Why is Amul Franchise Profitable

Rishabh Sharma
Rishabh Sharma May 28 2021 - 4 min read
Why is Amul Franchise Profitable
The brand had a clear goal towards becoming the major player in the dairy industry along with providing business opportunities to the entrepreneurs of our country. Read on to know more...

Known as the foundation pillar of the ‘white revolution in India, Gujarat Cooperative Milk Marketing Federation Limited is the world’s ninth-largest dairy body. Amul stands for Anand Milk Union Limited, the word 'Amul' is derived from the Sanskrit word ‘Amulya’ which means priceless or precious. Its retail brand, reaches out to consumers with a wide assortment of products through a huge network of 11,000 retailers. And now, after its successful stint in selling dairy and frozen products, the brand has introduced fruit juices too. One can take up Amul’s franchise and earn a good amount every month. What makes it such a great idea? Well, the good news is that there is no need to share royalty or profit sharing for the franchise.

Formed in 1956, Amul is a cooperative brand managed by the Gujarat Cooperative Milk Marketing Federation (GCMMF), which today is jointly owned by 3.6 million milk producers in Gujarat. The total turnover of GCMMF and its constituent member unions and turnover of all products sold under the Amul brand exceed Rs 45,000 crore or USD 6.5 billion.

Amul: Lucrative Business Opportunity for Entrepreneurs

The brand had a clear goal towards becoming the major player in the dairy industry along with providing business opportunities to the individuals of our country. That is why this dairy giant It is said that people that are having a limited amount of capital could easily take Amul’s entered the franchising model that offered opportunities to interested entrepreneurs and individuals.

The Amul model helped India to become the world’s largest milk producer in the world. It is predicted that more than 15 million milk producers pour their milk in over 1.4 lakh dairy cooperative societies across the country.

Amul: The Umbrella Brand

The system pursues an umbrella marking technique. Amul is the basic brand for most item classifications created by different associations: fluid milk, milk powders, margarine, ghee, cheddar, cocoa items, desserts, frozen yogurt, and consolidated milk. Amul's sub-brands incorporate variations, for example, Amulspray, Amulspree, Amulya, and Nutramul.

The palatable oil items are assembled around Dhara and Lokdhara, mineral water is sold under the Jal Dhara brand while natural product beverages bear the Safal name. By demanding an umbrella brand, GCMMF skillfully maintained a strategic distance from association clashes and created an open door for the patrons to coordinate in creating items.

Innovations by Amul

Amul has constantly been innovating, be it launching new products, creative marketing campaigns, or challenging traditional societal trends to come up with better ones. As mentioned, Amul in the 1960s became the first brand in the world to make skimmed milk powder from buffalo milk. Also with its three-tiered cooperative structure, Amul transitioned from traditional operations to a more cost-efficient and effective structure. 

Business Growth

Amul’s revenue stood at INR 38,550 crores (US$5.4 billion) in 2020. The Gujarat Cooperative Milk Marketing Federation Ltd., responsible for marketing Amul milk and dairy items, revealed a 13% expansion in its turnover to Rs 33,150 crores in the year finished March 31, 2020. The Amul gathering's turnover surpassed Rs 45,000 crores which are 13% higher than a year ago, i.e., in 2019.

The Amul Federation has accomplished a compound yearly development pace of over 17.5% for as long as nine years because of higher milk obtainment, extension in business sectors, and the dispatch of new items.

Franchise Model

The franchisee will have a prebuilt shop/space in a good location either owned or rented. The franchisee is expected to bear the entire cost (viz. interiors and equipment, excluding property cost) of setting up the store which is expected to be in the range of Rs. 1.50 lakh to Rs. 6.00 lakh depending upon the format.

Amul's wholesale dealers will supply stocks at the parlor and the franchisee will avail retail margin. Retail margins will vary from product to product. Franchisee need not pay any royalty or share any revenue with Amul.

The working capital requirement would be extra depending upon sales volume. Expected monthly sales turnover will vary from place to place depending on the location of the parlor. It may be in the range of Rs 5 lakh to Rs 10 lakh per month, stated Amul in its official release.

Types of Franchise Model

Amul offers various types of franchisees. For Amul Outlet, Amul Railway Parlor, or Amul Kiosk, one has to invest about Rs 2 lakhs. Out of this, Rs 25,000 is non-refundable brand security, Rs 1 lakh is spent on renovation and 75,000 rupees is spent on equipment.

For the second franchisee, Amul Ice Cream Scooping Parlor, there is an investment of Rs 5 lakh. It includes brand security 50,000, renovations Rs 4 lakh, Rs 1.5 lakh for equipment.

Subscribe Newsletter
Submit your email address to receive the latest updates on news & host of opportunities
Entrepreneur Magazine

For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you

or Click here to Subscribe Online

Newsletter Signup

Share your email address to get latest update from the industry