“ Expansion of Milk cooperative from Local to International Brand”

21 May 2024 “ Expansion of Milk cooperative from Local to International Brand”

This article covers “Daily current affairs” and the topic details of “ Expansion of Milk cooperative from Local to International Brand”. This topic is relevant in the “Economics” section of the UPSC- CSE Exam.

Why in the news?

India’s largest dairy cooperative Amul has started selling fresh milk and other products in the United States in partnership with a Michigan Milk Producers Association (MMPA, a century old local cooperative body) to sell fresh milk in East Coast and the Midwest markets.

More in the news:

• The Gujarat Cooperative Milk Marketing Federation (GCMMF), an umbrella body of district-level milk cooperatives in Gujarat, markets and sells dairy products under the brand Amul.

• Amul will handle the marketing and branding of fresh milk products in the joint venture, while  milk procurement and processing will be done by the  Michigan Milk Producers Association(MMPA)

• GCMMF has expanded its market reach by exporting a diverse range of Amul products, such as paneer, cheese, ice creams, chocolates, and various other dairy items, to over 50 countries worldwide. These products are particularly popular among the Indian diaspora communities in regions like West Asia and Africa, where they cater to the tastes and preferences of diverse consumer groups.

History of the success of Amul Cooperative :

It has been a result of its innovative business model, strong leadership, and focus on quality products rather than any instances of plagiarism. Amul has built its success on principles of cooperation, empowering farmers, and delivering value to consumers. 

Their growth has been marked by several key factors:

• Cooperative Model: Amul operates as a cooperative society owned and governed by the farmers themselves. This model ensures that the benefits of the business are shared among its members, fostering a sense of ownership and commitment to the cooperative’s success.

• Quality Products: Amul is renowned for its high-quality dairy products, including milk, butter, cheese, and ice cream and commitment to quality has helped them build a strong brand reputation over the years.

• Marketing Innovations: Amul has pioneered innovative marketing strategies, notably through its iconic “Amul girl” advertisements. These ads, featuring topical and witty commentary on current events, have helped Amul stay relevant and connect with consumers across generations.

• Expansion and Diversification: Over the years, Amul has expanded its product range and diversified into new markets, both domestically and internationally. This strategic approach to growth has enabled the cooperative to capitalise on emerging opportunities and strengthen its market position.

How Indian Milk Cooperative Develops into an International Brand :

The history of Indian milk cooperatives, particularly exemplified by the Amul Cooperative, is a remarkable tale of grassroots empowerment, innovative leadership, and socioeconomic transformation.

• Formation of Amul: The story of Indian milk cooperatives begins with the establishment of the Kaira District Cooperative Milk Producers’ Union Limited (Amul) in 1946 in Gujarat, India. It was founded by visionary leaders like Tribhuvandas Patel and Verghese Kurien, who aimed to empower local dairy farmers and improve their livelihoods.

• White Revolution: The launch of the Operation Flood program in 1970, also known as the White Revolution,  witnessed a significant turning point in the history of Indian milk cooperatives. This initiative, led by Dr Verghese Kurien, aimed to replicate the success of Amul’s cooperative model across India by organising small-scale dairy farmers into cooperatives, establishing milk collection centres, and modernising dairy processing facilities.

• Expansion and Replication: Through Operation Flood and subsequent initiatives, the network of milk cooperatives expanded rapidly across India. State-level cooperative federations, such as the Gujarat Cooperative Milk Marketing Federation (GCMMF), were established to coordinate the activities of local dairy cooperatives and facilitate the marketing and distribution of dairy products.
• Impact on Rural Economy: By providing farmers with access to fair prices, technical support, and marketing infrastructure, cooperatives have helped alleviate poverty, generate employment, and stimulate economic development in rural communities.
• Technological Innovations: Indian milk cooperatives have embraced technological innovations to enhance milk production, quality, and processing efficiency. This includes the adoption of modern dairy farming practices, mechanisation of milk collection and processing operations, and the introduction of quality control measures.
• Brand Building and Marketing: Amul, in particular, is renowned for its iconic advertising campaigns featuring the “Amul girl” and catchy slogans. These marketing initiatives have helped build brand recognition and consumer loyalty for Indian dairy products both domestically and internationally.
• Global Recognition: Indian milk cooperatives, particularly Amul, have gained recognition on the global stage for their success in transforming the dairy industry and empowering farmers. Amul’s cooperative model has been studied and replicated in other countries facing similar challenges in dairy farming and rural development.

The history of Indian milk cooperatives is a testament to the power of collective action, community empowerment, and sustainable development. It’s a narrative that’s entirely original and represents a uniquely Indian approach to addressing the challenges of agriculture and rural poverty.

Expansion of the Amul towards the international market:

• Market Research: Before entering any international market, Amul go through market research and analysis to understand consumer preferences, competition, and regulatory requirements. This ensures that their products are tailored to meet the specific needs of each market.

• Adaptation: Amul adapts its products and marketing strategies to suit the cultural and dietary preferences of each international market. For example, they may modify product formulations or packaging according to local tastes and preferences.

• Distribution Channels: Amul strategically builds robust distribution channels in global markets, frequently collaborating with indigenous distributors or retailers to guarantee the extensive accessibility of its product range.

• Brand Building: Amul focuses on building its brand presence in international markets through strategic marketing initiatives, including advertising campaigns, sponsorships, and partnerships with local influencers or organisations.

• Compliance: Amul complies with all relevant laws and regulations in the particular countries where it operates, including food safety standards, labelling requirements, and import/export regulations.

Significance of Amul presence in the international market : 

• Cultural Connection: Amul products serve as a cultural bridge, offering a taste of home to the Indian diaspora spread across more than 50 countries. This connection to familiar flavours and traditions helps maintain cultural ties and fosters a sense of belonging among expatriate communities.
• Economic Impact: Amul’s international presence contributes significantly to India’s economy by generating export revenue and creating employment opportunities within the country. Expanding into new markets enhances India’s trade relations and strengthens its position in the global dairy industry.

• Global Learning and Growth: Engaging in international trade exposes Amul to new technologies, best practices, and market trends in different regions. This cross-cultural exchange fosters learning and innovation within the organisation, enabling continuous improvement and sustainable growth in domestic and international markets.

• Targeting the diaspora: The primary targets are the Indian diaspora and Asian communities, but eventually, options will also be explored to go to other markets beyond the U.S.

In essence, Amul’s presence in the international market strengthens its position as a global leader in dairy products and contributes to India’s socio-economic development while promoting cultural exchange and mutual understanding at a worldwide level.

Download Yojna daily current affairs eng med 21th May 2024

Prelims based Question:

Q. Consider the following statements:

1. Dairy cooperatives typically operate under a centralised structure, with decisions made solely by top management.
2. India is the biggest country in terms of milk productivity.

Which of the following statements is /are correct?

1. 1 Only
2. 2 Only
3. Both 1 and 2
4. Neither 1 nor 2

ANSWER: D

Mains based Question:

1. Discuss India`s milk cooperative model, especially Amul, which can be replicated in the agriculture sector to double farmer`s income.

Vishal Yadav