We all know about the severe impact the pandemic had on our economy. The entire country went into shambles when Prime Minister Narendra Modi announced a nationwide lockdown on 24 March.
The entire country went into crisis mode. The economy was falling at an exceptional rate and with million Covid cases arising every day, the Indian healthcare system was collapsing. During the lockdown, it is estimated that 140 million people lost employment while there was a severe cut in salaries for many employees.
Things got so bad that the Indian economy was expected to lose over ₹32,000 crores (US$4.2 billion) every day during the lockdown. Major companies in India such as Tata Groups, Aditya Birla Group and Bharat Forge either suspended production or significantly reduced operations. One such industry that was heavily impacted during Covid was the dairy industry and the losses cost the milk producers of India more than 112 crores every day.
But despite such economic backlash, one company, in particular, was thriving. It was able to strategically navigate through the pandemic situation with such finesse that it became a great case study for many aspiring entrepreneurs. They didn’t just minimize their losses but also increased their revenue by 698 crores.
The company is none other than Amul.
Anand Milk Union Limited, also known as Amul, turned a crisis like global pandemic into a source of additional profit. While many companies were downsizing production and firing employees after struggling to cope up with losses, Amul was making major money. In 2020 alone, Amul introduced 33 products in the market, procured an additional 35 lakh litres of milk every single day and even paid 800 crores extra to the rural milk producers of India.
So, here lies the most important question. How did Amul manage to achieve such an incredible feat? And most importantly what you can take up from Amul’s empiric growth during the pandemic?
Business development expert Hirav Shah presents you 2 brilliant business strategies Amul used to increase their revenue during the global pandemic:
Upscaling the production
When the PM announced nationwide lockdown, everyone went into a panic mode. Panicky households rushed to their nearest grocery stores to hoard essentials. The same thing happened to Sodhi. Alerted by the severity of the situation, Sodhi rushed to the nearby milk parlour, but by then the shelves were nearly empty.
Discouraged by the predicament, Sodhi returned home with two small packs of curd and a pouch of buttermilk. Sodhi realized, “If my own family is panicking what others must be going through.” He was none other than Rupinder Singh Sodhi, who happens to be the managing director of Amul. He quickly realized the severity of the situation and alerted his team to upscale the production.
Given the situation, it was a risky move.
During the lockdown, several businesses either cut down or closed their operations and this resulted in a loss in demand for the dairy industry. These industries, which included restaurants, catering services and hotel businesses accounted for 20% of the revenue for the organized dairy sector.
So, when there was a decrease in demand, upscaling the production was silly. But what most dairy companies didn’t envision was the increase in consumer demand for dairy products. During the lockdown, the household consumption of dairy products skyrocketed and that is how Amul scored its first proverbial century in the dairy market.
Invest in marketing
For any industry, marketing and advertising is lucrative option to popularize their product among the customers. But when the pandemic struck the Indian economy, brands started cutting down on advertisements to manage their losses.
Amul on the other hand increased its ad volume by 316% compared to 2019. They went ballistic with their ad campaigns. So much so that the Amul ad was viewed 10 times more than the IPL (also known as Indian Premier League).
You see, Amul wasn’t just flexing their money and dominance over the Indian dairy market. They were quite smart about it. When Doordarshan started airing Mahabharat, Amul also began to run their old ads to appeal to the nostalgic mood of the consumers.
With extremely diligent market analysis and careful planning, Amul managed to turn their luck for the better. This is how and why Amul managed to conquer the dairy industry and reigned supreme. From agile supply chain management system to rigorous marketing, Amul set a gratifying example to many entrepreneurs- concludes Hirav Shah- Business Coach and development expert.
