RS Sodhi credits plastic for Amul's success story

RS Sodhi said, India is world's number one milk producer and the biggest milk market in the world. He mentioned how 12 crore packs are sold and consumed every day. A feat which is possible only because of low-cost and efficient plastic packaging systems.

In dairy, Amul does not have a single competitor pan-India. The competition is from regional players,  be it, milk, butter, ghee, or even ice creams. In ice cream, Amul’s competitor is Kwality Walls, but they’re not available pan-India. In Karnataka, Amul is competing with Nandini, Verka in Punjab and Delhi its Mother Dairy, and in Mumbai there are 20-odd brands. One reason for the success of Amul, according to Sodhi is, “the supply chain efficiency of Indian food companies or dairy companies.”

He added, “Amul’s business objective is not only for money and value for money, but “providing stable remunerative prices to the millions of farmers day after day.”

Sodhi said, “The producers are encouraged to produce more and the other side provides the best food products in the best way, that is, natural ingredients at affordable price. In the food business if you take care of these two main stakeholders, your business is going to grow. Nobody can beat you.” He reiterated the importance of technology in the packaging and the second is commitment to farmers.

The Indian food market is estimated to be 50 lakh crore per annum, growing at a rate of 8-10% annually. Sodhi said, “The dairy constitutes three lakh crores so one can understand how the organised food space is increasing."

The main thing Sodhi said is to ensure how Amul as a brand continues to remain relevant and serve the consumers. He said, “By this, I also mean the farmers who we source the dairy from. Also, you need to solve the purpose of the consumer and provide the value of the product. You have to give value for money at affordable prices and have to keep innovating your brand in product delivery, positioning, packaging, variants and distribution channels.”

Sodhi spoke about packaging innovation in milk products right from the beginning. He spoke of the evolution of milk sales from the doodhwallah network to glass bottles, and then to tinplate as well as Tetrapak. He mentioned how LDPE pouches permit day to day sale of milk. He said, “Amul is packing milk in a single layer LDPE pouch film made from virgin plastic granular and it is 100% recyclable.

The country’s biggest milk co-operative generates more than 3 crore plastic packets per day. Under the Extended Producer Responsibility component of the Plastic Waste Management (PWM) Rules, revised in 2018, industries are already required to recover and recycle part of the plastic packaging they generate. Sodhi said, the milk pouches are rarely found among the plastic litter.

He spoke about Amul taking the lead in creating reverse logistics and recycling of single layer 100% recyclable LDPE pouch film which is deployed for packing Amul milk, dahi and buttermilk as well as increase the quantity of recycling and ensure better remuneration to ragpickers.

He said milk packed in LDPE as opposed to other packaging technologies ensures the cost benefits goes to the farmers and the consumer. He said, "If the same milk is being sold in glass bottles the cost will double and middle class and lower middle class people would not be able to afford that. The margin on this supply chain monitor distributor retailer ought to get a 5-6% but for the same product packed in Tetrapak will increase your supply chain margins to 12-15%.

He told the 1550 delegates at the ElitePlus summit that the organised food and dairy industry is 20% for a population of 1.4 billion Indians. He said "Imagine the growth potential in food packaging. It can be scaled up packaging and this is possible if we reduce the issue of logistics in packaging."

He added, "The word sustainability has been hijacked by activists and environmentalists." He shared an anecdote where he interacted with a farmer in Canada who told him the word "sustainability" starts only after hunger in the stomach can be stopped.

Sodhi said, "Sustainability is providing jobs to millions of people. Unfortunately, it has been used as a tool to stop or reduce the development of developing countries. We are all children of this planet. We have to take care of gas emissions, but we have to see that this planet is owned by 7 billion people."

He mentioned, "I don't think I have read anywhere any positive side of the plastic in any form. How many of the people participating in this sustainability conference could do research about how plastic is good for pharma or consumer goods or how the common citizen is recycling plastics? Point is, we have to promote the good deeds of plastic, how plastic benefits humankind and what actions the industry has taken. Similarly, consumers have to take responsibility."

He concluded his address by saying, "Whatever Amul has achieved, one of the main contributors has been plastic."