WAC Analysis

8/20/2019 WAC Analysis

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Company Background

Kurien talked about the power of people and mobilization of people (farmers) with professio

Gujarat Cooperative Milk Marketing Federation (GCMMF), popularl known as !mul

"# #odhi, M$ of GCMMF

%uilt on the dual philosph of value for man and value for mone (farmers and &ustomers)

Origin

$e&ember '* + Kaira farmers formed a milk union in !nand &it (olson ba&kground)

-une '. + started pasteurizing milk for the %omba Milk #&heme

'/' + $r 0erghese Kurien joined the union as its GM

'// + #tarted produ&ing surplus milk, and therefore an investment to pro&ess surplus into mi

'/. + #weetened &ondensed milk

'*1 + %ab food and &heese

2ate '/1s and earl '*1s + entered into distribution &hannels with all parts of 3ndia, in&reas

'* + 2%# visited and 4ational $air $evelopment Fund was set up 56 in !nand to set up

#upport servi&es as well 888 3n&reased per &apita suppl of milk 888 3ndia from defi&

3n&reased in&omes of families and so&ial &hanges

Three tier Cooperative Structure


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!ll the above bodies retained a part of earnings to meet e9penses and rest passed on to farme

$emo&rati& ele&tion pro&ess

2020 Targets

Milk produ&tion in 3ndia :11 M; pa

C!G" for n9t / ears (:1'+:1) :1<

Milk pro&urement for ne9t / ears (:1'+:1) ':<

Milk pro&essing fa&ilit for ne9t / ears (:1'+:1)

:1' 4ew milk powder plant alanpur

4ew dair plant "ohtak

:1' 4ew butter plant Gandhinagar

4ew dair plants Faridabad, Kanpur, 2u&kn

4ew mega &heese plamt alanpur

4ew dair plants !mreli, Kut&h and #urend

Capa&it e9pansion %havnagar

Cooperative Development Programme

' =nion help (te&hni&al, managerial and marketing support): $edi&ated initiative to imporve animal health servi&e

> 3nternal Consultant $evelopment

#trategi& rodu&tivit ?nhan&ement

/ ?ntrepreneurship $evelopment rogramme

* Clean Milk rodu&tion

@ #ustainable e&ologi&al development


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al management

lk powder, butter and ghee

e &attle ield, farmer training, vet servi&es

&ooperatives in various parts of the &ountr (7peration Flood)

en& to self suffi&ien&


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s

/1,111 &r

'/*D'@ :@1 lakh litres per da

:>@ >.1 lakh litres per da

':1 M; dail 2argest milk powder plant till date

#erve markets of $elhi and 4C"E started operating

1 M; dail

w, Kolkata %eing built

4ear &ompletion $oubling &heese manufa&turing at e9i

anagar #oon operational

#aurashtra, Kut&h, orbandar and %otad Milk =nion

2eadership and vision relatedE Mahila related

Geneti&s, Calf rearing, Fertilit 3mprovement, e+animal portal

3n&rease in&ome and redu&e operational &osts

3nfrastru&ture, ma&hines and training

#aplings


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nal Centre for $isease Control) Man support staff

3ndian "ailwas

0alue Chain

;raining) Consumers patronage

of $air #&ien&e Member union

t #ervi&e, !nand Federation offi&ers and staff

"elevan&e to farmers and few major stru&tural &hanges


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10N!

itng D"#$%

P&"NTS


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Product $ange

rodu&ed * tpes of dair based produ&ts in :1'> :* new prod

3ndias largest e9porter of dair produ&ts, targeting 3ndian des&ent

Categor ;pe of Categor

' %read #preads

: Milk $rinks

> owdered Milk

Fresh milk

/ Cheese

* Cooking rodu&ts

@ $esserts

. 5ealth $rinks

'ro(th

#hare of %randed 7rganized #egment

'/* %utter .*< d

'/* Ghee >1< b

'*: Cheese */< h

'*. 3nfant Milk Food /1< h

'.@ $air Hhitener 1< f

'.@ Fresh ou&hed Milk 1< a

'* Condensed Milk *1< e

'@ aneer 1< g

' 2ong 2ife Milk *1< a' oghurt /< &

:11: Cream 1< h

:11: Flavored Milk @1< a

:11> 2assi 1< a

:11/ %uttermilk @1< a

Market leader in all produ&ts e9&ept &ho&olates and additives

Created new produ&ts su&h as &ottage &heese and frozen pizzas from s&rat&h

Milk #tarted own brand post end of %M#E value added produ&ts more profitable and so branded li

#uppl &hain to ensure distribution of milk wIo spoilage + both mornings and afternoonsD :1'

7nl national brand in milk

'1s + after resear&h 88 i&e &ream 88 made of milk unlike vegetable fat (=2) 88 pri&ed &o

Hith i&e &ream, also added frozen pizzas and oghurts added to the portfolio


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:1'+'/ erforman&e

!mul 2ong life milk ><

!mul #lim n ;rim milk !ugment growth

!mul 2ong life &ream :/<

!mul Hhipping &ream !&&elerated

!mul beverages (in ?;) >><

Fresh Milk :.< 2aun&h in 5derabad and

!mul Cheese :.< 2aun&h of new flavours

!mul Mithai Mate :<

!mul i&e&ream :@< Maintained leadership pos


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&ts in :1'+'/

3ndian $air Market rodu&t #egmentation

a *<

b :@D/1<

& @<

d *D/1<

e *D/1<

f >D/1<

g :<

h '<

'11<

uid milk other than value added produ&ts

+ >1 3ndian &ities and milk was /1< of revenues

petitivel and soon be&ame leading plaer (>< in :1'>) (h)


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unjab

tionE laun&hed ?3C and CrJme "i&h


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3ndias largest food produ&t marketing organization (4estle ne9t)D :1< growth for the past /

3&oni& butter advertising &ampaign laun&hed in '*1s believed to be the worlds longest runn

Brand Building

Milk had a &aptive &on&umer in %M# 88 found it diffi&ult to &ompete in segments su&h as o

ress #ndi&ate ad agen& gave the butter a tagline #impl the %est

'** + !&&ount to !# to dislodge olson 88 =tterl %utterl $eli&ious 88 Mas&ot !mul gir

Centred outdoor &ampaign around !mul girl 88 'st set of billboards in %ombai in '** 88 2

!sso&iated with &urrent events 88 b :1'>, 111 su&h billboards

Challenges

Conne&ting with outh + so sponsorship in man sports events


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ears

ng outdoor advertising &ampaign

lson (butter) 88 '/@ + 4ame !mul (amula, swadeshi)

d billboards in prime lo&ations 88 * months later olson faded awa


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Procurement

7wned b >D: million farmers in :1'> + $ail ':D. mn litres + dair pro&essing units + '@

./< produ&ers small and marginal

'/1 mn milk produ&ers in :1'/

'@1 :1'/

er &apita milk availabilit (gm I da) ''1 >'/

ro&urement limited to Gujarat in :1'> 88 problem of &ompeting with lo&al plaers

:1'1 + started pro&uring from Hest %engal, Maharashta and "ajasthan, but legal hassles 88 a

outh relu&tant to join 88 tedious work 88 make them entrepreneurs with large farms &an be

:1'+'/

;otal milk pro&urement '/D: mn kg ':D@< pa growth

ro&urement from @ states outside Gujarat 88 :1< additional Buantit of milk available

Distri)ution

! million retailers a&ross >,111 3ndian towns and '1,111 dealers@,111 e9&lusive fran&hised outlets (lo&ation)

2argest retail &hain in the &ountr (b number of stores)

$edi&ated i&e &ream parlours and was e9perimenting with &asual dining restaurants

distin&t distribution &hannels + fresh, frozen, &hilled and ambient

Continued e9apnding its produ&ts to rural &ustomer (pa&kaging usage)

Hith F$3 in retail + will ask for a higher margin

?9isting Halmart and Carrefour

Fresh /< >1<Chilled and 2ong life ':< >1<

Frozen ::< >1<

:1'+'/

#everal new bran&hes at -odhpur, Mangalore and Gwalior (now /* bran&hes)

#trengthened rural distribution rea&h )'@ super sto&kists &overing >:11 interior markets)


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$istributor Management #stem (3; better &ontrol over #uppl Chain) and !mul atra rogr


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istri&t member unions

L in&reased nutrition

lso problem of farmers in those states

one of the solutions

*/< growth over last / ears %e&ause of pri&ing to farmers having in


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mme (better awareness among business asso&iates) L #! implementation L C:C (Cow : C


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reased @/< during the last / ears 88 also to attra&t ne9t generation


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nsumer) integrated value &hain


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#ales of =#$ :D/bn in :1'>

:1< growth for the past / ears

!mul .1<

7ther 3ndian dairies @1<

Hestern &ountries >/+1<

:1'+'/

#ales / ears C!G" :'< :1@>> &r leveraging on

o growth 'D>1


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te&hnologi&al and marketing innovations

dedi&ation and hardwork of farmers

higher milk pro&urement

value &hain innovations 88 seamless integration through 3;

marketing effi&a&

e9pansion of distribution rea&h


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Competitors

3nfant milk, dair whiteners, &ho&olates and i&e &ream M4Cs su&h

%everages Global bever

ou&hed milk 2o&al &ooper

rivate dairies, parti&ulal in #outh 3ndia

M4Cs 88 urban &ustomers 88 premium produ&ts 88 higher margins to retailers

Pricing

0alue added produ&ts 2ower than &ompetitors !mul pri&es

Fresh milk #light premium

!mul wanted to sta premium even b providing &ompetitive pri&ing

"dvertising

2ess than &ompetitors through innovation + '< 88 1+/1< of this umbrella based pri&ing

2onger &ampaigns

%est spots but no freebies

!ds and sponsorships refle&ted 3ndian values and roots

Supply Chain=sed volume as advantage 88 ?9&lusive arrangements 88 2ow margins to distributors 88 2o

ro&urement also an advantage be&ause of higher paouts

*anagement

=nlike some &ooperatives in other states + free of politi&al interferen&e

0er transparent

oliti&ians ma however see the farmers as a sour&e of vote bank


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s 4estle, Kradt, 5=2 and 3ndian firms su&h as %ritannia

age giants su&h as Coke and epsi

atives and private dairies

erved as ben&hmark as value for moneD ;rust of &onsumers

w pri&es (4estle withdrew from butter be&ause low volume so not profitable for distributors)


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#ndian Dairy #ndustry

:1'> + 3ndia largest milk produ&ing and &onsuming nation #ame in :1'

1 mn families and 11 mn individuals involved in dair farming (se&ondar sour&e of in&

3ndia .:< having N : he&tares of land

Hestern &ountries su&h as =# and 4O

'11< /1< #elf &onsumption

/1< $istribution .1< =norganized milkmen

:1< 7rganized se&tor

$air market in :1'> (org and unorg) P@D* bn

Growth in re&ent ears @D/< pa

!vg 3ndian household bill :1+:/<

Composition of liBuid milk of milk produ&ts /<

Consumption was in&reasing be&ause of 3n&reasing C

Growing population

Hinter produ&tion was higher than summer + how demand suppl balan&e was maintained

2itres per animal per da 3ndia Globall

otential for in&reasing ield of animals > >1

1++ mn producer cooperative unions 888 '>>,111 village level dair &ooperatives 888 '


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E also one of the fastest growing

me) + managed b household women

#mall farmers owning an average of : &attle

2arge me&hanized farms of :,111+/,111 &attle were &ommon

//< ro&ured b private dairies, in&luding large M4Cs

/< Co+operatives

:1'/ P*/ bn 2argest agro &rop in 3ndia

:1'/ Milk produ&tion growing at D/< pa

4$ (outla of '.,111 &r) b G73 to improve the ield of mil&h animals

n farmers


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ow pri&es 88 seeking to dump

Documents

WAC Analysis