- What I believe in most Karm Kar. Phal Ki Chinta Mat Kar
- Success has come to me because of... The unshakable faith of farmers in us
- The best decision I ever took Joining IRMA
- My strength Can predict how much milk Indian cattle will produce next year!
- My weakness I am a doodhwala. I only know and understand milk!
- Best advice ever received Dr Kurien told me: “Never try to short-change consumers, they are always smarter than you!”
- My sounding board My wife Devender and Kishore Jhala
- Most touching moment When 10,000 widows from Banaskantha said Amul gave them identity and livelihood
- Relaxation time With Myrah, my granddaughter
- What I tell my kids Success has no short cuts. It’s all about hard work, perseverance and patience
- My big blunders Have committed one too many... Like not putting the right name to a face, and that includes my wife as well!
- What I dream of Amul becoming the largest dairy brand in the world
I was seven years old when I saw electric lights for the first time. Village Ratta Khera Bhai Gulab Singh had no such amenities — no power, the school was a single room and the nearest pucca road was 5 km away. You had to go to Firozpur, 20 km away, to catch a bus. That’s how we had left the village after the 1965 war, to come to Delhi. After the wide, open spaces of rural Punjab, our one-room-kitchen home in Delhi seemed very cramped but, it had electric lights!
As soon as the municipal school in RK Puram Sector shut for the summer, my family would be back in Punjab. Days in the village would start early — my grandfather would wake me up at 5 am and make me fetch water from the well. After I cleaned the poultry farm, I would head to the field to help with the paddy harvest. While my classmates in Delhi relaxed, I would be helping my grandparents and aunt look after our land. Dadaji had been a thanedar before Independence and was consequently, very strict; but even he relaxed under the kikar tree after lunch. That was a luxury, even though we had to shift our charpoy every time the sun changed direction and couldn’t have uninterrupted sleep for more than half an hour.
Despite all the hard work, life in the village was simple, uncomplicated. Labour was not easily available, so we turned to each other for help. If the canal near our house had to be cleaned, we would ask our neighbours to lend a hand. In return, we turned up when they needed something. This was simple barter of labour, called vagaar in Punjabi. The bonus was that if there was a chore at a neighbour’s house, they would feed you. And it was always fun to have a meal in other people’s homes.
There was only one large shop in Ratta Khera, catering to all 200 families in the village. The youngsters would be sent to Munshi di hatti to buy vanaspati, sugar and other provisions. After paying Munshiramji, we would hold out our hand and ask, Chunga kahan hai? (Where is the freebie?) And he would immediately give us some small treat, say an orange candy, a little extra for having run the errand.
As far as academics was concerned, I wasn’t a very good student. I preferred spending my time playing kancha, chaku, pithu and gilli-danda. I studied only when I was bored of playing. No one was surprised, then, that I scored only 55% in my Higher Secondary examination. I sat for the NDA entrance exam but did not make it. I did have a distinction in Mathematics, with 78%, which helped me gain admission in BSc (Mathematics) at Kirori Mal College.
A couple of days before college started, my friend Sanjay Mehta came home with a newspaper advertisement. It was for admission to an agricultural engineering programme in Udaipur. Sanjay egged me on to apply, telling me there was a quota for non-Rajasthan students. He wasn’t applying because he wanted to go to Canada, where his sister lived. Without any expectation of getting through, I applied for the course. Surprisingly, I made it through.
Knowing nothing about agricultural engineering or what it would entail, I made it to the College of Technology & Engineering in Udaipur. I was very upbeat as we were guaranteed a job on completing the course, the campus was beautiful and then, the icing on the cake — I was given a single room all to myself in the hostel! As the months passed, I also changed as a student— now I was working hard and had a grade point average of 3.25, placing me among the toppers of the 50-strong batch. In fact, I liked the course so much, I was keen on studying more, even if there was no job assured on graduation. My options included the M.Tech degree at IIT or the agribusiness course at IIM Ahmedabad. I didn’t clear the IIM interview — I think partly, it was because of my broken English.
Around the same time, IRMA released an ad for the first batch of its new course. On completion, there was an assured job of Rs 1,200 per month and also a monthly stipend of Rs 600 during the course. It seemed like a good deal, so I applied and got through. At 22, I had never interacted with girls socially and this batch had students from top institutes such as BITS Pilani and St Stephen’s College — both boys and girls! So, IRMA was a culture shock, but a welcome one.
The course was an interesting one and I even got to interact with iconic personalities like Dr Verghese Kurien and Tribhuvandas Patel. Many of my classmates joined IRMA only because they were so inspired by Dr Kurien. I remember asking him just before job placements what he looked for when recruiting for NDDB or the Gujarat Co-operative Milk Marketing Federation (GCMMF). He said, “I look for three things — integrity, integrity and integrity.” There was sound logic to that. Dr Kurien pointed out that all of us came from good colleges and were equally well educated. If we were to work for a farmers’ organisation, where many would not be literate, it was important to have people who would not manipulate them or take advantage of their illiteracy.
At the time, 1981, the National Dairy Development Board (NDDB) wanted to develop a cooperative model such as Amul for which it had set up a team of experts in production, procurement and sales and marketing. From my batch, six people were selected for two months of fieldwork with the spearhead team.
We were placed in six different villages in Kolhapur district. I was assigned to Charan village where I had to help in developing the cooperative. I identified the problem almost immediately. There was a middleman operating in the village who procured milk from the farmers and sold it in Kolhapur at a huge profit. For the Amul model to succeed, he would have to be removed, which would not be easy. My village upbringing and a degree in agricultural engineering made me very comfortable working with farmers and I was able to get close to the middleman to learn everything about milk testing. He remained unaware of the Amul initiative even as I continued to work with the spearhead team. For those two months in Charan, my home was the local temple and my meals came from the sarpanch’s home. I would hold meetings almost daily with the farmers and talk to them about the Amul model. In around 25 days, the Amul model was ready and the middleman was eliminated.
A second fieldwork project at IRMA was in Punjab Markfed, on agri inputs and marketing. My job was to come up with an alternative structure. A survey was conducted and I prepared a project report— essentially, it was a single graph. I showed that while fertiliser sales were increasing every year, market share was falling; that is, sales were not growing as fast as the market. This was shown to the then MD, Rajan Kashyap. My recommendation was to open farmer centres at the taluka centres for fertiliser and agri inputs. Mukesh Bhargava, who was then my mentor, also liked my report. He later moved to the US to teach but would always say my report was a case study in his class. That project gave me the confidence to go after the big things.
Campus placements were on and I knew what I wanted. My desire was to work with farmers — besides, I thought, marketing was a bit Hi-Fi for someone like me. As expected, NDDB came to IRMA for recruitment. The position was for an assistant executive. I was confident I would be selected and did not apply anywhere else.
The interview went off well and I got selected. The panel asked me if I had any questions and I still don’t know what came over me. I pointed out that I was an agricultural engineering graduate, unlike my classmates who had only BA degrees. I was their senior by two years and should, therefore, get a better designation. The panel instantly said that would not be possible and asked me only one further question: “Are you then saying you will not join if you don’t get that seniority?” I said yes. Needless to add, I did not get the job.
It looked like one of the best students of the batch would be the only one without a job on graduation!. Then, my classmate Shrikant Purkar, who was from BITS Pilani, told me GCMMF had a vacancy in Jaipur. By now, though, I had also become a little smarter. My parents had recently moved to Banswara, 30 km from Udaipur. On the application form, I changed my native place to Banswara. That was enough to be selected. Only one problem — I had zero interest in sales and marketing.
GCMMF was going to open a depot in Jaipur and needed someone there. But my first posting was in Ahmedabad. It was a very interesting — even historic — time to join the GCMMF. We were the first batch of MBA’s GCMMF had recruited. There was a lot of work to be done. Those days, Voltas was distributing Amul products under its pharma consumer products (PCP) division. Dr Kurien wanted that to change and have GCMMF handle marketing and distribution. He had recruited a Voltas man, JJ Bakshi, for this. Bakshisaab was a Gujarati and he wanted all of us to adopt a similar, commercially-oriented mindset. “There are plenty of smart people but very few have the nose to smell money,” he always told us.
My job was simple — I had to set up the depot and take over distribution from Voltas. Those two months I spent in Ahmedabad straight out of IRMA were fantastic. My learning curve was so sharp; I moved from desk to desk, learning everything from accounts, invoice, stock, ledger, octroi and sales tax. It was learning by just observing; and I still have my handwritten notes from those days.
After my initial training in Ahmedabad, I travelled around the large centres in Rajasthan in the company of Bhargav, who was in charge of those centres. He would typically spend 20 days at the Ahmedabad office and the rest of the month in cities such as Jaipur, Jodhpur and Udaipur. What an experience the first tour was! I travelled by first class and stayed in a hotel for the first time. It was a pleasure to order food in a restaurant without even looking at the right hand column of the menu — I ate like nobody’s business.
I was to join Jaipur as a senior sales officer. There was already a sales officer named Rajiv Verma, who had joined GCMMF after eight years with Bata; in contrast, I was just 23 years old, fresh from my MBA with zero work experience. I was told he would receive me at Jaipur station. But he didn’t show up and I made my way to an IRMA classmate’s relative’s house. As it happened, Verma was their neighbour and I met him later the same day. He was good, very dignified — presuming he was going to be in charge.
I would go with Verma on his Bajaj scooter to meet distributors; he would always introduce me as his colleague. I was taken aback initially but after spending some time with him, I learnt my first lesson — workwise, he was better than me. From him, I learnt how to draft letters, how to speak over the telephone. I would have to prove myself. That opportunity came some eight or nine months later. Blue Star had introduced a concept calling walking cooler as an improvement over the traditional cooler. Our head office had recommended buying it. During my project work at IRMA, I had learnt a lot about coolers. I made a proper analysis — both technically and financially — and presented a PERT chart to Mr Padmanabhan, the distribution manager, demonstrating that the new technology was not necessary right then, given the costs involved. It was only after this that Verma really accepted me. Even today, I tell new recruits that you cannot command respect because of a degree. Only your work can give you credibility.
There was a key difference between Verma and me. My strength was in sales analysis, whereas he was excellent in communication. We went on to become good friends and made a good working team. I learnt several field-related skills from him, also one big HR lesson — it’s not enough to command respect, your teammates also should accept you. You cannot create a team by authority.
Life in Jaipur was comfortable. My salary was Rs 1,450 per month and I had an office in the DGP campus that also doubled up as my home and GCMMF’s warehouse. I got to travel by air for the first time when Bakshisaab came to Jaipur and I accompanied him to Jodhpur to sell ghee. A couple of years down the line, by which time I was married, I moved to Ahmedabad as assistant manager in sales.
Salary levels in GCMMF were very low. Even though I got promoted as area sales manager, I was still getting only a third or even a quarter of what someone at my level in an FMCG company was making. We had just had our first child and had to be careful about our finances. As it was, we continued to depend on our parents for the big expenses. In Jaipur, I bought a second-hand scooter, for which my mother gave me the money. In Ahmedabad, my first car was a second-hand Fiat which cost Rs 37,000. Here again, my parents and in-laws helped pay for it.
I had signed a bond when I joined GCMMF stating that I would work for three years and refund the stipend if I quit before that. In 1985, I completed three years and started looking out for a change. Hindustan Lever had advertised for the position of area sales manager for Lipton brand. I was selected in the interview but, when the appointment letter came, my designation was of a territory sales manager, a level lower. The salary was three times what I was making, though. I asked my wife what I should do. She had only one question for me: “Will you be happy if you accept this?” That was enough for me to say no. Some time later, there was a job offer in Nigeria, but I rejected that as well as I just did not feel comfortable.
Now I understand that all these decisions were for the best. I am a believer in destiny. I didn’t get through the NDA entrance. If it hadn’t been for Sanjay Mehta, I wouldn’t have gone to Udaipur. If there had been no Udaipur, there would have been no IRMA. If IRMA had not been there, there would have been no Amul. If I had taken either of those jobs, I would not be here today.
Promotions at GCMMF took time. When I became group product manager, it was a marketing-in-charge responsibility. Of the six sales managers, only two of us were promoted. When I became the chief general manager, there was no post like that. If you were a general manager, you then became the managing director. It was at a board meeting when chairman Kurien suddenly asked me how long I had been with GCMMF. The existing MD had six years for his retirement and the CGM designation was created for the first time. A larger role was in the works for me.
When you have a career spanning 35 years, you deal with your share of challenges. You have to accept them and face them with strength. Two, in particular, were difficult and the second one really made me restless and worried.
The first challenge came up in 2010. I had been made MD-in-charge after the existing MD quit the position after a lengthy innings. Things had become difficult even before he had left. He was promoting those close to him; so he wanted to remove me and was acting against me. Luckily, the board was impressed with my performance and on January 1, 2011, I was appointed as managing director for five years.
Personally, I was confident of managing this situation. I had the cooperation of so many people, from department heads and managers to field staff. What I discovered from this episode was that people are loyal to the organisation and not to individuals. Amul is a vast, spread-out organisation — the unifying factor is the organisation, not any single individual.
But the real challenge came in 2012 when a new chairman was appointed. The person who took over was of questionable integrity and he had the support of the old MD. For me, he was the elected chairman and I did not know how to fight such people. I was very restless and I spoke to my mother who quoted a verse from a Gurbani — Deh siva bar mohe eh-hey subh karman te kabhu na taro. Na daro arr seo jab jaye laro nischey kar apni jeet karo. (Bless me so that I don’t fear doing good deeds). I took great comfort and reassurance from that. A conversation with my wife also changed my outlook. She said the worst that could happen was that I would lose my job. “You will get a better job,” she said with confidence.
It is a difficult situation when the MD and chairman are fighting. The new chairman asked me to do certain things that I refused point blank. He offered me various inducements and later, when I refused those, it was all about threats. But I stood firm and also did not allow him to take the decision since it was not in line with the by-laws. Eventually, he took those decisions and I informed the board. They realised he was not good for the organisation and for the first time in the history of GCMMF, a no-confidence motion was passed. There was no provision for that in the by-laws but it happened!
Every time there is a dilemma, I think of what Dr Kurien would have done in that situation and do exactly that. I have learnt the importance of value systems in my 35 years with GCMMF. I remember an occasion when one of our chairmen wanted to oblige a political party and decided to highlight the achievements of a prominent leader using our media properties. I was in a fix — he was my superior but this was against the organisation’s value system. I tried explaining why we should not be taking such a step. Our advertising budget is less than 1% of our sales but that itself was hundreds of crores. How can money that has come from the farmers be utilised for someone’s personal gain? I discussed the issue with my colleagues and then refused to follow that directive. Obviously, he was angry but I was firm.
Professionals at GCMMF are given a lot of freedom. There are farmers on the board but they do not question the board; big investment decisions are taken in a matter of minutes. The only question asked is: will it benefit the farmers?
When I joined Amul in 1982, its turnover was only Rs 121 crore. Today, it’s up 231x. All this has been possible because of the freedom we were given. I believe that anybody can give good ideas. Dr Kurien always said you must ask a youngster first and you will get an independent view. If you ask the senior first, the junior’s view will be influenced. The Amul culture is to have an open door.
In fact, the trigger to launch ice creams came from outside GCMMF. We conduct brand health studies every year through agencies like IMRB. In one survey in 1995, there was a remark from a customer — why doesn’t Amul, the largest dairy of the country, launch ice-cream, when soap manufacturers are doing the same? That really caught my attention. During that period, ice-cream was reserved for the small sector and this soap manufacturer entered the industry only after acquiring one of the established players. When we approached Dr Kurien with the idea, he just said, go ahead.
We started with a small factory at Baroda, which already had an SSI licence. We told the government that Amul was nothing but an organised representation of small producers. The government then relaxed the small sector condition.
Our biggest advantage is price and nobody can beat us there. We have to buy milk at the highest price and sell the finished products at the lowest price. This has really helped us. When we entered the ice-cream business, we first studied the pricing strategy of existing players. A 100 ml vanilla cup that includes only milk, sugar and flavour ought not to cost more than Rs 3 to the customer, including all expenses and margins. But the selling price was Rs 10! Similarly, cones that were selling at Rs 18-20 ought not to cost more than Rs 10 as per our calculations. I was stunned by the margins. Our strategy for the product launch was to hire outdoor hoardings showing the brand and product but not the price. That was disclosed only on the launch date. Our price for a 100 ml vanilla cup was Rs 6. Within a week of the launch, we had to airlift an ice-cream line for commissioning at the Amul Fed Dairy in Gandhinagar! The rest is history.
The open-door culture is very important because I have found that ideas can come from anywhere and at any time. A small observation can become a big opportunity. Last February, I was in Dubai for the Gulf Food Fair. It’s common to come across many new products every year at this fair. This time, I saw packed rasmalai and was curious to know more. As it turned out, it was made by a Canadian company and sold in Dubai. If a Canadian can sell an Indian sweetmeat, Amul should also do it.
I returned to Anand and told my team about this. In three months, we launched the first packed rasmalai in India. It was very hygienic and there were no concerns about freshness — both of which are not guaranteed when you buy dairy-based sweetmeats from the neighbourhood mithaiwala. We now sell 50 tonnes of rasmalai every month.
It is also possible to convert a prevailing problem into an opportunity. In 2012, a general manager of Indian Railways came to my office at Anand. He first said our Kool flavoured milk was very popular, but there was a problem. I immediately thought he was about to raise some issue of quality. He went on to say that passengers drink the milk but throw the glass bottles on the tracks. “My men’s feet get hurt because of this,” he complained.
Something had to be done. As it is, we were not able to meet the rising demand for the product due to bottle-related constraints. Both, the channel partners and consumers, were finding the glass bottles difficult to handle. We started looking at alternative packaging options. PET bottles seemed a possible solution. It was a risky proposition, though — our study showed that India was one of the few countries where milk had not been launched in PET, so we couldn’t be sure how it would be received in the market. Also, a PET bottle production line would cost Rs 100 crore; at that price, we could set up an entire new dairy! I was sure competitors would not be willing to invest that kind of money; it was too much of a risk for them. The objective of launching PET bottles was to be different and also cause a disruption in the market. I was convinced of the soundness of the idea but would the board agree to such a huge investment? As always, though, the board was supportive and gave the go-ahead immediately.
The plan was to manufacture Amul Kool in the peak season and use the same plant to bottle lassi in PET bottles in the off-season — we had launched lassi in a small way back in 2003. The production line was ready and offered us much flexibility. Kool in PET bottles was a super hit, but something more had to be done with lassi.
I knew packaging could change everything — it gives you room to be innovative and is also a big entry barrier for competition. It had worked well for Kool and lassi. But lassi needed its own identity. The category had not yet been exploited as a business opportunity by anyone. We decided to use Tetra Pak, with a difference. We chose to launch lassi in Tetra Pak edge (boxes with a lid on the top), offering convenience and a unique look. Now, PET bottles for lassi have been phased out, while Kool is sold in PET, glass and cans. Together, both sell two million units a day now, up from 300,000 units seven years back.
Milk is a sensitive issue. Increasing the price of milk is always difficult, but it has to be done. A multinational can justify a price increase but we cannot. The reason is our objective — our price discovery is not aimed at a better bottom line but to ease the burden that our farmers face in producing milk.
In 2012-13, we were planning to increase milk prices in a state where elections were due. The chief minister called me and said he would lose the election if the price was hiked and requested me to postpone it. I promised to speak to the party president. I then explained that a price reduction is not possible since 85% of the price goes back to the farmer. He listened patiently while I explained the cooperative structure. I made one promise — when prices are increased, I will release ads in the paper with a proper explanation. He agreed.
We cannot say no to farmers when they come to us with milk. In winter, this is a challenge since there is a 40% growth in milk procurement but consumption remains consistent. Usually, we convert excess milk into commodities such as milk powder and white butter that are sold to big dairy plants such as Mother Dairy. As milk procurement increased, we started depending more on these dairies. They realised they could now bargain for a better price since we were under some pressure. We had to cooperate since Dr Kurien was the chairman of both Amul and NDDB, and Mother Dairy is a part of NDDB.
In 2004, Britannia launched liquid milk in large metros. We were worried since our position was to be challenged. NDDB, by now, had a new chairperson. We realised Mother Dairy would also find it difficult to fight Britannia. To reduce our dependence on commodities, we launched liquid milk as well. We had a long-term understanding with Mother Dairy and this was a difficult decision. We sold our milk only in places where they were weak. We started with the outskirts of Delhi — and some congested areas. Milk was delivered by rickshaws and cycles here.
I was then General Manager and stationed myself in Delhi for three months during the pre-launch period. A day before the launch, my father-in-law passed away and I had to rush to Chandigarh for the last rites. I returned in a day, missing the launch conference but not the first despatch of milk from the plant. We hired Kwality’s dairy plant and there were some labour issues initially. I remember loading the trucks with crates with my team. It was very satisfying. This was a big hit and volumes kept increasing. In two months, we achieved a sales volume of 300,000 litres per day and by 2009, we were the market leader. Within six months of our launch, Britannia withdrew from the market! Most importantly, Mother Dairy did not lose volumes. Both, Amul and Mother Dairy, benefited. After the success in Delhi, we launched in Kanpur, Lucknow, Mumbai, Kolkata and Pune. We used our learnings from Delhi and that helped us greatly.
Consistency is important at all levels. This is my first job. So is it for COO KM Jhala, marketing head Jayen Mehta, and Manoranjan Pani, the head of sales. All of us have spent at least 25 years in the organisation. There is an Amul DNA and we have stuck to it. In today’s world, people come from different companies and imbibing that DNA becomes very difficult. It takes decades to align people’s DNA with that of the organisation’s DNA. At the same time, it does not mean we don’t change with the times.
We will also need people to remain in the villages and look after the land and cattle. That’s a bigger problem. Tomorrow’s generation will need to stay in villages and will have to wake up early. They need to work 365 days. How do we make this cool and sexy? For that, it also has to be commercially lucrative and glamorous. We are training youth, but it is not easy...
Cooperatives have succeeded because of selfless and dedicated political and professional leadership. Amul worked because of people such as Tribhuvandas Patel and Dr Kurien. Where do we have people like that today? For the future, we need committed professionals and that is the biggest challenge for public institutions. Because whatever we do, farmers’ interests have to be protected.
In all these years, whenever I am on a flight or a train or at any gathering, someone will start a conversation by asking what I do. I first say, Main to doodhwala hoon and then add that I work for Amul. I never mention my designation. Usually, when I say Amul, people respond by saying they love the Amul girl advertisements.
Show me any other brand that is known for a character? You say Maruti, you think of cars. If you say Sony, the association is with TVs; and with Apple, it is the iPhone. But Amul is always about the girl. You need a unique creative and unique media selection; it doesn’t take big investments to make an impact. Our ad expenditure is 1% of sales, of which only 4-5% is spent on the Amul girl.
The ‘utterly butterly’ line has been in use for 50 years. Our ad agency follows the principle of GCMMF, that is, freedom for professionals. Amul butter is always a topical ad and we see it at the same time when you see it. There is no approval from us before the hoardings and print ads appear.
There have been some memorable taglines of other brands — such as “Hamara Bajaj” and “I love you Rasna” — but they have vanished. In the case of Amul, the campaigns “Taste of India” and “Amul doodh peeta hai India” have been around since the ’90s. The reason is that in the case of corporates, individuals want to leave behind a legacy, while in the case of Amul, it’s a utopian legacy that will continue to thrive.