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Mon, Aug 25 2014. 01 42 AM IST
Amul to pump in Rs550 crore to meet rising cheese demand
Gujarat milk cooperative plans greenfield project in Palanpur in Gujarat, double capacity of existing plant at Amul dairy in Anand
New Delhi: India’s largest milk cooperative, Gujarat Co-operative
Milk Marketing Federation Ltd (GCMMF), which manages the
Amul brand, plans to spend ` 550 crore to triple its processed
cheese production capacity over the next two years to meet growing
demand for the dairy product.
“We will be setting up a greenfield project in Palanpur in Gujarat and
double the capacity of the existing plant at Amul dairy in Anand,” said
R.S Sodhi, managing director of GCMMF, in an interview at the
federation’s headquarters in Anand, 60 kms from Ahmedabad in
Gujarat.
Founded in 1946, the Gujarat Co-operative Milk Marketing
Federation best known for its association with the Amul
brand— plugged as the taste of India— sells packaged
milk, butter, cheese, ghee, paneer, ice cream, yogurt and
chocolates. Photo: Mint
GCMMF, which earned `18,143.46 crore of revenue in the year ended
March, has a separate unit for production of cheese 40km from
Anand in Khatraj, where the capacity will be extended.
Founded in 1946, the Federation best known for its association with
the Amul brand— plugged as the taste of India— sells packaged
milk, butter, cheese, ghee, paneer, ice cream, yogurt and chocolates.
Amul is also known for its catchy print ads with taglines punning on
current events and people in the news.
According to Sodhi, the additional capacity at the existing facility will be added in the next 10 months, while the new plant will be up in about
18 months. The co-operative will use the new Palanpur facility to expand the existing portfolio of processed cheddar cheese, cubes, slices
and dips. It plans to produce new cheese variants at the plant.
In 2013, India’s overall cheese market was pegged at `1,200-1,300 crore, with Amul’s market share (by volume) close to 50%, according to
a January 2014 report by research firm Euromonitor International.
Amul’s competitors in the cheese market include Go, a brand sold by Parag Milk Foods Pvt. Ltd’s Gowardhan unit, Bangalore-based
Britannia Industries Ltd and New Delhi-based cooperative Mother Dairy, a subsidiary of National Dairy Development Board.
Milk price increases have had an impact on the price of cheese. In 2013, the price of cheese went up by 11%, according to the Euromonitor
report.
Besides augmenting its cheese production capacity, GCCMF is also introducing a garlic variant of its widely sold Amul butter. The new
product will be launched by the end of this year. “We are just awaiting some approvals,” said Sodhi.
The garlic butter will be priced higher than the regular product, but its packaging and branding will be almost similar to that of Amul’s
marquee brand, which enjoys a dominant share in the `2,000 crore butter market.
Demand for value-added dairy products has increased as higher disposable incomes led to increased consumption of fat and proteins
even in the so-called mass market.
“Aspirations are similar, education and affordability has increased in semi-urban areas so demand is more pervasive,” Sodhi said.
As per industry estimates, shares of value-added dairy products are growing at around 25% every year and the pace is set to continue until
2019-20.
“The primary factors driving the growth in the dairy sector include rising disposable incomes, advent of nuclear families and consumption of
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8/27/2014
Amul to pump in Rs550 crore to meet rising cheese demand - Print View - Livemint
fast/instant food gaining ground in India,” said Manek Narang, a senior analyst at CARE Ratings.
In 2013-14, sales of cheese, although a small part of GCMMF’s portfolio, grew 22%; the cooperative’s butter sales rose by 21% in the same
period.
Indian households are finding more occasions to consume cheese at home, said Mohit Khattar, managing director at the gourmet store
Godrej’s Nature Basket, which sells imported as well as Indian packaged food brands.
“Not just kids, even adults are now very familiar with the product category and are willing to include it more frequently in their meals.”
Currently, Nature’s Basket stocks private labels in garlic butter. “Amul will ensure a more mass-market approach to this product category,”
he said.
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