Some reviewing, some innovation – the dairy brand has to do this to stay ahead of the competition.

In its signature style, Amul paid tributes to Verghese Kurien, its founder, saying, “Thank you for giving us Hausla, Pragati and Anand”, punning on how his vision gave all involved courage, progress and happiness. The legendary founder of the almost 50-year-old Amul ensured that the brand was always larger than the person who created it. What lies ahead for the brand that is nearly twice the size of its nearest competitor and has great brand recall? It cannot afford to rest on its laurels, and much needs to be done if it is to maintain its premier position, say observers.

“Kurien built Amul as an organisation but there is no single hero who built the Amul brand. Today it is one of those brands which is not going to be harmed from the outside but can get weakened from the inside,” observes Anand Halve of chlorophyll, a brand consultancy.

While Kurien may have built the organisation from the outside, nurturing the brand and maintaining its dominant position in the foods business is going to be imperative.

It must move with the times and be careful while getting into new categories. After all, its foray into pizzas and chocolates has not been that successful compared to the rest of its dairy portfolio. Keeping this in mind it must innovate quickly and successfully to keep abreast of competitors.

It may face certain hurdles in the future. “There were concerns about the Amul brand when Kurien had stepped down in the company. But the company has been professionally managed and the brand continues to be strong. However, Amul cannot afford to get complacent because of its stature and should think of becoming a global entity if it has to defend itself in the domestic market,” claims Harminder Sahni, Managing Director, Wazir Advisors.

Agrees Jagdeep Kapoor, Managing Director, Samsika Marketing Consultants, “Amul has reached deep into the hearts and minds of Indian consumers and it is time it reached out to the hearts and minds of international consumers.”

But there are others who believe that Amul, in spite of its greatness, has done little to re-invent itself with the changing times and continues to remain primarily a ‘cheese and butter’ company.

Raghu Viswanath, Managing Director, Vertebrand Management Consulting, says, “Amul has not re-invented itself and has remained more of a butter and cheese company. It has not done enough to leverage the new categories such as milk and ice cream and even curds where it has just managed to stay afloat with its competitors. It needs to exploit the brand beyond just butter and cheese. While it may continue to record profits and revenues as a company, the brand has lost its sheen over the years and needs to rejuvenate to keep up with the changing times.”

Amul needs to keep track of consumers’ changing preferences as and when it decides to enter new categories. As Halve of chlorophyll warns, “Just like Nokia, which, in spite of being a strong brand, lost out since it could not see consumer preference moving towards smartphones, Amul should not lose sight of the changing times. It may be sitting on a Rs 12,000-crore gold mine but it must have a product range which is going to be exciting for the new consumer.’’

But the rub is that at the same time Amul cannot afford to move away from its core competency of pure milk products catering to the masses. “Getting into pizza was a wrong move as the basic product was bread and not cheese. The same failure was faced by Cadbury when it tried to launch biscuits,” observes Halve.

There could be other challenges such as sourcing and keeping up with the expectations of modern trade. As Damodar Mall, Director, Food Strategy, Future Group, says: “Amul could face challenges on the sourcing side as it is dependent on families to get milk. These families may not like to continue in the same line of business as incomes grow and then Amul might have to look at bigger aggregators to source its milk. Also, the brand may have enough awareness and pull, but it has to look at forging a better working relationship with retailers and have more SKUs.”

In fact, Amul has similar concerns. R. S. Sodhi, Managing Director, Amul, says, “Back-end milk procurement will be a challenge as the next generation may not like to continue with dairy farming. We have also increased procurement prices as an incentive.”

Amul believes it is doing its best to appeal to the youth and make itself contemporary. As Sodhi says, “In the past few years we have been making constant efforts to target youngsters with products such as Amul Cool. Associating with the World Cup and Olympics and sponsoring programmes such as Master Chef is all about connecting with the youth. After all, we are competing with the MNCs and domestic players and have to keep ahead with products which have different attributes.” Amul has pioneered new products such as frozen yogurt and probiotic ice cream and this should re-affirm its position as an innovator and market leader.

(This article was published on September 13, 2012)
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