Can Amul BEAT India’s Protein Mafia? ₹16,000 Crore Disruption

Summary

Amul, India's beloved milk brand, is making a bold move into the protein market, aiming to disrupt the 16,000 CR sector. By leveraging its unique cooperative business model and vast distribution network, Amul plans to offer high-quality protein products at competitive prices. Targeting a diverse age range, Amul is focusing on user-friendly products that fit seamlessly into daily habits. With an innovative direct-to-consumer (DTC) approach and an understanding of customer behavior, Amul is positioning itself to be a leader in the protein market, offering both convenience and affordability.

Takeaways

• 😀 Amul is aiming to disrupt India's 16,000 CR protein market by introducing over 10 protein products and achieving significant revenue growth.
• 😀 Amul operates on a cooperative business model, where farmers are both suppliers and business owners, leading to a strong foundation for growth.
• 😀 The primary goal for Amul is to address India's protein deficiency crisis, with 73% of the population being protein deficient.
• 😀 Amul’s protein offerings are competitively priced, with their whey protein costing as low as 2.67 rupees per gram of protein.
• 😀 Amul's core mission includes uplifting farmers and providing high-quality products to the entire nation while staying profitable.
• 😀 Amul’s vertical integration allows it to control the production of whey protein, benefiting from its status as the largest producer of cheese and paneer in India.
• 😀 Despite launching whey protein products earlier in 2009, Amul’s current strategy targets final consumers with processed protein products, focusing on customer accessibility.
• 😀 Amul is targeting a wide range of consumers, not just the younger generation, by appealing to people aged 30-50 years who have been largely underserved by competitors.
• 😀 Amul’s unique approach includes offering protein in everyday products like lassi and milk to seamlessly integrate protein intake into the consumer’s daily habits.
• 😀 For the first time, Amul is focusing on direct-to-consumer (DTC) sales via its website and e-commerce platforms, enabling better data collection and consumer insights.
• 😀 Amul plans to expand its retail network after the DTC strategy reaches its potential, leveraging its massive distribution network of over 1 million retail stores.

Q & A

Why is Amul entering the protein market?

Amul is entering the protein market to address India's protein deficiency and to find new hero products in categories beyond dairy. They want to tap into a growing market and diversify their revenue streams beyond milk products.

How does Amul's cooperative business model work?

Amul operates on a cooperative structure where farmers not only supply milk but also have ownership in the business. This model includes 36 million farmers who form cooperatives, which then create unions that work under a federation called GCMMF for distribution and selling.

What is Amul's goal with its protein products?

Amul aims to solve India’s protein crisis by offering high-quality, affordable protein products. They are focusing on providing solutions to the 73% of the Indian population that is protein deficient.

How competitive are Amul's protein products in the market?

Amul offers highly competitive prices for its protein products, including whey protein. For example, the per gram protein cost for their whey protein is among the lowest in the industry at around 2.67 rupees.

Why is protein consumption an important issue in India?

Protein consumption in India is lower than the global average, with a significant 73% of the population being protein deficient. Amul is targeting this gap, as the average protein consumption per kilogram of body weight is much lower in India compared to countries like China, the US, and Canada.

What sets Amul's approach to protein apart from other companies?

Amul targets a broader customer base, not just young adults. Their strategy focuses on making protein products accessible and easy to incorporate into daily habits, targeting people aged 30 to 50 who are typically underserved by other protein brands.

How does Amul plan to make protein consumption easier for customers?

Amul aims to make protein consumption more convenient by introducing products like protein milk and protein lassi in ready-to-consume formats. This approach eliminates the need for extra preparation, unlike typical protein powders that require mixing and shaking.

What is Amul's strategy for retaining customers in the protein market?

Amul's strategy involves selling protein milk and lassi in packs of 30, encouraging customers to develop a regular habit of consuming the products. This creates a consistent customer base as the products become part of their daily routine.

Why is Amul selling protein products primarily through DTC (direct-to-consumer) channels?

Amul is using a direct-to-consumer model to better educate and engage customers before these products reach retail stores. This allows them to control the customer experience, ensuring that buyers understand the product and its benefits.

How does Amul's vast distribution network help in their protein market expansion?

Amul benefits from its large distribution network, including over 400 warehouses and a network of more than 10 lakh retailers. This infrastructure allows Amul to efficiently scale its protein products across India once the direct-to-consumer strategy matures.