Case Study: Amul's Response to COVID-19

Introduction

• Date of Lockdown: March 24, 2020
• Impact of Lockdown:
  • Millions lost jobs, industries came to a halt.
  • Indian economy suffered a loss of over 10 lakh crores.
  • Dairy industry also heavily impacted, with losses exceeding 10 lakh crores.

Amul's Resilience

• Company Overview: Amul (Anand Milk Union Limited)
• Revenue Generation: Increased revenue by 698 crores despite the pandemic.
• Strategic Actions:
  • Introduced 33 new products.
  • Procured an additional 35 lakh liters of milk daily.
  • Paid 800 crores extra to rural milk producers.

Understanding Market Dynamics

• Decline in Demand:
  • Restaurants, catering, and hotels saw a 20% decline in revenue.
  • Overall sales decline of 10-15% for Amul.
• Shift in Consumer Behavior:
  • Significant rise in household consumption of milk products.
  • Increased health consciousness led to a shift from loose to packaged milk.
• Strategic Preparation:
  • Amul prepared for a surge in demand while competitors cut down supply.
  • Demand for specific products surged:
    • Cheese: +80%
    • Cottage Cheese: +40%
    • Condensed Milk: +100%
  • Amul operated plants at 115% capacity during lockdown.

Supply Chain Management

• Logistics Adaptation:
  • Utilized railways for product transportation due to labor shortages.
• Strategic Partnership with IBM:
  • Investment of 80 crores for digital transformation in 2009.
  • Developed a system to track operations and manage resources efficiently.
• Resource Optimization:
  • Diverted idle resources from ice cream and frozen foods to milk supply chain.
  • Incentives provided to ground staff and laborers for motivation and safety.

Marketing Strategy

• Increased Advertising:
  • Advertising volumes increased by 316% compared to 2019.
  • Creative marketing campaigns resonated with public sentiment (e.g., nostalgia during lockdown).
• E-commerce Collaboration:
  • Partnered with platforms like Big Basket, Dunzo, Flipkart, Swiggy, and Zomato for product sales.

Key Lessons for Business Leaders

1. Embrace Risk:
   • Good leaders prepare for risks; great leaders leverage them.
2. Resourcefulness:
   • Build an agile system to manage resources effectively during crises.
3. View Crises as Opportunities:
   • Identify market shifts and capitalize on them for competitive advantage.

Conclusion

• Amul's Legacy:
  • Established a benchmark in crisis management for the dairy industry globally.
• Final Note:
  • Encouragement to learn from Amul's strategies and adapt them for future challenges.