Republic Business India Economic Summit | Image:Republic World
In a keynote speech at Republic Business’s India Economic Summit 2023, Jayen Mehta, Managing Director, Amul, revealed the cooperative’s plan to expand its operations globally to become the ‘dairy of the world.’
With over 70 per cent of India’s population residing in villages, Amul’s cooperative model, owned by 3.6 million farmers, has become a beacon of empowerment and innovation. The brand, which began 77 years ago, still operates with the mindset of a startup, underlining the power of cooperatives in transforming India into a global superpower.
“Amul’s reach extends to 18,565 villages, with 98 dairy plants across India. It’s not just India’s largest exporter of dairy products but is also recognised as the second-strongest food brand in the world. In the last year alone, Amul’s sales soared to Rs 72,000 crore, with the cooperative societies handling over 3 lakh litres of milk daily, amounting to 3 billion litres annually,” Mehta shared.
Talking about the women empowerment values that drive Amul, Mehta said, “We are living by this purpose – this is what we do day in and day out. Amul’s success is built on five pillars: empowerment of farmers, production, process, technology, and women empowerment. Remarkably, 70 per cent of the earnings go back to women in rural areas, making it a model that connects consumers directly with producers.”
The cooperative started in Gujarat and has now expanded worldwide, handling 10 lakh crore litres of milk, the highest ratio anywhere on the globe. “The benefit of farmers is at the heart of everything we do – we have become the icon of women empowerment,” Mehta stated.
Mehta reveals Amul’s strategy which involves buying raw materials at high prices and selling products at the lowest possible prices, operating on thin margins but on a large scale. This approach ensures quality and affordability for consumers while maintaining profitability for farmers.
Innovation remains a key focus for Amul. The cooperative has ventured into producing high-protein products, including India’s first lactose-free whey protein content. They’ve managed to convert 30 lakh litres of Chaas into probiotics without increasing costs and even outpaced chocolate sales with their mithai (sweets) during Diwali.
Amul’s branding strategy is unique. With less than 1 per cent of their budget allocated to branding, compared to the 5-7 per cent norm in the industry, they focus on creating content that resonates with customers. This includes the production of ‘Manthan’, a story of Amul, funded by farmers donating Rs 2 each.
Mehta also outlined Amul’s efforts towards sustainability with systems in place for collecting dung to produce methane for household use and enriching the soil with slurry.
Mehta concluded, “Amul is not just a dairy company; it’s an energy company.” With its robust model of empowerment, innovation, and sustainability, Amul is set to continue its journey as a leading global dairy player.
