A social media post from dairy giant Amul on its foray into the milk and curd category in poll-bound Karnataka via e-commerce channels has landed the brand in controversy.
A section of people from Karnataka have expressed their angst and concern over the adverse effect Amul’s entry will have on homegrown dairy brand Nandini from the Karnataka Milk Federation (KMF). For the past few days hashtags like #SaveNandini #GoBackAmul #BoycottAmul were also doing rounds on Twitter.
Opposition parties have alleged that the current government is intending to kill the local cooperative sector by not blocking Amul’s entry. They also added that Amul’s entry will lead to an unhealthy competition which in the long run will destroy the cooperative systems.
— Amul.coop (@Amul_Coop) April 5, 2023
All sorts of opinions including the politically driven have been doing the rounds. Comparisons on price have also been made, before it was announced that Amul is not entering Karnataka (for fresh dairy products).
450ml ge 29, nandini 500ml ge 23.
Nandini samrudhi(purple packet) gatti haalu 500ml 24.
Priya kannada naadina janare neeve yoochisi…. pic.twitter.com/YQ6hBifHbj
— I'm a Student (@CHIRAGR12710734) April 7, 2023
Nandini’s premium milk product is sold at Rs 44 per litre and Amul’s at Rs 54. Amul’s pouched curd is priced at Rs 66 per kg and Nandini at Rs 46.
In an interview with Deccan Herald, Jayen Mehta, MD, clarified saying that the objective of the social media posts was to inform that soon people of Bengaluru would be able to buy fresh Amul milk and curd through e-commerce platforms. The brand has also been receiving a lot of enquiries for the products, hence Amul’s milk and curd will be available online. He had added that any manufacturer can sell products anywhere in India as the country is an open market and such a sale cannot be opposed. This was of course before it was announced that Amul will not make the foray.
Industry watchers believe that it is a politically driven controversy with an intention to grab headlines stoking Kannadiga pride ahead the upcoming state assembly polls.
We posed the question: Will Amul’s push in fresh dairy dent brand’s equity in Karnataka?
Lloyd Mathias, Business Strategist and former marketing head of HP Asia, said, “I don’t think so. Milk as a product is very unique. Amul is a national player which is based in Gujarat. Similarly, there are several milk cooperative federations in different states. Karnataka has Nandini, Haryana has Vita, and each of them have their competence in specific geographies. Nandini is very well entrenched in Karnataka. Secondly, as I understand Amul has only entered the packaged milk category. The real challenge will come when they enter the fresh milk category, which I believe is not in their plans right now. The products they have launched will only go through e-commerce and quick-commerce channels.”
Ramanujam Sridhar, Founder CEO, Integrated Brand.Comm and author, thinks that the whole Amul vs Nandini controversy is engineered as the legislative assembly elections are round the corner.
“Everybody is looking for the headline space. If the entry of Nestle is allowed, why can’t Amul enter the Karnataka market?” asks Sridhar.
He added, “As a consumer the more choices I get, it is better for me. I have been living in Bangalore for the last 42 years and every house will have a Nandini milk packet at their doorsteps in the morning. They have successful products with a successful distribution network. Every street corner will have a Nandini outlet. In fact, other brands like Hatsun and Heritage are available in Karnataka. I don’t know why a well-entrenched brand like Nandini should feel threatened with the entry of another brand. Amul is the pioneer of the cooperative dairy movement in the country. I believe people who are talking are not aware of the history and the controversy will die down once the election is over.”
Ramesh Narayan, Founder, Canco Advertising, also believes that the controversy is a political fight and has nothing to do with the market realities.
“Karnataka Milk Federation has been operating under the classic co-operative model in Karnataka since the mid-seventies. Its fresh milk is hugely cheaper than the milk Amul sells in Gujarat or Delhi. The consumer isn’t a moron. In this case she is actually your wife. I am confident that consumers in Karnataka will make a considered choice based on ease of availability, price and quality. My impression is that the Nandini brand scores well on all these three points. Given the fact that we have a free market for every other product, why are certain people so scared that Karnataka users will shift en masse to Amul without a proper reason to do so? The only reason for this political hysteria could be that certain politicians feel that if the electorate was so naive as to vote for them, they might be equally foolish in their purchase decisions. Personally, I am confident that this is a purely political fight. It has nothing to do with market realities,” he said.
Whatever the reason, will it hit sales of Amul butter and cheese in Karnataka?
Sridhar said, “Amul is a well-entrenched brand. Their butter and cheese products are popular and I don’t see Nandini equivalent to that. At the end, these are all Indian products and these sorts of differences are man-made. Ultimately, the consumers will be the driving force.”
Mathias added, “The polls are around the corner and its unavoidable politics. There will be a little bit of hue and cry the politicians will make, which will not have any impact. Amul cheese and butter are well-established products with high brand equity.”