In his keynote speech at the 9th Speciality Films & Flexible Packaging Global Summit 2022, RS Sodhi, managing director, GCMMF (Amul), said, “Flexible packaging has revolutionized the way milk is distributed to consumers in small milk pouches. I believe the future of the plastic industry in India is what the future of the food industry is – and the future of the food industry is directly proportional to the number of stomachs.”
Amul sells about 1.5-1.6 crore liters of milk daily. Sodhi said that Amul could deliver such a huge milk volume only because of plastic packaging. “The volume that we produce is impossible to sell in any form of packaging other than the plastic pouch. Today, whatever we sell is sold in branded form – Amul. Of around 30 million liters of milk that we get, 94-95% is sold in branded small packs mainly using plastics. Only 3-4% is sold as a commodity.”
“Plastic is a system that can be used for scaling. It is not cost-effective – it is cheaper. For packing 6 crore liter milk in pouches, the annual expense would be only Rs 1600 crore. Whereas, the same milk when packed in bottles would incur an annual expense of Rs 37,000 crore. Therefore, packing 6 crore liter milk in plastic pouches would provide a cost saving of Rs 35, 000 crore – the benefit of which would go to Indian consumers and farmers. Moreover, if the same milk is packed in bottles, many would not afford it. Hence, you can imagine how the plastic industry is helping the milk industry.”
Milk production in India has increased 10 times since 1970 from 21 MMT to 209 MMT in 2022. During the same period, the per capita availability has increased almost 4 times from 110 gm per day to 427 gm per day – despite a 2.5 times increase in population. “This is a clear example of self-sufficiency possible because of supply-chain efficiency,” Sodhi said.
As of today, the total value of the milk market is Rs 8.5 lac crores (USD 110 billion) of which the pouched milk market is about Rs 1.5 lakh crore (USD 20 billion) while the organized dairy sector is 3 lac crore. “However, with increasing population, the organized sector may easily become 10 lac crore in next 10 years.”
Amul’s success model
Explaining the success model of Amul, Sodhi said that his company follows a very simple model. “Last year, our turnover was 61,000 crore (around 8.5 billion dollars) while this year we are expecting around 75,000 crore – simply with a model where around 200 farmers form a cooperative society pull their milk, check electronically, process it at the district level, add value, and sell across India under one common brand name – Amul. Sodhi said that Amul’s success model is backed by consistency, commitment to farmers and consumers, marketing, technological and marketing innovations, and professionalism.
“In last 75 years we have been consistent in whatever we have done – be it consistent business objective, value for many and value for money, providing stable remunerative to millions of farmers day after day so that they are encouraged to produce more, provide to consumers the best food processed and packed in the best way using natural ingredients at a very affordable price. If you can take care of these two stakeholders – especially in the food business – no one can beat you.”
Sodhi said that the leadership role played by Amul’s Dr. Verghese Kurien, known as the Father of the White Revolution in India; and Tribhuvandas Patel, known as the Father of the Cooperative Movement in India, was also vital for the stupendous success of Amul.