How Amul survived the pandemic?

As soon as lock-down was announced in the country, households panicked and rushed to grocery stores to stock up on essentials even after Prime Minister announced that the essential services would be exempted from the lock-down whereas crowd gathered outside warehouse and the company did not had any options left but to do retail sales, to everyone surprise there were no disruptions the next morning and the milk truck arrived on time.

India imposed a strict lock-down between 25 March and 7 June but there were no instances of shortage of dairy products or customers being extra charged. In contrast, essential items which are perishables such as fruits and vegetables experienced regular fluctuations in price and availability.

The pandemic has proved the intrinsic strengths of the cooperative dairy industry and the resilient supply chain of Amul. Amul works on trust and disciplined supply chain built on social innovation model. Pandemic or no pandemic, given the fact that milk is a highly perishable product, it has never back off from the commitment of a stable price for both consumers and farmers.

The Amul brand is connected with 3.6 million farmers where the products of Gujarat Cooperative Milk Marketing Federation or GCMMF is sold under Amul brand. Milk is brought by 2.6 million farmers twice a day from 18,600 villages and then the milk is processed, packed after transporting it to district milk unions. 10,000 distributors and a million retailers deliver the products to billion consumers daily.

Once the lock-down was imposed, Amul declared cash incentives for staff at dairy plants, drivers, sales executives, distributors and retailers. Although casual workers received extra cash aid for working during a pandemic between 100 - 125, distributors received an additional 35 paisa incentive per litre of milk. Food and stay arrangements were made to avoid any labour shortages for employees inside dairy plants.

Around the same time, the firm reached out to the Union home ministry and state departments of animal husbandry to arrange passes for its employees and ensured that empty trucks were permitted to return (after supplying milk products).

It coordinated with the district collectors where packaging factories were situated to ensure continuous supply of packaging materials. Amul also arranged for cattle feed to be exported to Gujarat for its farmers from states such as Punjab and Haryana. Nearly 45 percent of the goods were shipped by freight trains, which reduced travel time.

Amul continued to take extra care of their staff, planning their meals and stay plus cash incentives. From warm water for drinking to Ayurvedic medicines (to boost immunity), all was successfully done, there was not a single recorded case of infection among plant workers and not a single litre of milk was wasted. The plant could handle more than 500,000 litres of milk it received daily.

The lock-down led small dairies and unorganized trade withdrawal from the supply of milk, Amul received 15-17 % more milk from farmers as households preferred a trustworthy brand over unbranded or loose milk, demand for Amul 's liquid packed milk increased by 5-7 % relative to Pre-Covid days.

Given the closing of hotels and restaurants, demand for cheese and paneer is at least 30 % higher, while sales of butter and ghee are up 10-20 %. During the shutdown, demand for ice creams plummet but Amul was able to shift the ice cream distribution network into other product segments. The lockdown and the pandemic fear led consumers trust in Amul in addition to this the uninterrupted delivery helped them rise. Amul managed to bring some 12,000-crore cash into the hands of the dairy farmers who supplied them with raw milk, while many corporations failed to sustain their production chains and product sales during the pandemic, Amul will definitely gain market share.

Even in such time, Amul has introduced 'Ginger' and 'Tulsi' milk to improve immunity in the Covid-19 pandemic as coronavirus vaccine is yet to arrive, their latest variants of milk will ensure that people have adequate immunity before them to combat the deadly virus. Such drinks can be enjoyed daily by any age group at any time. They come for 125mL easy-open-end can, at a price of just Rs 25. At room temperature, the packages have a shelf life of 6 months. Amul introduced Haldi milk earlier in April which is known for its antibacterial and anti-inflammatory properties.

 Thus, we can see that the brand value and trust has certainly helped Amul to survive such a pandemic with strong supply chain of farmers and distributors whereas the benefit of the Amul cooperative model is that profit is not a business goal where they never drive away a farmer and the primary aim is to provide products to the consumer for the lowest possible price. It has done a fantastic job (during the lockdown) leveraging its work culture and its image. Amul has not only kept its promise of delivery of its products but has achieved a growth which seems impossible in current period with lock-down and global recession round the corner also the GCMMF has sat a goal to achieve business turnover of 1 lakh crore by 2024-25 by targeting a spot in the world's top three dairy players.