Amul, Walmart in sourcing talks  ( June '8,2004, BS)

The Gujarat Co-operative Milk Marketing Federation (GCMMF) is in talks with the US-based Walmart to sell its Amul range of products through the global retailer’s chain of stores.

Walmart has been test marketing a couple of Amul products at some of its stores in the US over the last couple of months. The company is believed to be convinced about the quality and sales potential of the products.

While the federation initially plans to sell butter, ice-cream and, cheese through Walmart stores, the next phase may include Amul packaged milk. Walmart has 3,200 retail stores spread across the US.

As all Amul plants maintained by various dairy co-operatives are HACCP-certified, the federation may not face any problem to sell its milk in the US, a source said. HACCP is the highest international certification for any milk plant.

The federation at present sells Amul butter, readymade gulabjamun in cans and various cheese products in the US through a group of distributors. However, Amul does not sell ice-creams in the US.

“Our talks with Walmart have been going on since the last few months and soon Walmart may start selling Amul ice-cream and other key products at all its stores in the US. This will help the federation to boost its retail sales in the overseas markets, especially in the US, which plays a dominant role in the exports market of cheese, butter, icecream and packaged milk,” said R S Sodhi, general manager (marketing), GCMMF.

“Amul ice-creams have been selling well in Singapore and the Middle East. If the deal with Walmart works out well, we will be able to increase our sales revenue by manifolds in the next few years,” said R S Sodhi.

“Though we want to remain focused on the domestic ice-cream market, we are also interested in expanding our exports in this segment. Apart from the huge Indian population in the US, sales of Amul ice-cream through Walmart stores will also help us to acquire a large number of customers from other countries,” Sodhi said.

GCMMF has achieved an 18 per cent rise in its sales to Rs 2,893 crore at the end of fiscal 2003-04 against sales of Rs 2,400 crore in the previous fiscal. It is targeting sales of over Rs 3,400 crore by the end of the current fiscal, while it aims at sales of Rs 5,000 crore in two years.

“The federation achieved a 15 per cent growth in revenue from ice-cream sales year-on-year. By introducing new products, mainly in the premium segment in the current fiscal, GCMMF is targeting a significant rise in its income to Rs 10,000 crore in the next five years,” a source said.

GCMMF, which has been strengthening its presence in Nepal, Bhutan and Bangladesh, is open to marketing Amul products in Pakistan through various points in Gujarat and Punjab.
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USA calling

Walmart has been test marketing a couple of Amul products at some of its stores in the US
Amul plans to initially sell butter, ice-creams and, cheese through Walmart, the next phase may include its packaged milk
Amul may not face problems in selling its milk in the US as its plants are HACCP-compliant
Walmart has 3,200 retail stores in the US