Dairy giant Amul emerged from India’s lockdown in a much stronger position than before. RS Sodhi, managing director of the Gujarat Co-operative Milk Marketing Federation and owner of the Amul brand speaks to WARC’s Gabey Goh for WARC Marketer's Toolkit 2021 about never going dark, meeting new consumer demands, being hyper-local and the organisation’s belief in long-term consistency.
How did Amul adapt to the COVID-19 pandemic and lockdown in India?
We had four months of lockdown and no one was allowed to go out. What happened in my family must have happened everywhere, right from morning from breakfast, lunch to dinner – one common topic was food. What to make? Where to get the ingredients? What recipe to follow? Who will make it? So more than health and safety, one topic that dominated was food.
We were lucky that we were in a category where consumption increased tremendously. And while the Hotel, Restaurants, and catering (HORECA) industry accounts for 10-12% in food consumption on average and 40-45% in bigger cities, that all went away during lockdown.
With people staying at home, consumers wanted to buy the best ingredients from the brands that were available and affordable because availability became an issue. Amul, having been in the market for more than 75 years, met all the criteria. It’s not enough to be visible, you also have to be available.
As an essential food item, we were able to continue operating our 84 factories collecting 25 million litres of milk a day for 3.6 million farms across the country. For many consumers, what they know about dairy comes from websites or marketing materials but in India, dairy is the livelihood of 100 million rural families, and enabling consumers to continue buying dairy products was essential so that we can give back to the farmers.
To that end we incentivised all supply chain partners to maintain a smooth-running supply chain throughout the disruption. During the 80 days of lockdown, we have given Rs 11,000 crore (US$1.5m) to our farmers. Our milk procurement was also up by 17%, and there was a 30-40% increase in sale of milk, butter, paneer and cheese.
We also saw the rising demand for immunity-boosting products from consumers and we have launched 11 new products in the last five months to meet that, from immunity boosting beverages like turmeric milk to Haldi ice cream with immunity boosting elements. Milk itself is an immunity booster so we are promoting that.
During the lockdown, many brands in India went dark and stopped advertising but Amul didn’t. What made the company decide to continue and even double adspend during this time?
- Long-term consistency and commitment to a brand position is key as branding efforts take decades to take root in the minds of consumers.
- The rising trend of localism and consumer preference for locally produced food means that even for a nationally-known brand like Amul, there’s a need to be seen as local – to a state or city.
- Ensuring supply chain resilience matches marketing promises is, and continues to be, a core priority. It’s not enough to be visible, you also have to be available.
In March, I remember we had a meeting with our media agency, and they said that everyone was watching TV to know the latest updates on the pandemic and many brands were pulling their advertising. I told my agency, if we double our budget, can you get us a good deal? So, they got us some good deals and we doubled our advertising spend.
And you won’t believe it, across all the news channels, no matter which channel you tuned in to, you saw Amul during lockdown – we got more than 100x benefits with this. We realised during COVID-19 that families were watching TV together so content such as serials would have high viewership. And just a week after, we hit a jackpot when ‘Ramayan’ and ‘Mahabharat’ came back on Doordarshan, so we sponsored those two serials at a very reasonable cost. We got 10 times more viewership than the Indian Premier League (IPL) finals match, at one tenth of the cost – we never anticipated such a response.
We continued to advertise and do branding campaigns because we realise that branding is not a sales pitch, it is long-term asset building. While you’re doing that you’re also continuing to communicate with your consumers because there’s no other way to do it. With supply chain partners you can communicate through email or WhatsApp but to your millions of consumers, you communicate through advertising.
Our consumers are our family members, we have families that have stayed with us for three generations, so we must communicate. And when your consumers are under stress and difficulty, you don’t stop communications.
How would you describe Amul’s approach or philosophy when it comes to the craft of marketing?
We have one philosophy at Amul which is: consistency. We don’t change our brand every year or every two or three years. Once we take a position, we keep to it. We have a long-term view because a brand position takes decades to get into the consumer’s minds. In the mid-1990s, we came up with the “Amul the taste of India” and that has been our corporate slogan since.
Wherever I go, when I tell people I work at Amul the first reaction I always get is “Mr Sodhi, your Amul topical ad campaign is excellent!”
Not many brands have that. And let me tell you, this top of mind brand building has been done by spending peanuts! Our total advertising spend is 0.8% of our annual revenue and out of that 0.8%, our spend on the Amul Girl topical ads is 4-5% of our total advertising budget.
This campaign was created by our brand building partner daCunha Communications, who have been doing this for 50 years. It started with Sylvester daCunha and now his son Rahul runs it. They conceive it, create it and put it on social media or the press.
We see the topical ads when the world sees it – that creative doesn’t come to us for approval, we just pay the bill.
That’s quite an unusual arrangement!
For what purpose do you hire a creative agency? You hire for their competence. So why would you hire them if you don’t have confidence in them?
We’ve had the same two advertising agencies for the last 50 years, even the same people working on the account. One, Shashi Sinha, joined as a junior and is now the CEO of IPG Mediabrands who is handling our media account.
The same goes for the people in my team as well. So, when I talk about consistency, it’s not just about consistency in product recipe, in production, in process, but also in consistency in communications and our people.
The Amul Girl is arguably the brand’s most established and powerful brand asset – how do you see her role changing in an India impacted by a pandemic and looming recession?
Our Amul Butter Girl is the brand messenger with “Utterly Butterly Delicious” and she comments on anything and everything happening in India, or globally in politics, in sports, in Bollywood and in Hollywood. She does not spare anybody. She is not afraid of anybody. And she does not favour anybody. She only tells the mood of the moment and she’s being doing so for 55 years.
I don’t think post-COVID there’s going to be any change, and she has continued doing the same thing during the pandemic. She is relevant at anything to anybody, everywhere.
How has the company leveraged digital channels/means to stay engaged with consumers?
In mid-April, we started this experiment of Live Recipes with two chefs on Amul’s Facebook page. It has been almost five months since then and we have completed more than 1300 live shows! It is perhaps the longest and biggest live recipe event in the world.
We started this activity in the middle of lockdown period as the sentiments of HORECA industry were down because of the uncertainties due to the pandemic and the outlook was also projected to be bleak. As the largest food brand in India, we needed to put in our efforts to show solidarity with the industry and assure them of things returning to normalcy once the lockdown opens gradually across the country.
So, the objective of this initiative has been very simple. To connect the chefs who are at home under lockdown and give them the opportunity to showcase their culinary skills and connect with homemakers who are also seeking innovative ways to cook simple home recipes for themselves and their families.
As of mid-September, we have reached 870 million accounts on Facebook with an average daily reach of almost 7-8 million Facebook users. The total viewership of our content on Facebook has been 124 million minutes over the last 150 days. So, on an average 1 million minutes of Amul recipe content is being viewed on Facebook daily. At an average duration of 45-50 minutes per recipe, we have created more than 60,000 minutes of original content.
What started as an India-specific activity has become an international event and Facebook has turned out to be the right medium for this.
What’s your outlook for India for the year ahead? And for your category in particular?
I think overall, the next six months will be difficult in terms of recovery for many categories. But when it comes to food, we are lucky, because with 1.35 billion people, food is the one thing they will need to spend on – especially for a branded food organisation like us and the other 40 plus players like us, it is positive.
So, I think this growth will continue, and for us we’re looking at 15-16% revenue growth for the year. And overall, recovery wise, I think India is going to recover a lot faster than other countries.
What will be your key areas of focus for the coming year?
Dairy as an industry remains largely unorganised in India, and there is tremendous demand in some product categories where people want branded and packed products, so we have to see how to increase capacity to meet that demand firstly and how do we build out distribution penetration to serve not just the big cities but villages with 5000 people where there’s demand.
The other trend is the increase in consumers using e-commerce, especially in the bigger cities, and how we are going to make our presence felt in these marketplaces to reach consumers.
The other challenge is the fragmentation of media. Not everyone is watching news or sports, or they’re watching content via OTT where you can’t really advertise. Then there’s social media, but you can’t really measure that exposure as it’s difficult.
The trend has been building up over the last few years and has picked up thanks to COVID-19, but consumers want locally-produced products. So, for Amul, which is a national leader, our biggest challenge in terms of marketing is how to make Amul a local brand. We don’t want to be seen as a national brand because consumers feel a local brand is fresh and knows their tastes and is affordable.
So, we are trying to project that image of a local brand, we have communications that showcase that. If you’re buying milk in Calcutta, you’re getting it from local farmers and it has been processed and sold in Calcutta – they should not think that the milk is coming from the other side of India. It’s fresh.
Nobody wants to have imported food products these days. I remember when I joined the industry 30 years ago, all the attention and demand was for imported brands. Then the preference for national brands came and now it’s local – local to your city or state.
We’re trying to project this in all our communications, down to our website being available in all the local languages of every state – that’s the first point of contact and that it extends to commercials as well. For example, for Tamil Nadu in South India, the work must be conceived by our office there and not in Mumbai in the West, because they know what the local preferences are. And we use local partners, actors, language and music for creatives. That’s what needs to be done, for every state, and India has 28 states and 8 territories.