It’s a win-win for consumers as the tricity milk market is set to witness the clash of the titans.
As Amul — the brand that spurred the White Revolution in the country — is trying to make inroads into the market here, Punjab’s Verka, ‘till-now-undisputed’ indigenous brand of milk and milk products, has decided to take the giant head on.
Amul has started supplying about 25,000 litres milk per day in the tricity which is considered a strong market for Punjab State Co-operative Milk Producers’ Federation Limited (Milkfed) that owns brand Verka.
Feeling the heat, Verka has rolled out an aggressive marketing strategy. As a result, the billboard war is on between the two giants in SAS Nagar with Verka promising “purity”, while Amul offering the “Taste of India” at competitive rates.
Amul is primarily tapping into the unorganised milk sector which as per an estimate is about 15-20 lakh litres per day. The organised sector --- about 5 lakhs litres a day --- is dominated by Verka.
The Punjab brand has now decided to improve procurement, offer better rates to dairy farmers and consolidate its dealer network.
Verka claims its milk is being procured from local dairy farmers, whereas other players in the market (read Amul) are procuring it from contractors.
Verka officials also plan to increase the number of its retailers (about 3,000 so far). “As of now, we are just strengthening our retailer network. We would be adding about 40 more Verka booths by next month, taking the total number of such booths to 180,” said JK Gupta, general manager, Verka milk plant, SAS Nagar.
For Amul, the tricity is a lucrative market. “Chandigarh, Panchkula and SAS Nagar are very promising market for us. We aim to capture 25% of the market. We have started selling milk through 1,200 retailers in the tricity. The number will go up gradually,” said JS Punjrath, who heads Amul’s operations in Punjab. Punjrath is a former managing director of Milkfed.
Amul made its first plant functional in Batala in Gurdaspur district in November 2014. Most of its procurement is being done from Batala from where the milk is sent for packaging to a plant in Khamano in Fatehgarh Sahib district.
“Our daily procurement is 1.15 lakh litre which we expect to increase to more than 3 lakh litres by April”, added Punjrath, who claimed that they are not in competition with anyone but their presence would definitely improve functioning of Verka.
Consumer is the king
With Amul stepping into the market, tricity customers will have more options to buy quality milk at competitive rates. Earlier, Verka --- being the biggest player in the organised sector --- used to dictate milk prices but now with another option available, prices would remain under control.
Competition will ensure quality, say experts.
Dairy farmers all smiles
Dairy farmers are likely to get better procurement price for their produce. It will also give a much-needed boost to the dairy industry.
Amul pays Rs 565 per kg fat along with bonus to its suppliers, while Verka pays around Rs 520.
“Verka will have to improve its quality and increase its procurement rates to retain suppliers. As of now, Amul is not procuring directly from dairy farmers and is banking on contractors for supply. But once they start procurement from dairy farmers, it would definitely make things difficult for Verka,” said a former chairman of Verka milk plant.
Share of pie
Verka procures only about 5.5% of milk produced in the state. Small dairies, sweetshops and smaller processing entrepreneurs procure the rest.
Tricity milk stats
*Organised milk market: 5 lakh lts per day
*Unorganised market: Between 15 to 20 lakh lts per day
*Verka share as on date: 75% of the organised market
*Vita share: About 5%
*Others: The share of Reliance, Nestle, Mother Dairy, Tru is close to 20 %
Full cream milk: Rs 46/lt
Standard milk: Rs 42/lt
Double tonned: Rs 34/ lt
Skimmed milk: Rs 32/lt
Amul is kept its prices the same as that of Verka. Only the rate of full cream milk is Rs 1 less than Verka.