‘We think and work like an IT company’: Amul’s Jayen Mehta

Q: What does it take to build a brand and keep growing? 

A: A brand is a promise, and most brands are facing one dimension of society only. It is either the producer or the consumer. Amul has always served both sets of interests — that of the producer and that of the consumer. More importantly, the purpose of the organisation is built in the brand’s DNA.

When I say ‘DNA’, I go back to the logo of Amul Dairy or the Kheda District Milk Producers Union, which was established in 1946, and the logo has four hands. One hand is of the farmer, the second is of the processor, the third is of the retailer or the seller and the fourth is of the consumer. 

The model of our cooperatives is very clear: There has to be an obsession with quality. So you innovate continuously, bring out new products, and bring more value to the consumer. Whatever the consumer pays, 80-85% goes to the producer.

Nowhere in the world do you have such a tightly controlled supply chain. 

Q How would you assess the impact of Amul @79 years?

A: This cooperative model has been replicated in different parts of the country. We are now looking at a white revolution in which more villages across the length and breadth of the country will come under the cooperative model. More milk will come in the organised sector; more farmers will benefit.

India is handling one-fourth of the total milk in the world. In the next 10 years, it will handle one-third of the total milk of the world. There is a trend of people moving from loose to packaged and branded milk.

If the consumers look for a good, trusted, well-distributed brand, a brand with a wide portfolio that offers value for money, then they will have to come to us. We are in a very sweet spot.

Q: How do you look at competition? 

There are two ways to look at competition. It is good in the sense that it will keep you on your toes. One of our marketing sutras is to continuously attack the category like an outsider. We have trained ourselves to do that. 

If I do not find out the chinks in my armour, somebody else will, and once they do it, it will be very difficult because then you will be reacting. Today, if I am continuously watching where my brand is, what my customer is doing, and what I need to do better, it will be much easier and cheaper for me to take action. And I am not talking about products alone. I am also talking about processes. The processes by which we design the organisation should not leave space for anybody else to get in. 

It is not about watching the big players only. In any district headquarter or town, if you see somebody coming up, we start watching that brand or that company very closely.

That is the culture you need to develop in an organisation.

Q The rise Karnataka’s state-owned brand Nandini has fuelled a lot of curiosity. Your comments.

Nandini makes Amul ice cream at three of its plants using their milk, but with my recipe. I lift that stock and sell it in the Bengaluru market. Both the ice creams are made with the same milk. 

Nandini invested in a flavoured milk plant. Before taking the decision, they came and saw our facilities. We guided them. Their flavoured milk competes with ours. But I know that together we have been able to keep privates and multinationals out. So, we do not shy away from giving our understanding, secrets and recipe to anyone else.

Nandini wanted to invest in SAP ERP. They came to our office, we showed them what we are doing, and these are the things we need to do and improve on. So, if Nandini succeeds, Amul succeeds.

In India, the cooperative collaboration system, the federal network that we have, is very strong, and it applies to Aavin (Tamil Nadu Cooperative Milk Producers’ Federation) also.

If Aavin wants cattle feed, we supply it. If it wants semen doses; we supply them. It wanted milk powder, butter, and oil. When there was no stock in the country, Amul supplied them by cutting its own requirement. So, the same applies to Kerala, Bihar, Punjab or any cooperative anywhere in the country.

Q Which are the categories in which demand is likely to explode?

There is an opportunity for an explosion in demand across all categories, starting with basic products such as milk, followed by buttermilk, and then paneer and khoya. Thanks to urbanisation, the demand for other products like butter or cheese, ghee and mithais have increased. The protein space is exploding in a big way. All these will lead to a very big opportunity to expand across categories.

Q What are the challenges you forsee in the execution of your expansion plan? 

A: Earlier, infrastructure, electricity, education, and incomes were challenges. That isn’t the case now. We are looking at the next level of productivity improvement. Eight to 10 crore people depend on milk for their livelihood. We will do things keeping them at the centre. 

Q: How have you kept pace with the changing times?

The vision and mission of our organisation is to think and work like an IT company. We designed and coined this slogan way back in 1995. It is not just a slogan; it is a statement of purpose. In that sense, we were among the first five dot-coms in the country. 

In the late 1990s, Amul products were sold through online ordering in 200 cities and towns of the country. In February, Amul launched Amul Artificial Intelligence “Sarlaben” to serve farmers of Gujarat on a feature phone. 

If you have to keep pace with the changing times and the changing customers, you have to anticipate a lot because the customer never tells you what he or she wants. You have to be ready for it. 

That explains us venturing into proteins, organics, probiotics and even dark chocolate. It never came in as an expression of interest by any customer, and not a single competitor was playing that game. But we realised that we have to be part of the change that the customer wants.