Inhabitants at Kudal, a sleepy rural town in Maharashtra, have found themselves a new love: a spanking new ice cream parlour. In a place where the concept of cafés is yet to arrive, the Amul outlet, a part of the cooperative's rural push across the country, has brought much joy to the locals.
“We see huge potential for growth in the parlour business coming in from small towns,” said RS Sodhi, MD of the Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns the Amul brand.
“We have identified retailing as a strategic thrust area and made giant strides here over the last five years. Today we have the best distribution in the country, reaching out to the smallest of the towns,” said Sodhi.
Amul currently has 7,000 Amul Parlours in more than 1,600 towns across the country, opened through franchises that GCMMF monitors. The foray is fetching an annual turnover of Rs. 500 crore (5% of its total turnover of Rs. 11,660 crore). GCMMF aims to add 3,000 more of such parlours, with the focus on small towns.
At present, market leader Amul has a 40% market share in the icecream and frozen desserts business, estimated at an annual revenue of Rs. 2,500 crore and growing at 20% every year. The company is trying to leverage its vast supply chain logistics to grow the parlour business.
It is as much about reaching out to customers as fighting off rivals, as the likes of Hindustan Unilever’s Kwality Walls, Mother Dairy and many regional players scale up presence.
Amul's expansion comes at a time when the competition is waking up to the potential of the segment. There is also the possibility of investment coming in the supply chain logistics with the opening up of foreign direct investment in multi-brand retail.