Innovation – Type6 – Product system [Case: Amul]

As a part of Innovation series, let us take a look into the brand Amul under the ‘product system’ innovation category.  By taking the basic product (milk in this case), Amul is able to innovate by creating a suite of food products around it. We all know, today Brand Amul stands much beyond milk!

Amul - Taste of India
Amul - Taste of India

Let us take a sip of history before considering the innovation aspects.  It all started 65 years ago in the state of Gujarat a bunch of angry farmers wanted to do ‘something’ against the malpractices followed by middle-men in the milk supply chain. Like in many industries the middle-men were creating a ‘loose-loose’ situation for both milk producers and consumers by manipulating around the system. Strongly supported by Sardar Vallabhbhai Patel, they decided to get rid of the middle-men by forming their own co-operative society which will own the complete milk production chain, ranging from procurement to marketing. Thanks to strong leadership provided by visionaries like Verghese Kurien the Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) was formed in a small town Anand during 1946.

From this humble beginning, GCMMF created incremental innovations around milk, which eventually lead to ‘white revolution’ in the country. The Amul brand name strongly emerged out of this revolution, which a house hold name in today. Eventually the Amul model was replicated in different states in different names – Nandini (Karnataka), Aavin(Tamilnadu). This co-operative model has multiple innovative aspects, let us take a systems perspective.

As the milk production increased significantly over the years, the direct consumption of milk is a single dimension of the whole market and it’s potential. As the milk processing also saw multiple innovations, Amul introduced whole lot of bi- products which created a whole new system of products:

  • Butter (Cooking & low-fat varieties)
  • Cheese (Processed cheese & Paneer varieties)
  • Sweets (Shrikhand, Amrakhand)
  • Flavored milk (Kool milk)
  • Ghee (Cooking and Infant varieties)
  • Milk powders (Amulya Dairy Whitener)
  • Curd products (Masti Dahi, Lassee, Spiced butter milk)
  • Ice-creams
  • Chocolate (Milk, Fruit & Nut)

Amul introduced new channels to sell the above mentioned products by creating  ‘kiosks’. These kiosks, created in a franchise model come in five different sizes (preferred outlets, ice-cream parlours, railway parlours, kiosks and Café Amul) depending on the investment size. For an end consumer a suite of products available from a single kiosk which is of high quality and low cost. Looking from Indian context, Amul is a great innovative example for creating a system around milk.

Related link:

BOOK REVIEW: I too had a Dream [Autobiography of Dr. Kurien]

[Introduction to ten types of Innovation] [Innovation – Type 1 – RangDe] [Innovation – Type 2 – RedBus] [Innovation – Type 3 – Narayana Hrudhayalaya] [Innovation – Type 4 – Mumbai Dabbawalas] [Innovation – Type 5 – Reva Electric Car]