💎The Butterly Delightful Story of Amul's Success

Recently, adman Sylvester da Cunha, the creative mastermind behind the iconic Amul Butter Girl, breathed his last.

His simple yet powerful designs resonated with India's heartland, making the Amul Girl a symbol of India's post-independence economic progress and cultural integration.

Today, as we pay tribute to da Cunha's contribution, we will explore the growth story of Amul.

This cooperative model has revolutionised India's dairy industry and proved to be a successful business model.

Amul's journey - A timeline of growth and expansion

The journey of Amul is a testament to how innovation at the grassroots level and a commitment to farmer empowerment can lead to transformative success.

In 1946, a small cooperative was born from a movement in Anand, Gujarat. This was a protest against the exploitative trade practices of local milk traders, spearheaded by Tribhuvandas Patel.

The cooperative, later named Amul, an acronym for Anand Milk Union Limited, started as a small entity with just two village dairy cooperative societies producing 247 litres of milk.

Dr Verghese Kurien, also known as the "Milkman of India", joined hands with Tribhuvandas Patel in 1950. With his sheer determination and innovative techniques, he brought a white revolution, making India the world's largest milk producer.  

Significant milestones in Amul's journey:

1946: The cooperative movement begins in Gujarat.

1955: Amul establishes its first dairy in Anand, marking the birth of a dairy behemoth.

1965: Introduction of the Amul brand butter.

1970: Pioneers the production of milk powder and baby food from buffalo milk.

1980: Develops India's first sports drink, Stamina.

1994: The brand introduced pizza cheese, expanding its product portfolio.

2000: Enters the ice cream market, quickly capturing a significant market share.

2007: Becomes the largest milk brand in Asia.

2013: Crosses INR 20000 crores turnover mark.

2019: Enters the packaged sweets market.

2021: Launch of vegan and lactose-free products, catering to changing consumer preferences.

2023: Records a turnover of INR 59000 crores, continuing its steady growth.

Over the decades, Amul has diversified into a wide range of dairy products, successfully expanding its presence across India and over 40 countries worldwide. The Amul model has helped India to emerge from being a milk-deficient nation to the world's largest milk producer.

Amul's business models

At its heart, Amul operates on the cooperative model, a system where every stakeholder is a part-owner and shares the benefits. Dairy cooperatives, in general, work on this principle. It involves farmers coming together, pooling resources, and forming a society.

This society then collects milk from individual farmers, processes it, and sells the finished products under a common brand. This model aims to provide economies of scale, reduce inefficiencies and ensure a better price for farmers by eliminating middlemen.  

What sets Amul apart is the unique model it follows. This is a three-tiered structure:

1. Village Dairy Cooperative Society: At the grassroots level, every milk producer in the village is a member of the Village Dairy Cooperative Society. These members elect their representatives who manage the day-to-day activities of the society.

2. District Milk Unions: The representatives from each society collectively manage District Milk Unions. These unions handle the processing, packaging, and selling milk and milk products.

3. State Milk Federation: The processed products are then sold to the State Milk Federation, which acts as the distributor, selling or facilitating the sale of the products in the market.

The revenue gets shared downwards from the state federation to the individual milk producers. This model ensures that the dairy is in control of the villagers themselves, with professionals employed by the district milk unions managing the various links in the supply chain.

The Amul model is efficient and sustainable for several reasons –

• It eliminates intermediaries, ensuring a good quality product at a competitive price.
• It provides a stable income for marginal farmers in lean seasons, as no middlemen can take a chunk of the profits. So even when sales are low, they have a steady income.

This structure has brought immense success, making the Amul model a case study in business schools worldwide.

Amul's growth story

Amul has consistently grown in size and profitability. Amul posted remarkable figures in the 2022-2023 fiscal year, further cementing its status as one of India's most successful dairy cooperatives. It recorded a turnover of INR 59,000 crores, showing a robust growth trajectory.

Amul's Revenue Growth Since 1994

The lion's share of Amul's revenue comes from its vast range of dairy products, with milk contributing significantly. Other key revenue contributors include cheese, butter, ghee, ice cream, and increasingly popular value-added products like flavoured milk, yoghurt, and chocolates.

Amul's expenses primarily revolve around procurement, processing, packaging, distribution, marketing, and employee costs. The cooperative's principle of sharing profits among its members means that much of the revenue is also directed back to the farmers. In 2022, Amul procured milk worth INR 33,150 crores from farmers, reflecting its commitment to enhancing farmer incomes.

The cooperative's profit margins have remained healthy, with profits primarily reinvested in infrastructure development, capacity expansion, and farmer welfare initiatives.

What made Amul so popular?

Amul's journey to becoming India's largest dairy brand isn't just about milk. It's a story interwoven with innovation, savvy marketing, and a steadfast commitment to farmers.

Here are the key factors that contributed to Amul's popularity and growth:

• Dr Verghese Kuriens' innovations: Dr Verghese Kurien, popularly known as the Milkman of India, was instrumental in shaping Amul's growth trajectory. His innovative methods, like introducing milk powder, transformed India's dairy industry and placed Amul on the global map.

• The cooperative model: Amul's cooperative model ensured that the profits percolated to the grassroots, benefiting the farmers directly. This model, unique to Amul, enhanced farmer incomes, increased milk production, and established a successful cooperative farming model.

• Quality products: Amul's wide range of dairy products are synonymous with quality and affordability. The trust that the brand has built over the decades has made it a household name in India.

• Diversified product portfolio: From milk to cheese, butter, ghee, ice creams, and even chocolates, Amul's extensive product portfolio caters to a broad spectrum of consumer needs, contributing to its popularity.

• Strong distribution network: Amul's extensive distribution network, reaching even the remotest corners of India, has played a crucial role in its popularity. Today, Amul products are available in over a million retail outlets across India.

• The Amul Butter Girl: Last, but certainly not least, is the iconic "Amul Butter Girl". Introduced in the 1960s by Sylvester da Cunha, the Amul Butter Girl quickly became a national icon.

The witty, topical ads featuring the cheerful mascot captured the public imagination, making Amul not just a brand but a part of the social and cultural fabric of India. Here are a few of my favourites:

As we fondly remember Sylvester da Cunha and his iconic creation – the Amul Butter Girl – let's also take a moment to appreciate the formidable growth story of Amul.

Amul's journey serves as a reminder that success is not just about numbers. It's about creating a positive impact, empowering communities, and delivering quality, one scoop of butter at a time.

So, whether you're an investor, an entrepreneur, or a consumer, there's much to learn and cherish from Amul's story. And as we look towards the future, there's little doubt that Amul will continue to churn out success stories, one dairy product at a time.