LEADING IN UNCERTAIN TIMES – 5

Part 2 of 2 by Mohan G. Joshi

Amul: the winsome taste of proactivity, perseverance

When the Gujarat Co-operative Milk Marketing Federation Limited (GCMMF), the owner of Amul brand, was hit by the corona crisis, they did not stay locked down. In this concluding part of the story, we look at how Amul didn’t just cope but won!

The GCMMF team had been put through crises and lockdowns when the state of Ahmedabad witnessed riots and curfews during the late 1980s and the early 1990s. When the current crisis unfolded in China, the Amul leadership was already watching the situation and gearing up. They were ready nearly 10 days before the lockdown in March.

As Sodhi stated in an interview, “On March 17, we looked at different aspects of our operations like precautions, social distancing, sanitization, invoicing and warehousing, and figured how to have a robust IT backbone to carry out our operations smoothly. Anticipating disruption, we started stocking up products in our 77 warehouses, transporting much more than what we normally would. At the head office, we split the team into two, working in two sets.”

The nimble giant

They successfully reaped the benefits of being a multi-product, multi-location, multi-channel company. “With 84 plants, when things were difficult in Mumbai where our four-five plants got affected, other plants worked overtime. While ice cream as a product was almost finished, paneer consumption went up. While out-of-home consumption was hit, home consumption rose.”

They coped with the increased demand by boosting supplies, procuring about 5 million liters more milk during the lockdown. In about 120 days, they gave about “₹1,800 crore extra cash to our farmers for extra milk we procured.”

There were almost daily conversations with media during the initial days of the lockdown. The core message was the same—no need to panic, you will get your Amul every day.

The Chairman’s speech on July 18, 2020, at the 46th AGM of GCMMF, outlined some more steps the organization had taken to keep up the supply and to connect with its stakeholders.

Communicate, care

Though the authorities allowed their vehicles to ply, restrictions on retail stores (open for just a couple of hours in most places) forced them to complete their entire redistribution operation within a narrow window. They gave a special hardship allowance “to incentivize our supply chain partners, transporters, sales team, contractual workers at factories, warehouses and in market.” Special arrangements were made “for their safety and comfort including arrangements for food and refreshments along with sanitization facilities.”

As most customers were confined at home, they remodeled their last mile supply chain strategies almost overnight, partnering with online food delivery and e-commerce platforms. They booked orders from residential societies and supplied their products directly to housing colonies. The new Amul Cart app enabled retailers to place online orders directly with distributors.

Mining silver from the dark cloud

As commercial consumption had plummeted to near-zero, they redesigned their marketing campaigns to educate and inform consumers about using their range to try out restaurant-style dishes at home. They invited chefs from across the country to conduct live social media events to demonstrate their special recipes. This also helped them to bond better with the chefs.

As most people were glued to the television or digital devices, Amul stepped up their advertising and media presence. “We also launched ‘Haldi Doodh’ or turmeric latte, our new immunity enhancing milk beverage, and are further augmenting this range by introducing other immunity boosting milk-based beverages such as ‘Tulsi Doodh’ and ‘Ginger Doodh’.”

As the old favorite TV serials such as Ramayan and Mahabharat were re-telecast, Amul rode the huge wave of nostalgia by telecasting Amul advertisements of yesteryears, evoking fond memories. No doubt, this helped Amul to retain top brand recall during the entire lockdown period.

Why did a brand like Amul, already well-known, bother to spend more when the going was tough? Because they were wise not to take anything for granted.

Did well, the numbers tell

During the pandemic, the Amul cooperatives churned the crisis into an opportunity. In all, they procured an additional 3.5 million liters of milk per day, giving around ₹8 billion extra to the rural milk producers. They generated a cumulative remuneration of ₹60 billion for 3.6 million rural families of India, mainly comprising landless laborers and marginal farmers.

Whether or not Amul is “the taste of India,” global business can surely draw strength from the nourishing lessons they offered while handling the crisis.