
in both domestic and export markets after the impressive response
received by the product in the domestic market. The long-life
milk market segment in India has grown from 1.4-lakh litres a
day to 1.9-lakh litres a day during March 2003, to February 2004.
Amul Taaza has increased its market share in this segment from
40 per cent in March 2003 to over 65 per cent by end of February
2004. Officials in the company say long-life milk is among the
safest and healthiest milk options available to consumers all
over the world as it is bacteria-free and packed in tamper-proof
packs. Amul Taaza milk can be stored at room temperatures for
over 180 days and does not need refrigeration till cut open. In
spite of this consumption of long-life milk in India has not been
commensurate with its attributes. Now the federation is making
all-out efforts to promote this healthy alternative through its
Amul Taaza brand. Through a sustained campaign, the federation
is trying to convey to consumers the benefits of long-life milk,
according to a press release from the company. Amul Taaza has
already assumed the market leader position in countries of West
Asia, Hong Kong, Singapore and Sri Lanka, according to the company.
|
Spurred by the recent reduction in dairy subsidies by the European
Commission, the stagnant milk output in US and Europe and aided
by low-cost production in India, GCMMF has set itself its single
biggest export target ever. It has projected doubling of exports
in 2004-05 from the last financial year, amounting to Rs 90 crore.
“With the EU subsidy cut, low-cost imports from Europe and
other markets will dip. This will increase the Indian dairy sector’s
competitiveness globally,” says RS Sodhi, GM, Marketing,
GCMMF. The subsidy cut will also help Indian exporters achieve
higher realisations from the EU, and subsequently furnish better
returns to the farmers. The reductions are primarily on butter
oil, skimmed milk powder and white butter. At the top of GCMMF’s
export list are skimmed milk powder (SMP) in bulk, Ultra High
Temperature (UHT) milk in tetrapacks, butter, cheese, ice-cream,
ghee (or clarified butter), paneer (cottage cheese) and desserts.
All these are being exported under the Amul umbrella brand. Bulk
exports of SMP have the highest growth potential. Among branded
products, Amul is pitching its UHT milk, branded Amul Long Life,
upfront. “We expect to sell Rs 20 crore of UHT milk in 1
litre tetrapacks in overseas markets in this financial year,”
says Mr Sodhi. In 2003-04, GCMMF’s sales grew by 5 per cent
to Rs 2,882 crore, with dairy business growing by 18 per cent
despite the loss of its edible oils business. Milk production
in India has reached 86 million tonnes, making it the largest
milk producing country and production growing at a rate of 4-5
per cent per year. The output in US, the second largest milk producing
country, is estimated at close to 72 million tonnes.
|
....C
O N T D
TO
READ FURTHER... SUBSCRIBE TO YOUR
COPY TODAY!!!
|
Other
B2B magazines
|
