From reinventing its distribution network to launching a range of immunity building dairy products such as haldi, tulsi and ginger milk, RS Sodhi, MD of the Rs 38,550 crore dairy company Amul, says that it has been business as usual even during the COVID-19 lockdown.
Though industry data indicates a 15-25 per cent dip in demand for dairy products, Sodhi claims that Amul has seen a surge in household consumption of dairy products. "Over 15 per cent of dairy revenues come from the HOREKA segment, which due to the lockdown has completely dried up. However, the revenue loss in the institutional segment has been compensated by the surge in household demand. People are locked in their homes and are thus spending extended hours in their kitchens," explains Sodhi. He says that home consumption of milk-based products has increased by 15-20 per cent. Demand for categories such as cheese, claims Sodhi, has gone up by 80 per cent, while paneer sales have increased by 40 per cent. Demand for products like condensed milk has also doubled.
However, categories such as ice-cream has seen a 80 per cent dip in sales. Sodhi also admits that the company is sitting on huge inventory of milk powder, with HOREKA sales coming to a halt.
Like most consumer goods companies, Amul also faced a supply chain and distribution crisis during the early part of the lockdown when it wasn't able to deliver its products to distributors and retail outlets. "Unlike earlier, when we used to have a separate supply chain for fresh, ambient products and ice cream, we have now converged our supply chain. Since the trucks distributing ice cream were idle as there was a dip in demand, we have started using them to deliver our fresh and ambient products. We are making sure that our products reach our consumers," says Sodhi.
While Amul with its scale and distribution may have benefitted during the lockdown, dairy experts claim that there is a massive dip in procurement and sale of dairy products in other cooperatives, especially in smaller states such as Jharkhand, Odisha, and Assam. "With demand dipping, procurement has also reduced. A state like Jharkhand which used to collect 1.30 lakh litres per day prior to COVID, has reduced its procurement to 60,000-70,000 litres per day," points out a senior dairy expert.