Amul to set up 10,000 retail outlets

Following the footsteps of global fast moving consumer goods companies in India, dairy major Gujarat Cooperative Milk Marketing Federation which markets its products under the Amul and Sagar brand, is in the process of setting up a separate cell to handle modern retail.

While an informal network is already in place to handle the modern trade channels, a more structured and formal unit is expected to be set up soon.

R S Sodhi, general manager, GCMMF, said that a few executives from Amul's headquarters in Gujarat have already been dedicated to this channel.

This will be rolled out to the branch level over a period of time. Most FMCG companies such as Hindusthan Lever, Procter & Gamble and Marico have dedicated units, which work with the organised retailers.

Apart from managing the supply chain, this team would also work to create consumer schemes and offers, which would be run at these outlets.

At present, modern trade contributes less than five per cent to the total brand sales for Amul.

The company is also working on increasing its retail presence, both through branded outlets and in-store presence. In the past year, Amul has set up close to 900 Amul Priority Outlets and these will be increased to 10,000 over the next three years.

V J Matthai, assistant general manager, GCMMF said that by March 2008, the total number of outlets would go up to 3,000. Since these are being set up on a franchisee model, it requires almost no investment from the company, said Sodhi.

In addition to stocking the complete range on Amul products ranging from ice-cream, chocolates, cheese and sweetmeats, these outlets were also free to stock other brands in non-competing categories.

Matthai said that in addition to increasing its retail presence, the company would also work at increasing its penetration in existing outlets.

"We will increase our presence at various points of sale like railway stations, highways, chemists and BPO's apart from the supermarket and kirana outlets," he said.

Amul has a turnover of just over Rs 4,000 crore (Rs 40 billion) and has said that it intends to touch the Rs 20,000 crore (Rs 200 billion) mark by 2011.