Nearly four months of partial or full lockdowns globally and in India after the outbreak of COVID-19 have tested nerves of millions. Forced to stay at home, many feared they would not get the supplies to feed their families. But India’s best-known dairy brand Amul has always had nerves of steel. Not only did it unfailingly supply milk and milk products, but it also increased milk procurement, processing, and production, arranged logistics successfully, and kept its promises. It is the only popular cooperative in India to have come out with flying colors during the challenging lockdown.
When the world was gloomy about job-losses and pay-cuts, Amul gave incentives and motivated farmers and others to work more and earn more. It alone has paid its partners 15-20 percent more wages and incentives! And no COVID-19 positive case so far!!
How could it achieve all this, despite severe restrictions? As India slowly reopens now, the great story is unfolding…
Rupinder Singh Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand, replies in a wide-ranging e-mail interview to The Real Voice of India (REVOI).
REVOI: How could you keep production and supplies uninterrupted during these difficult times?
Sodhi: Currently, we procure 26 million litres of liquid milk a day, including 21 million litres from Gujarat and the rest from Maharashtra, Rajasthan, Uttar Pradesh and Madhya Pradesh. GCMMF maintained its average daily liquid milk sales of 15 million litres, of which 6.5 million litres are sold in Gujarat and the rest in other states.
In India, milk is a source of livelihood for nearly 100 million families. So keeping the supply running is not only a duty but in our national interest as well.
At the outset, we circulated a video message on social media, urging consumers not to go for any panic buying amidst the lockdown. We told them there will be no shortage of milk and milk products. Fortunately, we also got proactive support from the Union Ministry of Home Affairs, local administration, etc.
Even before the lockdown, we started taking steps at the village level, explaining safety precautions to the 36 lakh farmers who provide milk twice a day through 18,700 societies and 5,000 tankers. We issued work advisory and educated farmers about the need of social distancing, wearing masks, the use of sanitizers and frequent cleaning of hands, etc. Allocation of time slots for delivery of milk at Village Dairy Cooperative Societies (VDCS) to avoid crowding was also maintained.
Q: And how did you manage logistics for this mammoth exercise, particularly during a nationwide lockdown when all the wheels stopped from rolling?
A: Initially, there were some problems like the movement of refrigerated trucks, and with packaging material factories as they were not allowed to open. Also, our workers were not able to reach their workplaces, some of our distributors had trouble returning to their villages after distributing milk because their panicked neighbors objected.
But these bottlenecks were gradually sorted out as we had all the permissions in place and were in touch with the authorities concerned.
In inter-state transport, we faced delay in empty trucks returning from other states to Gujarat after delivering milk. We also faced issues in the supply of ingredients for cattle feed. While some of the ingredients are available within Gujarat, Amul’s cattle feed plants source raw materials like rice bran, corn, millet, and molasses from other states like Punjab, Haryana, and Rajasthan.
However, so far these issues have not had any major impact on our supplies. Also, the sale of chocolates and butter cookies has almost doubled as compared to last year. We also commissioned a new cookie manufacturing facility in North India in the middle of the lockdown period.
Q: The majority of the milk farmers are illiterate or semi-literate. How did you manage to keep them safe, and what guidelines did you provide them?
A: No doubt we had to take the precautionary and safety measures right from the village level in the classification, processing, and distribution of milk and milk products. As I said, we issued work advisory and educated our farmers about social distancing and taking necessary precautions and also provided protective equipment.
Posters of Do’s and Don’ts (in regional languages as well), issued by the Union Ministry of Health and Family Affairs, along with guidelines, were put up at various locations. Accordingly, awareness programs, regarding personal hygiene and necessary precautions, were conducted for the workforce involved in milk procurement. Necessary instructions for villagers on various preventive measures against COVID-19 was displayed on Notice Boards.
On the manufacturing front, we did face issues like shortage of labor and maintaining social distancing inside the plant. While milk processing is automated, packaging lines and the loading site involve a lot of manual labor. It was extremely difficult to manage social distancing. We had to increase the number of lines so that only a few people were kept standing in one line. You have to work at a lesser speed. Even with reduced speed, we could maintain production and meet demand.
Q: But how could you keep labor and logistics on the same page?
A: Right from the collection of milk from the villages, to bringing milk tanker to the nearest chilling center and processing it, we ensured that we followed all recommended hygienic and sanitary practices as we are in the crucial food business. Our members were made aware to strictly maintain distance, regularly wash hands, use masks, and properly sanitize the trucks. As soon as they returned, they were checked by the doctors.
The labor count had dropped to just 25-30 percent and we had to manage travel passes for them. However, the situation stabilized with local authorities’ support. The company works with a lot of contract laborers as well.
Amul, with a huge network of around 5,000 tanker drivers transport over 40 million litres of milk per day from village society to dairy plants in Gujarat and from plants within Gujarat to plants outside Gujarat. Since we sell milk outside Gujarat, milk is also transported to Delhi, Mumbai, Pune, Indore, Jaipur etc by road transportation. Amul is taking all the precautionary and sanitation measures.
As the transporters, laborers, security contractors, and other support staff had to start their work in the early hours, we arranged tea/coffee, breakfast, lunch, and dinner for them so as to avoid unnecessary movement and maintain social distancing. We also arranged accommodation for them, wherever required. We are providing hardship allowance to transporters, drivers, laborers, distributors, salesmen, and others to motivate them to continue working.
We opened all product lines (dairy, ice cream and milk) to all distributors, who generally are restricted to one the product line so that they could serve the customers of their nearby area better.
Q: What did you do to keep them positive and motivated?
A: To encourage people in our supply chain to supply milk without any interruption, we offered them incentives. While the world was talking about job loss and pay-cuts during the lockdown, we gave our supply chain partners, laborers and employees 15-20 percent more in terms of wages and incentives. This was especially for employees working in plants and suppliers of milk. This decision was taken to motivate their efforts.
We could hear the feeling of drivers. One said “a soldier cannot run away from the battlefield just because bullets are raining”. Another said “how could we sit at home when small children need milk every morning”. A third one said “We cannot falter when the country needs our services in these trying times”.
We also made a short film to salute our heroes.
Technology also helped the brand to deal with these uncertain times. People working from home are doing invoicing, e-delivery through apps, and VC meetings.
Moreover, we re-released retro advertisements on Doordarshan every Sunday alongside the popular re-runs of epic serials like Ramayana and Mahabharat. We telecast classic Amul advertisements in those shows. The retro ads have helped in creating a re-connect with consumers as well as establishing the brand recall amongst different age segments simultaneously since family viewing has become the new norm.
Q: Have you found any COVID-19 positive cases amongst your employees? If yes, what measures did you take to isolate and treat them?
A: Fortunately, there has been no such incidence so far. Given the serious nature of the pandemic, we have advised all our team members to take good care.
Q: What would be your next target in the near future?
A: GCMMF posted a 17% growth in its revenue at Rs 38,550 crore in 2019-20. We expect our turnover to grow 15% this fiscal year. The rise in household consumption of dairy and related products will compensate for any temporary loss of sales caused due to the closure of hotels, restaurants, and cafeterias during the lockdown period. We expect to do even before in FY21.
Q: Has the demand for Amul products, particularly milk, risen during a lockdown? If yes, what was this increase like? And how did you fulfil it?
A: When you talk about packaged food in the organized sector, there are three stakeholders. One is the farmer, who is producing it. The second is the consumer, mainly the urban one. The third is the whole supply chain. While we are hearing pessimism in many industries, the food industry is lucky, as 1.35 billion people are consuming whether at home or not. In fact, at home, consumption has only increased. And so production has also increased.
The little impact that we faced was in the supply chain. We have three types of supply chains. One is for perishable products like milk and its products whose supplies were maintained. The other segment is dairy products that include butter, cheese, ghee, milk powder. Within two-three days, the product categories demand increased from 10-50 percent. Today, we are selling double the quantity of paneer, 50 percent more quantity of tetra-pack milk, 20 percent more of milk powder, dairy whitener, butter, and ghee.
Earlier, there used to be working breakfasts and lunches. Now everybody is having proper breakfast, lunch and dinner and dairy products are consumed in all the three meals in many households.
Meanwhile, the third category which surely is impacted is the ice-cream segment. As most ice-cream parlors are closed, initially sales fell 95 percent.
Q: Did you get additional supply orders from other states? If yes, how much and how did you manage it?
A: Amul was asked to procure milk from non-members by state governments of Gujarat and Maharashtra after their normal supply sources – local dairy firms and sweet shops – either shut down during the lockdown or failed to procure enough quantities. Thousands of new dairy farmers temporarily joined our supply ecosystem during the ongoing lockdown. Due to the lockdown-linked restrictions, we found it difficult to get non-members on e-payment platforms and, thus, are reimbursing them in cash.
GCMMF acquired additional plants outside the state to process the surplus milk procured from milk farmers across the country. These have been leased on a temporary basis in Rajasthan and Maharashtra.
Q: Thank you so much Sir for sharing your precious time.
A: Thank you.