New Delhi, 27th April 2020: Indian group GCMMF, which markets dairy products under Amul brand, expects its turnover to grow 15 percent this fiscal year from Rs 38,550 crore in 2019-20 despite economic slowdown caused by the nationwide lockdown to control coronavirus outbreak.
The household consumption of milk and other dairy products is expected to rise and will compensate any temporary loss of sales caused by the closure of hotels, restaurants, and cafeterias (HoReCA segment) during the ongoing lockdown period, said R S Sodhi, the managing director of Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF).
As per the company’s financial data, Sales of Amul Federation and its 18-member union rose 17 percent year-on-year and crossed Rs 50,000 crore in the year ended March 31, 2020.
The company looks to double its revenue to Rs 1 lakh crore in five years
Amul has expanded into new product categories like fruit juices and cookies. It has also doubled down on chocolates, with a strong focus on dark chocolates.
“If you want to increase turnover, you have to increase the volume of milk, which you are handling. We will expand our milk procurement and milk processing capacity within Gujarat and in other states, and also our penetration in more markets, especially for the fresh products,” said R.S. Sodhi, MD of Amul.
However, Mr. Sodhi also said that Covid19 and long term shutdown do impact Amul and other consumer goods player’s daily supply chain operations into hotels, restaurants, and cafes.
“Sales of ice-creams, beverages, cream, etc have been impacted significantly as hotels, restaurants, and outlets selling these products are shut in the lockdown,” said Sodhi.
According to an ICICI Securities report, “The overall demand for milk from industry estimated to have fallen by up to 25 percent. Ice-creams are going to be the biggest losers, as the lockdown will hit consumer offtake in the summer season, which accounts for half of the annual consumption. Ice-cream sales could drop 50 percent.”