Benefitting From Disasters- How Amul Turned The Tables During The Pandemic!

The June 2020 Global Economic prospects studied the Covid-19 pandemic’s immediate and near-term impact along with the long-term damage it has done to the world’s economy. 

The baseline prediction predicted a 5.2 percent drop in global GDP in 2020, the deepest global recession in decades, notwithstanding governments’ unprecedented attempts to combat the crisis with fiscal and monetary policy support.

The COVID-19 pandemic has expanded at an alarming rate, infecting millions and bringing economic activity to a halt as countries enforced harsh mobility restrictions to halt the virus’s spread. 

The economic devastation was already visible as the health and human toll rose, and it marked the world’s worst economic shock in decades.

But where the whole world was fighting the declining economy, one company in India was busy making profits through the disaster.

Amul

Amul is a Gujarat-based dairy cooperative society. 

It’s a cooperative brand administered by the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) jointly owned by 36 lakh (3.6 million) milk producers in Gujarat and 13 District Milk Unions’ apex bodies across 13,000 villages. 

Amul was the catalyst for India’s White Revolution, which saw it become the world’s largest producer of milk and milk products.

Tribhuvandas Patel spearheaded the establishment of Kaira District Milk Union Limited, afterwards renamed Amul (Anand Milk Union Limited), in 1946. 

The Amul Foundation contributed significantly to India’s white revolution.

Amul Pandemic Plan

The declaration of a statewide lockdown in India in March 2020 due to the spread of Covid-19 was a setback for many enterprises, already struggling to stay afloat amid the crisis. 

However, R S Sodhi, the Managing Director of Amul, sensed an opportunity in the crisis. 

He believed that it was the moment for Amul to beef up its supply chain and marketing efforts to reach individuals who stayed indoors due to the weather. 

People’s eating habits had also changed, with consumers preferring reliable packaged food and ingredients, as they were safer than non-packaged products.

During the lockdown, where many commodities and food products manufacturers shut down their facilities and manufacturing units, Amul saw an opportunity and attempted to assure a consistent supply of milk and milk products across the country. 

The lockdown period showed a 5-7 percent boost in demand for Amul’s liquid packaged milk compared to the pre-COVID-19 period.

Here’s how they did so!

Considering the market change;

  • During the pandemic, people focused more and more on their hygiene, their trust from “lose milk” had been shunned
  • Amul took the benefit of this opportunity to rigorously market its packed milk
  • The result was as expected when other businesses shut their businesses, Amul saw a high rise in sales of its milk as customers preferred the Amul brand to lose milk

Play for nostalgia;

  • When, in the pandemic, Ramayana and Mahabharata started playing on Doordarshan, Amul perceived that the TRPs would be high
  • Hence they immediately grabbed the sponsorship deal
  • Amul then started showcasing its old ads on tv and played the play of nostalgia with people
  • Adding to the old magic shows, this readily influenced the watcher’s feeling, giving Amul an even better impression in the consumer’s mind

Introduction of new products;

  • Aside from consumers, a dairy company’s other primary market is the hotel and restaurant businesses
  • When lockdown compelled these to shut down, Amul, instead of being disappointed by this, introduced many new products like cheese and others
  • It perceived that as restaurants shut down and people were bound to their homes, home-cooked food would become increasingly popular
  • The introduction of new products was timely as people used those to cook ample succulent dishes giving Amul a significant sales rise

Use of spare goods;

  • After introducing products what Amul could face as a problem was getting those products to people
  • As the launch was new, Amul had no new transport to dedicate to those
  • But, they did see that as the ice-cream industry had shut down, their ice-cream trucks were vacant
  • They hence decided to make use of them and successfully transferred their goods without much expenditure! 

Use of spare labour;

  • When other dairy companies in the market shut down their supplies, Amul saw that their milk suppliers had ample extra milk 
  • Amul hence approached these people and offered to buy their milk at a reasonable rate, giving them employment and meeting the demand for its products! 

A Business Success During The Pandemic

When other businesses show failures, Amul’s tale of benefiting from disasters is a tale to behold. 

The company not only helped increase its revenues but also gave employment to a large number of people who were struggling at that time to make ends meet. 

Contrary to our previous case studies of Kodak, Colgate, and Western Union, Amul did all- 

  • Not staying missing out on greater opportunities
  • Perceiving the future in the present
  • Business extension while keeping consumers in mind!