Daybreak - Amul made India the world’s top milk producer. Its next target is protein

Episode Date: July 11, 2024

According to the ICMR every individual should consume at least 48 grams of protein everyday. But in India, 8 out of every 10 of people dont meet their daily protein requirement. However, there is no denying the fact that awareness about the significance of what is often called the building block of life has increased after the pandemic. People are actively looking to include protein rich foods in their diet.Even the govt has pitched in. In 2020, the govt started an initiative to celebrate a National protein Day every year in February  to increase awareness about the importance of protein in India And that’s where Amul wants to come in. The dairy giant wants to use a key dairy byproduct—whey—to sell protein to a population that is hungry for itTune in.**This episode was first published on 28 Feb, 2024Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories

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Ideally, a person is meant to consume at least 48 grams of protein every day. But in India, eight out of every 10 people do not meet their daily protein requirements. But there's no denying the fact that the awareness about the significance of what is often called a building block of life has increased after the time. the pandemic. People are actively looking to include protein-rich foods in their diet. Even the government of India has pitched in. In 2020, it started an initiative to celebrate a national protein day every year in February to increase awareness about the importance of protein. And that is where good old Amul comes in. When we use milk to make cheese, we consume the cheese

and throw away the way. A day will come when we will throw away the cheese. and use the whey. This is what Jay and Mehta, the MD of Gujarat Cooperative Milk Marketing Federation or GMCC, the parent of Amul, heard at an international dairy conference. 25 years later now, that day is finally here. You see, Wei is the watery liquid that is left after milk is processed into curd or cheese. It is basically a byproduct. But it is still considered a complete protein because it has all the nine essential. amino acids. Amul happens to produce 2 million liters away every single day. So when we launch Amul protein which is a value for money product giving 15

gram protein in a 200 m l' pack worth 25 rupees or a protein lassi we realize that this is a segment which is already buying such products or protein products on the internet so we set up our own shop dot Amul website in which we started selling the products and I'm happy to get informed that we have more than 50,000 customers buying from us directly and we have are able to gather this valuable database and reach out with a new range of protein products which we are coming out shortly, be it a protein yogurt or protein cookies, protein ice cream, protein water, protein milkshakes and so on. So this is one category which is going to develop.

That was Jayne Mehta speaking a year ago to business today about Amul's protein plants. All these products are already in the market now. The latest on the shelves are what Amul is marketing as the world's highest protein super milk that has got 35 grams of protein in a 250 ML pack. Amul wants to make the most of what many are now calling the great Indian protein craze. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Da Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rahil Filippozo and I will come to you with one

business story that is worth understanding and worth your time. Today is Thursday, the 11th of July. The 90s kids will remember this iconic ad featuring the beautiful Smithapata. It was actually from a film called Manthan, directed by Sham Benegal. It was essentially the story of Amul and what we now know as the white revolution that transformed India from a milk-deficient country to the largest producer of milk in the world. 50 years later now, Amul wants to do the same thing with protein in India. I'm very sure in the years to come, whatever targets that we have got, it will be easily achievable for a simple reason that the brand Amul has achieved a size and a scale

and more importantly the trust of the consumers. And what we say, the taste of India, actually we have an opportunity to metamorphosize or evolve from just the dairy business to everything that you consume in your kitchen. That was Jayne Mehta. who has been associated with Amul for over 30 years now. My colleague Shavani Varma met him and he told her that the key to entering this huge market waiting to be tapped is launching products that can be consumed regularly. Think curd, buttermilk, protein powder, ice cream, milkshake, along those lines.

But as easy as it may sound, the path to dominating this market is not easy. Let's not forget that Indians are only starting to understand the importance of importance of protein in their diets very recently, which means that the market is still at a baby stage. In fact, it is so small that Ke Rathnam, a former managing director of Amul, who is currently the CEO of Tamil Nadu-based milky mist dairy, claims that it is not possible to use the millions of liters away every month for beverages and protein drinks. Why? Because there is not enough demand. Plus, it is kind of an acquired taste. I'm sure most of you know that protein products taste a bit weird at the beginning. But if there is anyone that can pave the way for

way protein in India, it is Amul. Stay tuned to find out why. Mehta told us that by 2025, Amul will be producing around 3 million liters of whey. And that kind of volume means cost benefits. Because way is basically a free byproduct, which is raw material for a whole range of new protein products. Now, if you look at other companies, especially those who are not in the dairy business, for them the cost of producing protein-based products is obviously much higher because they have to procure it. An Amul executive told the Ken and I'm quoting, the cost of protein production at Amul is just 60 to 70 per gram compared to other players like Epigamia which may procure it for

3 to 4 rupees per gram. Which explains the difference in the prices. For example, Epigamia's protein milkshake is 3.000. times the price of Amul. Other dairy cooperatives, two, do not pose much of a threat to Amul, like Nandini by the Karnataka Milk Federation or KMF. Rajshakar Murthy, the director of quality assurance at KMF, told us that because Nandini operates on a comparatively smaller scale, its way production is negligible.

Its daily way production is one-fourth of Amul. Plus, way needs to undergo expensive treatment processes. So it is tough for small dairy companies to take on these kind of costs. For example, Kishore Indakuri, the founder of the 7-year-old Sidd's farm, said that they throw away about 2,000 liters of waywater every day. So some companies reduce the impact of the costs by turning it into raw material. For example, Mumbai-based neuterous concentrates its way and uses it as cattle feed. But now, it's on Amul to expand this very niche market.

Nine out of 10 people in India do not even know how much protein they should be consuming every day. So, can Amul do it? Stay tuned to find out. Amul has a massive network of nearly 4 million dairy farmers, more than 15,000 distributors and a million outlets across India. And let's not forget, Amul also has a pricing edge over its competitors. Thanks to its in-house way production, it can offer more protein per rupee to the Indian consumer than its rivals. Inducuri from Sid's farm believes that Amul is able to pack in an additional margin of three to four rupees for every 200ml cotton compared to its regular products. Also,

the cost of milk procurement for Amul or any other dairy cooperative is cheaper compared to private players. A dairy industry executive told us that Amul has entered into Indian categories and brought protein into products like Lassie. These are products. products that are consumed more than, say, a Greek yogurt. But like I mentioned earlier, protein also needs to go easy on the Indian consumers' palettes, meaning it needs to taste better. And Ratnam, the former Amul MD says that the protein category will only grow in India if the product does not contain any additives and is developed using natural procedures.

Else, such products will not work out in the long run. But then again, Amul has been known. to create a major market where there was none. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, subscriber-only apps, and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the website.

I am Snigda Sharmai, your host, and today's episode was edited by my colleague Rajiv Sien.