In a strategic move aimed at grabbing a larger share of the growing demand for milk in the country, Amul's parent Gujarat Cooperative Milk Marketing Federation (GCMMF) has, for the first time, gone beyond its Gujarat boundary and procured milk from other states as well.
Over the last six months, GCMMF, which is the largest distributor of milk in the country, has procured 7-8% of its milk from states like Maharashtra, West Bengal, Bihar, Haryana and Rajasthan. "We would like to bring farmers from other states into our fold. Earlier, we used to cater to the demand of the entire country from Gujarat alone. Now we feel the need to procure milk from other state cooperatives too. Demand is growing rapidly and we want to tap into this growth," R S Sodhi, managing director, GCMMF told TOI.
Out of the total average of 93 lakh litre of milk procured daily, GCMMF sells 34 lakh litre outside Gujarat. Earlier, most of it was procured from Gujarat through its 30-lakh producer network. GCMMF pays around Rs 400 per kg to farmers for milk. Considering the heat from competition and newer regional players entering the field, Amul feels it would be in the best interest of the cooperative to tap into farmers from other states through the cooperative structure. As a result, it also gains from reduced transportation costs.
Sodhi said the cooperative is witnessing a 20% growth in liquid milk annually. The growing demand, despite the fact that milk prices had gone up a couple of times during the last one year, is because of improved household incomes. "There is growing prosperity even in smaller towns. This is why we have decided to expand into 3,000 more towns to increase the reach of non-milk products like milk powder, butter, cheese, ice cream and butter milk over the next 6-7 months. When there is rise in income of a household, the first category which they spend more on is foods," said Sodhi.
The cooperative has set a target of hiring 200 super stockists in those 3,000 towns to expand its reach. By expanding its rural reach, GCMMF expects to clock a 20% growth in non-milk categories which have an annual turnover of Rs 5,500 crore. GCMMF is targeting a turnover of about Rs 10,000 crore in the current financial year.