Amul has been able to keep it going despite COVID-19 challenges: R S Sodhi
R S Sodhi, MD, Amul, on the impending economic challenge that has come by the industry and how the brand is dealing with the large amount of collection and deliveries
While many FMCG companies witnessed slow growth rates in FY20, the Gujarat Cooperative Milk Marketing Federation Ltd (Amul) reported a 17 per cent increase in its turnover for the 2019-20 fiscal. The new crisis brought about by the COVID-19 outbreak hasn’t affected Amul’s milk supply chain yet, says R S Sodhi, MD, Amul, in a conversation with N Chandramouli, CEO, TRA.
He further spoke about the unprecedented crisis that has not only caught India but the entire globe and how one of India’s largest brands is working towards shining through the storms.
Sodhi spoke of the impending economic challenge that has come by the industry and how Amul is dealing with the large amount of collection and deliveries. “The situation is impacting millions of people and to be sure it is going to affect businesses. In my 30 years in the industry, it’s not like such disruptions, lockdowns or closures were not there but till now we have seen them in really small geographies: like cities, states or districts. We never thought it would be all over the world,” he remarked.
In the wake of COVID-19 heatlth advisories, Sodhi shared that the brand was taking various precautionary sanitation measures. “From collection of milk in the villages, or chilling them in the village, collection of milk in the road milk tanker, bringing it to the nearest chilling centre and processing it, we ensure that we follow all recommended hygienic sanitary practices as we are in the food business. The members have been educated on how they should maintain distance, wash hands, use a mask or sanitise the trucks. And as soon as they come back, our workers are checked by the doctors.”
Sodhi shared that one of the problems that came by during the first few days of the situation was procuring labour. “The labour count had dropped to 25-30% and we had to manage passes for them. However, the situation has now stabilised as local authorities are also supportive as they know its Amul and milk is an essential commodity. The problem labourers were facing was with lack of public transport. Our workforce now comes in two teams, on alternate days,” he said.
Sodhi further revealed, “In the first two days of the situation, our sale was 15% more than usual as people were panic-buying. The volume was more. While some purchased extra, others couldn’t get it.”
However, he observed that soon the demand reduced by 30% as various sectors like hotels and restaurants had to pull plugs on their operations and were not buying milk, cheese, etc.
Sodhi asserted that despite the issue with transportation of workers and other logistics, Amul has been able to keep it going. The company works with a lot of contract labourers as well. The company ensures it gives incentives and free meals to employees in the factories, he said. “Your workforce has to understand the importance of your purpose which needs to be conveyed. People should work willingly, you can’t force someone saying that you have to come to the factory. You have to assure their and their family's safety and hygiene,” Sodhi advised.
Asked if Amul would suffer any economic consequences due to the COVID-19 crisis, he asserted: “If people don’t earn, they will spend less. If not today, the impact will be felt tomorrow.” Quizzed on whether Amul will have a lower outlook in the year to come, Sodhi said he did foresee that yet. “It all depends on which segment you’re operating in and how you manage the demand. Playing with the price, availability, branding, you can manage the demand. Our market is not based on what you consume. We have to market our products at the best,” Sodhi contended.
On his message to small and medium businesses for thriving in this landscape of no cash flow, Sodhi said brands must ensure that they stay relevant. “After this scenario, consumer expectations are also going to change. They will become more conscious about health, sanitation and hygiene. You have to see how you place your industry in the future. It’s very difficult today to plan what I’ll do tomorrow,” he opined.
“Communication with the team and keeping them with you is important. Don’t isolate your communication with them,” he said, adding that while the impact of the situation will vary, no industry was likely to collapse in the next 2-3 months. “You have to lead your team from the front. A leader has to inspire,” Sodhi said, stressing on the importance of overcoming inertia and organisational fears.
On the increase in demand, Sodhi said: “Shelf-offtake has been more than what we are able to push in the market. Pipeline gaps are there. We’ll get back once things are relaxed.”
In conclusion, Sodhi spoke about how technologies were helping the brand to deal with the uncertain times. “People sitting at home are doing invoicing, e-delivery through apps and VC meetings. These are helping us a lot,” he remarked.
He also pointed out that with the whole family now together at homes, it’s the best time to get the interrupted attention of the viewers. Businesses must have a short-term approach, a clear focus and ensure the organisation is together. Leaders should lead from the front to be able to weather this storm, Sodhi said while signing off.
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