Amul vs Nandini: The war between two dairy titans

Even before the summer heat turns up to its full swing, the state of Karnataka, at least its milk and dairy market is on the boil. As the country’s largest dairy cooperative Gujarat Cooperative Milk Marketing Federation (GCMMF) - popularly known by its brand Amul - attempts to enter the state, its peer from Bengaluru - the Karnataka Cooperative Milk Producers’ Federation (KMF) - is now in direct fight with the behemoth.

Both GCMMF and KMF are champions of their fields and have a strong consumer recall and loyal customer base through their mother brands Amul and Nandini (KMF), respectively. They both find their origins from rural households in 1940s and 1950s and have, since, grown exponentially.

While Amul is, by far, the largest collector, processor and seller of milk products in the country, Nandini rules the market in Karnataka with equal flair. However, with Amul now attempting to corner some share from Nandini in its den, data shows the aim won’t be easy to achieve. 

Take the two’s pricing, for instance. While Amul is selling 1 litre of toned milk at Rs 54 in Delhi, Nandini’s price is nearly Rs 11 lower - at Rs 43 per litre in its home turf Bengaluru. Amul Gold - the popular full cream milk from GCMMF - currently retails at Rs 66 per litre in the capital, while Nandini’s price is Rs 55 a litre after it reducing pack size recently (see Chart 1).

Price of curd from Nandini stands at Rs 47 per litre, compared to Rs 75 per litre from Amul. There are other products like ghee, butter, chocolate, ice creams etc. where the two are facing each other directly in the Karnataka market for the first time now.

However, by sheer scale of its operations, daily milk collection and processing and number of producer members, Amul beats Nandini at all India level. While Nandini dominates the state’s market completely (see Chart 2). 

One of the key factors behind Nandini’s ability to serve its customers at such low price than Amul is its milk farmers are incentivised by the state government. Founded in 1974 through grants from World Bank, KMF comes directly under the Karnataka’s  Ministry of Cooperation. Started in 2008 with Rs 2 per litre incentive to the farmer by the state government, today its milk farmers receive as much as Rs 6 per litre incentive. This makes its milk and derivative products cheaper than most other larger cooperatives in the country.