The Indian Cheese Industry: Gujarat Cooperative Milk Marketing Federation (GCMMF)

Company profile

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Amul is the leading brand name for products produced and marketed by the Gujarat Cooperative Milk Marketing Federation (GCMMF). GCMMF is an apex body of milk co-operatives in Gujarat and heralded the 'white revolution' in India, that turned the country from having a milk-deficit to the largest milk producer in the world. GCMMF also markets milk powder and dairy whiteners under the Amulya and Sagar brand names.

Amul is the oldest and the most established dairy brand in the country, with its first product, Amul butter, being marketed since 1946. Today, the company has its roots deep in the dairy market and is increasingly focusing on the value added segment that includes health drinks, cheese and dairy based desserts.

Turnover in 2005-2006 was US$ 850 million with a year-on-year growth of 29%.

Cheese Perspective

Amul brands and markets itself as the largest vegetarian cheese producer in the world since all its cheese varieties are made from microbial rather than animal rennet. This immediately makes the brand's' cheese products favourable in a country with the most vegetarians in the world. Also, it sources its cheese form buffalo milk, which is popular in India.

Table 2: Cheese Products by Amul

GCMMF has a wide range of products in the processed cheese segment. It has also been a pioneer in the specialty cheese market in the country. Its cheese business grew at 18% in 2005-2006. GCMMF exports cheese to the tune of 600 tons, making it the largest cheese exporter in the country. The export market includes the Middle East, Singapore, Hong Kong, and the United States of America; countries that have a large Indian population, and the neighbouring countries of Sri Lanka, Bhutan and Nepal.

A very rewarding strategy for Amul has been to also enter the cheese dependent food product category. It produces over 300,000 frozen pizzas (using mozzarella cheese), priced at a mere Rs 30 a piece. This has provided strong competition to international brands in the market that traditionally only sell pizzas at their retail outlets and at much higher prices.

Table 3: Other Products by Amul

Strategy
As its product lists, GCMMF has capitalized on the value added segment with a wide range of Amul cheeses. The Amul brand represents 'value for money' to the Indian consumer and its cheese portfolio is competitively priced and of assured quality. The company has been aggressively marketing its cheese products, to the extent of even moving away from its umbrella brand strategy and introducing a new mascot, the Amul Cheese Boy. When low cost pizzas were introduced, GCMMF adopted an innovative and successful strategy of increasing sales of an elitist product (cheese) by reducing the price of another elitist product (pizzas). Especially since 2005, the company has focused on expanding its already strong distribution network to smaller cities as cheese demand has rapidly expanded beyond the large metros.

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