Amul To Set Up 4 Pizza Factories

Gujarat Co-operative Milk Marketing Federation (GCMMF), the owner of the Amul brand, is planning to set up four pizza factories in the four regions of the country with an aim to sell at least 300,000 pizzas a day within a year from now.

"The pizzas will be sold under the 'Utterly Delicious' brand name," said B M Vyas, GCMMF managing director.

Next month, the dairy cooperative is also expected to launch chocolate flavoured milk under the 'Amul' brand name to take on the existing players like Britannia Industries which sells the product under the Milkman brand. Amul flavoured milk will be made available in 100 ml and 200 ml sizes of hard paper packs (popularly known as tetra-packs), GCMMF managing director B M Vyas said.

A pizza factory adjacent to its ice-cream manufacturing unit at Gandhinagar, Gujarat, is already ready.

GCMMF proposes to make and sell pizzas in frozen form through the retail network across the country. The logistic costs involved is minimal since Amul is already using a cold chain to transport Amul butter, cheese and a host of other milk products -- to some extent ice-creams -- within the country.

"We intend to sell at least 300,000 pizzas a day one year from now. To be able to meet such demand, we will have to increase our capacity. We are planning to set up three more pizza factories, one each in the eastern, southern and northern parts of the country," Vyas added.

At present, GCMMF is collaborating with several retail stores at the local level to sell pizzas. While GCMMF is providing the store owners with its pizza cheese, the base and vegetables that go with it is being procured independently by the retailer himself. Amul has also allowed the retailer the use of the Amul brand name. Each pizza sells for Rs 20. Vyas claims he is already selling 20,000 pizzas a day.

"We are showing the world how to make pizzas. Our initial idea was to promote our cheese. But it struck us later that we can make immense business if we can make and sell pizzas as well. The current business model -- selling Amul pizzas through the local stores -- will help us promote our cheese to a large extent since the customer will also learn how to make pizzas at home at a minimal cost of around Rs 6-7 each. Demand for cheese is bound to grow," Vyas added.

Another official explained that the existing model, however, does not permit Amul to offer standardised products. The size may vary, so will the taste. There will be no standardised variety either. Hence, a pizza factory will help sort out these problems. The image of the brand itself will be largely enhanced. Demand is expected to be high as the pizzas at Rs 20 each will not only be cheaper than competition from Dominos, Pizza Hut, Pizza Corner or Nirula's (the latter is also launching frozen pizzas), it will also be available at any retail like which stores Amul dahi or Amul butter.

GCMMF is also the largest player in the ice-cream market and is increasing its presence in the chocolates market with new launches after its alliance with Campco. It also claims to be the leader in the pasteurised milk market.

Vyas said he will launch Amul chocolate milk next month. "But this is a low volume market. Our aim will essentially be to make our presence felt in this segment while also reigning in the prices," he added.