AMUL is the largest milk and milk based products manufacturer in India. Founded in 14 December 1946 by Verghese Kurien, in his name India celebrates National Milk Day every year on 26th November . Headquartered in Anand Gujarat has an annual turnover of 5.9 Billion USD for the year (16-17). Known to be the founder of the white revolution in India, Amul has many market leading products and brands up its sleeves, strongest of them being Amul ice cream which has a market share of around 30% in the organised Ice Cream Market.
Similarly, the Milk & Dairy products company has a very in-depth product range including Milk variants, cheese, butter, curd, chocolates, ice cream, and others.
Let’s dive into SWOT analysis of India’s number one Dairy Brand AMUL.
Strengths of AMUL:
Exceptional Growth: AMUL has grown 3.5 times in the last 7 years to 27000 crores in 2016-17. And set a ambitious target of 50000 crores by 2020-21.
Production Capacity: The 18-member unions of GCMMF provide around 17.7 million litres of milk per day. GCMMF ranks among the top 13 dairy companies of the world in terms of milk processing as per International Farm Comparison Network.
Market Leader: Amul Ice Cream has 1/3rd market share in organised ice cream sector India. Which is growing @ 30% CAGR. Other VAP’s like Cheese and Flavoured milk are poised for impressive growth of above 20% CAGR in the next 5 years. Which gives AMUL many smiles as a leader in these segments.
Brand recall: There is any other brand like Amul when it comes to Brand Equity and Recall thanks to its Amul baby campaign which beautifully threads through every occasion and news point. Which made AMUL milk and milk based products favourite brand for every household in India.
Persistent Quality: Quality management at micro level in procurement and with efficient distribution network, quality of AMUL stayed unchanged over the years which adds to customer trust.
Huge Product & Variants: AMUL offers 21 Major Brands and 100+ sub-brands. The product mix is designed to suit almost every milk based products consumption. Added with nationwide distribution network AMUL makes sure it appears on all major retail shelves.
Reach till Rural: AMUL is perhaps only Milk products brand in India which has a distribution network to maximum rural places, making this as an distinctive advantage over competition.
Weaknesses of AMUL:
Operational Cost: AMUL’s operation cost is huge as it’s a co-operative structure. Adding to that is the margins in Milk are thin and maintaining margins becomes difficult given price changes and growing needs of farmer community. Much of operational weakness can be attributed as challenges rather which are constant. In fact, during summers, the brand faces severe shortage of supply.
Portfolio expansion: Although AMUL has built strong pipeline of products in milk based VAP’s it is yet to enter and taste the success in products like Chocolates etc…
Opportunities for AMUL:
Per Capita Milk Consumption: India's per capita consumption of milk at 97 litres a year is way below that of western countries like the US, which boasts per capita consumption of 285 litres per year, or the EU, which consumes 281 litres per capita per year. But while Indian per capita demand is going up 4.5 per cent year-on-year.
Value Added Products: The second reason is that the Indian consumer - especially the affluent urban consumer - is consuming more value-added products, which bring in bigger profits for dairy companies than raw milk.
Where in Ice Cream Industry in India has grown from 800 crores in 2005 to 2500 crores in 2015 resulting a 30% CAGR growth, where AMUL has 30% Market share. This is big opportunity to cash in for a established leader.
Export: This is one area where brand can cash in based on its procurement network and tap global markets for VAP’s.
Threats to AMUL:
Increasing competition: Many players, local and international, are entering the ice cream and VAP’s market thereby taking away share of wallet from Amul. Kwality Walls, Naturals, London dairy, Arun ice cream, Vadilal, Ramani, are some of the few brands who are directly in competition with Amul. Latest being entrance of Lotte into Ice Cream market by acquiring Havmor for a whopping Rs 1000+ crores.