The opportunity for the Indian dairy sector is very large and I am very sure in the years to come whatever targets that we have got, it will be easily achievable for a simple reason that the brand Amul has achieved a size and a scale and more importantly the trust of the consumers and what we say the taste of India,” says Jayen Mehta, MD, Amul.
Mr Sodhi handed down the baton to you and you are now the new MD of Amul. What are the challenges that you were to take head on from here and being the MD, what does Jayen Mehta intend to do with Amul going forward?
Well, the job I have been handed over is quite challenging but also as much as interesting for a simple reason that the cooperative model is very-very strong. You talked about the three tiers, the village farmers in a village associate into a village cooperative society. All villages of a district form a district cooperative milk processing union, a dairy plant and the marketing is done by the state marketing federation which I represent.
The specialisation of task is there assigned, the job of procurement of milk at the villages, processing at the district union and marketing at federation which takes care of 3.6 million farmers with 98 dairy plants for 18 district unions and the brand turnover of more than 50 products, 1000 plus SKUs that is marketed by the federation.
The opportunity for the Indian dairy sector is very large and I am very sure in the years to come whatever targets that we have got, it will be easily achievable for a simple reason that the brand Amul has achieved a size and a scale and more importantly the trust of the consumers and what we say the taste of India.
Actually we have an opportunity to metamorphosize or evolve from just the dairy business to everything that you consume in your kitchen.
There is a lot of things to unpack here of the answer you just gave as well, right. First is talking of the target Amul intends to increase their target to almost a lakh crore by 2025-2026. So, as far as Amul is concerned and the target is concerned, how are you planning to take this forward, this one lakh crore mark by 2025?
It is a number which is very large and also a challenging number, but we have broken it down systematically by understanding what is the kind of growth n milk procurement that we are going to have. Also, we are examining the kind of products portfolio to add a billion dollar category every year to achieve this growth.
Our entry into the protein space is a very-very huge thing with the introduction of high protein lassi, high protein buttermilk, a variety of high protein products including chocolate, two high protein yogurt, high protein water, high protein milkshakes, high protein milk and snacks and so and so forth.
The other category which we have been very bullish about is probiotics and you would be happy to note that we have the entire range of buttermilk available in India at a price point of just about Rs 30 a litre.
The next space which we are very bullish on and are working very hard to connect the farmers to the consumers is organics. We already launched about 8 to 10 different categories in organics, the processing facility for organic atta, the wheat flour is right now here in this same campus, two organic pulses, organic rice and we are soon getting into organic spices, organic sugar, jaggery and so on.
So every single item which you consume in your kitchen will be an Amul organic product very soon in the next 6 to 12 months. So we are expanding in every single category, we are setting up a new dairy plant under Amul Fed at Rajkot which will process two million litres of milk a day.
Almost eight million litres expansion on the current base of about 42 million litres is already underway which will take care of our anticipated growth in the next five years and that is why we are very confident that as a team of 3.6 million farmers, 18 district unions, 15000 distributors, a million plus retail outlets and a billion customers in India we should be very-very comfortably achieving the target that we have set for ourselves in the next few years.
What kind of investments are we looking at and from 98 factories, how much are we going to scale from here?
Let me start with the chocolate plant first. The fun fact is honourable prime minister inaugurated this new facility way back in 2018. We took a leap of faith, we expanded the chocolate capacity five times and despite COVID and all the uncertainties in the market, last year this plant started running at 100% capacity within the shortest possible time and we are doubling up capacities here. Having said that, the expansion is a very-very important part of our business because that is what leads to the growth in future. Overall expansion in this business is about Rs 3000 to Rs 4000 crores every year for the next five years.
Which will include?
Every single dairy product which I just mentioned and the new product categories that we have. What you saw about the Amul Foodland and Amul Green are our concepts in the pilots. The future also lies in selling foods directly to the customer. So, this is where we are learning to make range of products which are of Amul quality with the best Amul ingredients and obviously the purest taste.
Once we are standardising recipes, we have already set up Amul Foodland parlours in Ahmedabad, we have set up in Kevadia and we are going to scale up across the country. I mean Amazon in India would have perhaps one warehouse in every state. We have 82 warehouses across the country. So, 82 ambient, 82 chilled, 82 frozen and 98 dairy plants. So, these are the future distribution centres for Amul.
By 2025-26 from 98 will we see the factories going up, the numbers going up?
What is your target?
Yes. We are working at expansion in setting up of this. We will have close to 110 to 112 different plants. Amul obviously is one of the finest distribution houses in the country and we want to build on to this particular strength and capability.
