Introduction

About The Industry

The ice cream market in India is estimated to be around INR 2,000 crores, of which over 40%
belongs to the organized sector growing at about 15% Y-o-Y. Amul leads the pack with about
36-38% market share (5% of its total revenues), followed by Kwality Walls & Vadilal with
about 12-14% share each. These players not only have to fight the small local and cottage
industry players, but also the fact that the Indian cuisine itself offers a large variety of
desserts which are still preferred by most Indians. Due to this reason, the per capita
consumption of ice creams in India is about 300ml per annum, 1.4% of that in US, and 13%
of the world average, which can be seen as a huge opportunity in this sector in India
attracting new regional and national entrants. However, an issue is the seasonal nature of this
industry in India, especially true for the northern parts of the country. Bulk of the sales
happen during the summer months of April-July, while the sales witness a significant dip
during winter months of November-February. Additionally, the seasonality of events like
marriages affects sales in a big way, although institutional sales provide some cushion. But
what makes the situation worse is low supply of electricity, especially during the high
demand summer months that affects the ice cream stocks. Once the ice cream melts, it is nonsaleable, and drives retailers not to carry enough stocks not an optimal situation given the
not so favourable situation of cold chain in India. With the latest mandate for HUL to increase
its foods revenue, they might also be focussing on out-of-home footprint through ice cream
parlours, ice creams being a high growth category for HUL growing at about 31% last year.
On one hand where Amul is trying to increase its reach by adding retail outlets to the tune of
15k to its base of 70k outlets, on the other hand HUL is focussing on new product launches
and television campaigns for consumer activation. Half the market is driven by impulse
purchase, and rest by family consumption at home and in-parlour sales. There are niche
players in the parlour business, with Nirulas being an established player in the north and
Naturals in the west; and then there are premium players like Baskin Robbins. Location is the
key here like in any retail business, to ensure enough footfalls and an optimal rental profile
for sustained outlet level profitability. Brands are coming out with pro-biotic and low fat ice
creams targeting the health conscious consumers, and also new manufacturing processes
which reduce air content in ice creams giving more value for money to the consumers; but the
acceptance for such products is still to be put to a proper test in the market. Overall, the ice
cream market is heating up. What is to be seen is that for whom this heat helps in increasing
revenues & profitability of players, or melts the aspirations in the sector.

About The Company

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India's largest food
product marketing organisation with annual turnover (2014-15) US$ 3.4 billion. Its daily milk
procurement is approx 14.85 million lit per day from 18,536 village milk cooperative
societies, 17 member unions covering 31 districts, and 3.37 million milk producer members.
It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly known as
'AMUL', which aims to provide remunerative returns to the farmers and also serve the
interest of consumers by providing quality products which are good value for money. Its
success has not only been emulated in India but serves as a model for rest of the World. It is
exclusive marketing organisation of 'Amul' and 'Sagar' branded products. It operates through
56 Sales Offices and has a dealer network of 10000 dealers and 10 lakh retailers, one of the
largest such networks in India. Its product range comprises milk, milk powder, health
beverages, ghee, butter, cheese, Pizza cheese, Ice-cream, Paneer, chocolates, and traditional
Indian sweets, etc.
GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading
House" status. Many of our products are available in USA, Gulf Countries, Singapore, The
Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from
Government of India for Excellence in Dairy Product Exports for the last 16 years. For the
year 2009-10, GCMMF has been awarded "Golden Trophy" for its outstanding export
performance and contribution in dairy products sector by APEDA. In 2013-14, GCMMF took
giant strides in expanding its presence in International markets. Amuls presence on Global
Dairy Trade (GDT) platform in which only the top six dairy players of the world sell their
products, has earned respect and recognition across the world. By selling milk powders on
GDT, GCMMF could not only realize better prices as per market demand but it also firmly
established Amul in the league of top dairy players in world trade.
For its consistent adherence to quality, customer focus and dependability, GCMMF has
received numerous awards and accolades over the years. It received the Rajiv Gandhi
National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India's
Most Respected Company Award instituted by Business World. In 2003, it was awarded the
IMC Ramkrishna Bajaj National Quality Award - 2003 - certificate of merit- for adopting
noteworthy quality management practices for logistics and procurement. GCMMF is the first
and only Indian organisation to win topmost International Dairy Federation Marketing Award
for probiotic ice cream launch in 2007. For the innovations, GCMMF has received AIMARK Swamy High Performance brand award 2013 and CNN-IBN Innovating for better
tomorrow award in 2014. World Dairy Innovation Awards- 2014 for Best Marketing
Campaign - "Eat Milk with Every Meal". For the tree plantation activity GCMMF has
received seven consecutive Good Green Governance award from Srishti during 2007 to 2013.

GCMMF - An Overview

Year of Establishment
Members
No. of Producer Members
No. of Village Societies
Total Milk handling capacity per day
Milk Collection (Total - 2014-15)
Milk collection (Daily Average 2014-15)
Cattle feed manufacturing Capacity
Sales Turnover (2014-15)

1973
17 District Cooperative Milk Producers' Unions
3.37 Million
18,536
24 Million litres per day
5.42 billion litres
14.85 million litres
6340 Mts. per day
Rs. 20733 Crores (US $ 3.4 Billion)

Table 1 The overview of GCMMF

Three tier structure

The Consumer

State Co-op. Milk Marketing Federation

Tier - 3

District Milk Co-operative Union

Tier - 2

Village Dairy
Co-operative

Tier - 1

Milk Producer

Figure 1 The three tier structure followed at GCMMF

Village Dairy Co-operative: An Anand Pattern village dairy cooperative society

(DCS) is formed by milk producers. Any producer can become a DCS member by

buying a share and committing to sell milk only to the society. Each DCS has a milk
collection centre where members take milk every day. Each member's milk is tested
for quality with payments based on the percentage of fat and SNF. At the end of each
year, a portion of the DCS profits is used to pay each member a patronage bonus
based on the quantity of milk poured.
The District Milk Co-operative Union: A District Cooperative Milk Producers'
Union is owned by dairy cooperative societies. The Union buys all the societies' milk,
then processes and markets fluid milk and products. Most Unions also provide a range
of inputs and services to DCSs and their members: feed, veterinary care, artificial
insemination to sustain the growth of milk production and the cooperatives' business.
Union staff train and provide consulting services to support DCS leaders and staff.
The State Co-operative Milk Marketing Federation: The cooperative milk
producers' unions in a state form, a State Federation, which is responsible for
marketing the fluid milk and products of member unions. Some federations also
manufacture feed and support other union activities.

Vision
Amul's vision is to provide more and more satisfaction to the farmers, employees and
distributers.
Mission
We at GCMMF (Gujarat Co-operative milk Marketing Federation) endeavour to satisfy the
taste and nutritional requirements of the customers of the world, through excellence in
marketing by our committed team. Through co-operative networking, we are committed to
offering quality products that provide best value for money.