Amul Franchise: A Guide for 2021

Who does not know Amul in India? Amul as a brand has a very high recall among its customers. It has a wide range of dairy-based products. Amul products are economical on the pocket with good quality. In other words, Amul products are value for money. This value for money proposition of Amul products is the crucial reason for its success. As there is high demand for the Amul products’, many people wish to associate with Amul and sell its products. One of the ways to associate with Amul and sell its products is to take Amul Franchise. Let us understand about the Amul & Amul franchise in this blog. 

Amul franchise

History of Amul

Amul is a cooperative of milk-producing farmers. With its headquarter in Anand (Gujarat). It started as the Kaira District Co-Operative Milk Producers Union Limited in 1946. The farmers formed the cooperative to bypass the cartel of the exploitative middlemen. The exploitation resulted in milk-producing farmers not getting the right value for their produce. As milk is a perishable item, it was not difficult for intermediaries to exploit the farmers as they had no option but to take the offered price. Thus by selling milk, farmers did not have a sustainable income. Sardar Patel, Morarji Desai, and Tribhuvandas Patel played an important role in starting this cooperative movement.

As the movement gained momentum, it diversified itself beyond milk, and that is when it felt the need to have a brand name. In the 1950s, the cooperative chooses the name Amul, which means precious or priceless in Sanskrit. The movement that started from the two villages is today successfully running in nearly two lakh villages across India. Today Amul is the largest dairy in Asia and the 9th largest in the world. Turnover of Amul (financial year 2020) was fifty-two thousand crores rupees (INR 52,000,00,00,000), with nearly sixteen lakh farmers being the stakeholders.

Amul Structure

Amul, as an organisation has two different setups. 

The first step includes the farmers, which forms cooperative societies at the village level known as Village Dairy Cooperative Societies (VDU). The job of the VDU is to collect and procure milk for the farmers. These village cooperatives elect district milk unions (DMU). The DMUs employ professionals to manage the dairy, process and package the products.

DMU further elects state-level unions called the state milk Federation (SMF). The SMF purchases milk and milk products from DMU and sells them across the state. A well known state-level union is Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of the Amul brand name.

 In the second setup are the professionals who play their part diligently. One of the professionals whose name ring the bell is Verghese Kurien. Who rose through the ranks to become the Chairman of the company.  

Industry Status

Let us understand, the performance of the industries of which Amul is a part.

   Dairy Industry in India

   As per this report from FICCI, in 2017-18, total milk production was a little over seven lakh crore rupees (INR 7,00,000 crores). India is the largest milk producer globally, with a market share of 21% of global milk. The United States Of America follows India with a 12% global market share of the milk produced. Though the milk’s per capita consumption is not high, it is catching up with every passing year. As per the projections, milk production in India will grow at 15% year on year basis in the coming years. These numbers show that dairy products have bright future in India. Due to high future expected growth rate and increase in dairy consumption, it is understandable if people want to start some business associated with this industry. 

   Frozen Dessert Industry In India

   As per this report, India’s Ice cream industry in 2020 was a little over twenty thousand crore rupees (INR 20,000 crores). Which has more than doubled in the last seven-year. Moreover, as per the projections, the Indian Ice cream industry will grow at the annual compounded rate of 14%. And it is expected to be rupees forty-four thousand crores by 2026. While the same projections predict that worldwide growth will be a little above 4% in the coming years. Per capita, ice cream consumption in India is only 400 milliliters. Which is low compared to China and America, where ice cream consumption is 3000 milliliters and 22000 milliliters respectively. Thus there is much headroom for an increase in ice cream consumption in India. Hence, entering the Ice cream business can reap rich rewards as this industry grows.

Products sold by Amul

Though Amul is popularly known for its milk and ice creams, it sells another 20 products. Some of them are as follows

Cheese, bread spreads, paneer, chocolates, dahi, ghee, beverages, creams, bakery products, and other items. A detailed list of Amul products could be viewed here.

This vast range of products allows the Amul franchise to sell at least something to a customer walking in. As the pricing of Amul products is competitive hence selling them is not difficult.

Interested in low-cost franchise opportunities? In that case read Top 10 courier franchise opportunities in India 2021.

Amul Franchise Business

Amul franchise comes in two formats. One format is of Amul Preferred Outlet, Amul Railway Parlour, and Amul Kiosk. Another format is Amul Ice-Cream Scooping Parlour. Let us understand in detail about all the Amul franchise opportunities.

Amul Franchise Models

amul ice cream parlour franchise

(1) Amul Preferred Outlet franchise

    Following are the requirements for Amul outlet franchise:

Expected shop area: 100-150 sq ft

    Cost of Interiors: 80,000 – 1,00,000 rupees 

    Refundable Deposit: 25,000 rupees 

    Equipment: 80,000 – 1,00,000 rupees (deep freezer, Visicooler, Milk Cooler & Pizza Oven)

   Amul franchise cost: rupees 1.85-2.25 lakhs (Total Of Above Expenses)

(2) Railway Parlour Franchise (After getting approval from railways)

    Refundable Deposit: 1lacs rupees

    Refundable stall/kiosk deposit: 2.5-4 lakhs rupees

    Equipment: 50,000 rupees (deep freezer, Visi cooler)

 (3) Amul Kiosk Franchise

   Expected shop area: 100-150 sq ft

   Cost of Interiors: 50,000-1,00,000 rupees, 

   Refundable Deposit: 25,000 rupees 

   Equipment: 80,000 rupees (including deep freezer, Visicooler & Milk Cooler )

   Total Expected Investment: 1.55-2.05 lakhs (Total Of Above Expenses)

(4) Scooping Parlour Franchise

     Expected area 250-400 sq ft

     Interiors/renovation: 3,00,000 rupees approx

     Refundable Deposit: 50.000 rupees

 Equipments: 1,00,000 rupees approx ( Scooping cabinet, deep freezer, VISI COOLER, Pizza Oven, Mixer/Grinder, and Waffle cone maker, cone holder, and POS machine)

Amul franchise cost in India for scooping parlour: 4.5 lakh rupees (total of above mentioned expenses)

It should be noted that all the supplies to the Amul franchise will come from wholesale dealers.

(5) Product Margins

Franchisee gets different margins of different products. Margins on some of the products are as follows:

Pouch milk: 2.5%

Milk Products: 10%

Ice Cream: 20%

Pizza, Burger, garlic bread, shakes, sandwiches, hot chocolate: 50%

Support to Amul franchise

Importantly, Amul franchise gets the following support from the company:

   1. Amul provides the design and specification of the store. Also, inspects the work of the contractor. 

   2. Company helps assess the location’s business potential—also guides in the purchase of the required equipment.

   3. Amul provides signages and glow signs at its expense.

   4. Company also helps in creating a buzz at the franchise inauguration.

   5. Amul also gives special offers to its franchisees.

Advantages of the Amul Franchise

Let’s look at some of the apparent benefits of the Amul franchise, which are as follows:

1) Low investment franchise models.

2) Wide range of products.

3) Competitively priced products.

4) High brand recall of Amul.

5) Continuous product innovation and development.

Disadvantages of the Amul Franchise

In most cases, if a business has some advantages, it will also have some disadvantages, and Amul is no different. Following are its point of concerns:

  1. The margin on the products is on the lower side.
  2. Except scooping parlour franchise, no other model is suitable for the high street, specially in metro and mini-metro cities.
  3. Lack of premium quality products, specially ice-creams, result in franchisees not having any high margin products.
  4. Low margin products do not make it viable for a franchisee to sell through food aggregators like Swiggy and Zomato.

How to Take Amul Franchise

It should be noted that over the last few months, Amul has brought a slight change in its process of giving franchise. Hence, let us understand the updated process in detail.

Now all Amul franchise queries are handled by the company’s call center. It should be noted that the Amul franchise contact number is (022)68526666. The call center operates from 10 am-6 pm from Monday to Saturday. A person interested in taking the Amul franchise has to speak at the given number and provide necessary information like name, mobile number, email id, and pin code (of the area where that person is interested in taking the franchise) to the call center. Following which, the call center does the two things:

1. It shares the given information with the concerned official (who takes care of that area). 

2. Subsequently, it also shares the concerned official’s contact details with the person interested in taking the Amul franchise. 

Hence, the interested party can directly contact the concerned official and take things further.

Amul has developed this entire process to ensure that no fraud happens on the pretext of somebody giving its franchise.

Frequently Asked Questions

How much does the Amul franchise cost?

The Amul franchise has four models where investment starts from rupees two lakhs and goes up to rupees five lakhs.

Is the Amul franchise profitable?

The profitability of the Amul franchise largely depends on the location. It is not wrong to say that,there are some locations where the Amul franchise does well, and then there are some locations where the Amul franchise struggle. On the whole, the chance of an Amul franchise doing well in a middle income or lower-middle-income locality is more than an upper-middle or high-income locality.

Who is the owner of the Amul?

There is no one owner of the Amul. There the sixteen lakh farmers who are the member of its cooperative and they all are the owners.

How can I contact Amul?

Amul franchise contact number is (022)68526666.

If you understand Hindi then you can also watch this video on the topic

Conclusion

Amul is an excellent example of farmers coming together to bypass the middleman. The farmers can replicate this model with other farming products too. As for the franchise model, it is less expensive than many other established players. In addition, the masses use Amul products, the brand has a high recall, but margins are on the lower side. It is a great franchise opportunity in the locations where there are good footfalls. Admittedly, the Amul franchise is also more suitable for the middle and lower-middle-income areas of a city or town. Among all the franchise models, the Scooping parlour franchise of Amul is the best option as it serves a wide range of dairy and fast food items.

Summary

In this blog we covered following aspects of Amul:

  1. History of Amul
  2. Structure of Amul
  3. Industry status
  4. Different Amul franchise models and silent features
  5. Support to Amul Franchise
  6. Advantages of Amul Franchise
  7. Disadvantages of Amul Franchise
  8. Process of taking Amul Franchise 
  9. Frequently asked questions
  10. Conclusion
Disclaimer

This blog is created solely for informational and educational purpose. Ideas and suggestions given in this blog are not substitute for the guidance under the expert. Hence readers are advised to do own due diligence before taking action based on this blog. This blog is not warranted for content accuracy. Reader’s discretion is required on Amul franchise.

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