Wednesday, March 12, 2008

Food for thought: Amul to enter bakery segment

The breakfast spread from the billion-dollar brand Amul will now be complete. Gujarat Cooperative Milk Marketing Federation (GCMMF), which so far introduced milk, butter and milk powder along with 150 products, will soon introduce the missing link — bread. Not just bread, the cooperative major will also bring in buns and cookies to hold its sway over the breakfast table. The plans to enter into the bakery segment will help Amul emerge as a major player in the food market, thus enhancing its scope from just dairying. The apex marketing body of dairy cooperatives, GCMMF, is aiming to capitalise on its wide distribution network, experience in dealing with perishable products and synergy between dairy and bakery products One of the 13 district unions of the Rs 4,300-crore GCMMF and pioneer of dairy cooperatives, Kaira District Co-operative Milk Producers’ Union, will soon test market for bread, buns and cookies. Lately, GCMMF is buoyant on ready-to-eat products like ethnic sweets, milk-based beverages and pizza. The Rs 800-crore Kaira Union has commissioned a pilot plant at Mogar in Anand district where the product remains untouched till final stage of production. It is aiming to offer reliability of dairy products in bakery segment also. At Mogar plant, Amul Dairy manufactures Amul Chocolates and Nutramul. There are not too many organised players in the bakery segment. Amul’s entry into the segment may force other food companies to revisit bakery plans.

Kaira Union vice-chairman Rajendrasinh Parmar confirmed the development. “We have country’s most popular butter brand and having bakery products like bread and buns would strengthen our portfolio. We would taste market in Anand and Kaira districts of Gujarat under Amul brand before firming up plans,” he said. According to a market expert, it is a wise move by Amul since GCMMF enjoys access to over five lakh retail outlets and longest experience in dealing with perishable products in India. So far, Amul’s exposure to bakery industry has remained limited only to serve pizza. However, the plans under consideration would add entirely a new product category in GCMMF’s basket of over 150 dairy products. “We would be rolling out bakery products in the next couple of months in local markets. Bakery is a new product category for us, but it has great synergy with our existing product range. Also, we are already manufacturing some of the inputs for bakery products,” Amul Dairy MD Rahul Kumar told ET. It may be mentioned here that Kaira Union manufactures bakery grade butter and chocolate flavours for ice-cream, which are most critical ingredients of cookies, bread and buns. Also, dairy cooperatives have wide spread network in villages to procure raw material grains for bakery products. Mr Kumar added, “Cookies have tremendous potential with biscuit market growing rapidly. And about 80% of butter consumption is with bread and buns in dishes like paav bhaaji and hence there is a perfect synergy between bakery and dairy products.” GCMMF would replicate the bakery product-manufacturing model in parts of country if the tests in Anand deliver desired results. With expanding milk distribution network, now, GCMMF’s member unions have dairy plants spread across country that can be used for setting up additional units for bakery products.

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