A whole new success

New Delhi: For nearly half a century, India’s most subversive social satirist has been a blue-haired, round-faced moppet who wields dairy-based puns on everything from multi-billion dollar financial scandals to government corruption and celebrity gossip. The Amul girl, the cartoon mascot of a 3 million-strong collective of dairy farmers, is India’s most famous advertising mascot and has helped turn the company she represents into one of the country’s most trusted brands.

Amul, the nation’s biggest dairy products company with revenues of $2.5 billion (Dh9.1 billion), sits at the nexus of old and new India, linking the Gandhian ideal of a country based on co-operative rural villages and today’s emerging 21st-century economic powerhouse. “It’s completely Indian,” says Rama Bijapurkar, a market research expert. “It’s a brand that belongs in the canvas of life [here] — and I can’t think of many other brands that do that ... it deals with my life, my country, my family, it understands the local idiom — so it’s beyond simple marketing.”

Gurcharan Das, a former chief executive of the Indian operations of Procter & Gamble, the fast-moving consumer goods company, and an economic commentator, echoes this view. “The values it is conveying are modern liberal values through those hoardings and through those messages,” he says. “It’s not just selling a product — it’s actually selling ideas about things that are right and wrong with our country.”

Last month Amul’s India, a book of musings by Indian luminaries — including cricketer Sunil Gavaskar, Bollywood actor Amitabh Bachchan and Milind Deora, a member of parliament — on what the company means for their country celebrating the brand and its advertising.

Amul’s enduring success is best understood through its marketing. Amul spends just 1 per cent of its annual turnover on advertising but its campaigns built round the Amul girl and cartoon characters that send up current events have made the brand part of the national conversation.

On a recent Tuesday illustrator Jayant Rane of daCunha Communications, the Mumbai agency that has run the campaign since its inception, turned his hand to the biggest news story of the day: the decision by India and Pakistan to reopen cricket ties for the first time since the 2008 terrorist attacks in Mumbai.

The ad depicted an Indian and a Pakistani cricketer shaking hands, each with a slice of buttered bread in the other hand, and the Amul girl standing by smiling. By the next day, the billboard was up on Mumbai’s streets with the tagline: “Share with neighbours”.

In recent weeks Amul has riffed on Time magazine’s cover story on the disappointing tenure of Manmohan Singh as prime minister, Roger Federer’s tennis victory over Andy Murray at Wimbledon and the death of Bollywood actor Dara Singh. The ads — most often involving puns based on bread and butter or dairy, in a mix of English and Hindi or a regional language — have helped the company build an identity that is both rooted in traditional India and, by tackling contemporary issues, stays tuned into the concerns of younger Indians.

But branding only partly explains Amul’s continuing dominance. According to R.S. Sodhi, managing director of the Gujarat Co-operative Milk Marketing Federation, Amul’s parent company, the unusual business model, involving more than 16,000 village co-operative societies, nearly 3.2 million farmers, 5,600 distributors and a network of more than 1 million retailers, works because “the production, processing and marketing [is] owned by the farmers”.

The organisation was founded as the Kaira District Co-Operative Milk Producers’ Union in 1946. At that time, farmers were seeking to escape exploitation from middlemen and Britain’s colonial dominance of the milk sector, and sought help from Sardar Patel, one of the country’s leaders during its fight for independence from Britain. He proposed the model that remains in place: professional management of a union of local village co-operatives through which farmers control the procurement, production and marketing for — at that time — the government-run Mumbai Milk Scheme.

The Amul brand, short for Anand Milk Union Ltd, was launched in 1957 by Verghese Kurien, a Syrian-Christian from Kerala who had studied nuclear physics. Over the course of subsequent decades, his model was exported to other states, creating a network of linked co-operatives that continues to underpin the Indian dairy industry.

“In terms of a country rapidly coming out of poverty and with a growing middle class, that kind of structure is ideal because it has enormous trust and confidence within the subcontinent, and it has been supporting the livelihoods [of many farmers] for many, many decades,” says Dame Pauline Green, president of the International Co-operative Alliance.

That model has also made it hard for big international food groups to gain a foothold in the dairy market. “Amul is a very reputed brand if you talk India as a nation,” says Sodhi. Even in individual states where Amul has domestic competitors, they too are run as co-operatives “All are co-operative brands, all are number one in their states — and that is why still in India no private brand is able to emerge as a leader, because at a national level Amul is there to compete and at state level, regional brands are there to compete.”

The company’s reliance on a diffuse network of milk procurement centres, because poor Indian farmers cannot afford to travel far to sell their milk, has also proved a powerful defence against foreign competitors. Where more commercial ventures might require big contracts with industrial farms to increase margins in order to meet shareholder demands, Amul’s suppliers can choose to sell their milk in whatever volume they can muster on that particular day. The average intake per farmer is just over 3 litres per day.

While this is a small amount, the Amul model allows the company more flexibility than any international entrant might have. With so many suppliers on which to call, even if thousands of their suppliers were unable to supply milk on a certain day, they would not struggle to meet demand. “This is an extremely efficient company when it comes to supply,” says Arvind Singhal, head of Technopak, an Indian retail consultancy.

“Their co-operative model gives them incredible options.”

Paradoxically, Amul has succeeded both despite and because of the rapidly changing India that surrounds it. In the wake of the country’s breakneck, two-decade modernisation, the Amul girl stands out as a nostalgic link to a simpler past.

This, says Rahul daCunha, whose father created the Amul advertising campaign 50 years ago, which he now runs himself, explains why he has had it so much easier than global companies such as Nestle. “[It] is a big brand, don’t get me wrong, but they are under the pressure of being international, with branding and advertising,” he says. “We have the freedom to be wholly Indian.”

– Financial Times