AMUL was established originally as GCMMF ( Gujrat Co-operative Milk Marketing Federation) in 1946. Amul is also a great contributor to the White Revolution, which brought India on the world map as a major producer and exporter of milk.
In 1966, AMUL hired “Sylvester da Cunha” the person who is responsible for the Topical Ads campaign which is still running to date on the billboards and posters. The topical ads campaign means that AMUL goes ahead and makes ads on the most relevant and sometimes controversial topics. The campaign was awarded the Guinness Book of World Reward for being the longest-running ad campaign.
Now that you get the point back to the story that you probably missed. AMUL made a profit of approximately 700 crores when major business houses faced losses, hired more people when major industries were busy laying off people, boosted its Supply chain when many went bankrupt, or cut down their supplies.
Flashback to 24th March 2020, when PM Shri Narendra Modi announced a nationwide lockdown, India was never meant to be the same again. The industries were hit, the normal lives of people shattered, and the country faced a loss of approximately 10 lakh crores. One of the major sectors that were hit was the dairy industry and costed milk producers of India approximately 112.3 crores per day. Even though milk came under the essential food category what hurt the industry was the disrupted supply chain and the shortage of labor.
Milk and milk products are supplied to restaurants, catering and hotel businesses and that contributed to 20% of revenue, so when the lockdown happened they naturally assumed a drop in demand and hence they cut the jobs of their frontline workers and reduced the production capacity of their factories.
What they failed to understand and learn was that whenever a crisis of this scale happens there is a paradigm shift in consumer behavior. What they failed to understand was that even though 20% of their supply was hit, household consumption was going to increase dramatically.
The rise of two trends that are responsible for a drastic rise in household consumption is the #HomeMadeFood trend and #StayHealthy. With the first trend, the consumption of milk and milk products increased due to an increase in household chefs and abundance of time. The second trend discouraged the purchase of loose milk, so the demand for packaged milk increased.
As of May 2020, the demand for cheese surged by 80%, the demand for cottage cheese increased by 40% and the demand for condensed milk skyrocketed to 200%.
All the Amul factories and the rented third parties were working at 115% capacity.
The ad volumes by AMUL of 2020 were increased by 360% as compared to 2019. When Doordarshan planned to launch Mahabharat and Ramayan again, to build on the nostalgic feeling, AMUL launched its old ads during these times.
Amul invested Rs 80 crore in a paid partnership with IBM to build a custom-made Supply Chain Management system. This system will help the management team at Amul to know exactly the capacity at which the plants are operating, where the trucks and other transports are, and will suggest ways to improve the overall structure. The investment was made keeping in mind the scale of the supply chain of AMUL which consists of 18,700 societies, 5,000 Milk Tankers, 200 Chilling stations, 10,000 Distributors, 10,00,000 Retailers, and more than 36,00,000 farmers.
With all the investment and the loss in business, the management team at AMUL had 2 choices ahead of them: either to follow suit with the industry behemoths or to carve a new path for themselves.
They chose the latter, harder and unanticipated path.
During the lockdown, the Ice cream and the frozen foods verticals were almost dysfunct and that meant an opportunity for Amul's Milk division which was overloaded due to the sudden surge in consumer demand. So overnight the burden was distributed among all the functional and dysfunctional factories and with the limited restrictions and non-availability of labor, railways were chosen as a preferred mode of transport for intra-state transfers.
- “Good leaders prepare to face risks, great leaders prepare to embrace risks with open arms.”
- "Resourcefullness will always save you during crisis.”
- “Dont wait for better investment options, invest and then wait for better time.”
AMUL has always done more than is expected from any company, starting with spearheading WHITE REVOLUTION and doing much more during the country's modern-day crisis aka lockdown.
