Dr R S Sodhi, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), which is commonly known as Amul in India, was the keynote speaker at the 5th ICETT Meeting held on 12 January 2021.
He shared practical examples of Amul’s approach to how cooperatives leverage their identity to reinforce competitiveness while developing robust business strategies and marketing their products and services. Amul’s key success factors include providing affordable nutritious products to all people in the community, regardless of their social classes, employment with dignity, sustainable incomes, women empowerment, and a model for developing countries. “Our value chain is controlled by farmers - who are the owners, and farmers also get the maximum percentage of consumers' money and remunerative prices”, says Dr R S Sodhi. On the other hand, consumers receive value for their money as they get quality and affordable products. Amul has focused on building a strong brand for their dairy cooperatives and has capitalised on technological and marketing innovations.
GCMMF is India’s largest food products organisation and the 8th largest dairy processor globally, with a capacity of 38 million litres per day.
It collects over 29 million litres of milk daily from 3.6 million farmers from 18,562 villages in Gujarat and has a turnover of more than US 7 billion with an annual growth of 15%.
Their milk procurement increases by 138% every year, and Amul ensures that they buy up to the last drop of milk, processes it, and sells it. As the production increases, the price paid to the farmers exponentially increases as well. “What makes us thrive in this industry compared to other business models is that the profit we make goes back to the farmers and they meet farmers' and consumers' needs by offering quality services and products and in return they earn more”, reminded Dr. R S Sodhi.
Therefore, unlike the private investors, their competitive advantage is to serve the interest of their 3.6 million milk producers (owners), giving them a very stable and valuable pay by buying milk at the maximum price. They also provide consumers with value for their money by producing very quality products using natural ingredients, utilising the latest technology in the world for processing and packaging, and selling their products at very affordable prices. Their basic model is to give more to the suppliers, consumers, and other stakeholders in their supply chains to enable them to earn more.
GCMMF ranked second in the 2020 edition of the World Cooperative Monitor (WCM) report under two categories: in the top 300 largest cooperatives based on the turnover/GDP per capita and under the top 10 agriculture and food industries category. It also ranked 106th under the Top 300 largest cooperatives and mutual organisations by turnover in US Dollars category.
ICETT
The International Cooperative Entrepreneurship Think Tank (ICETT) was formed in 2018 by the ICA to strengthen cooperatives' entrepreneurial performance by seeking and using innovative ideas, research, education, and cooperation to address the challenges that cooperative enterprises are facing. Read more about ICETT.
For more information or questions, kindly contact us at ICETT(at)ica.coop
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