The GCMMF is getting ready for a brand war. But it faces a peculiar problem. Just one of the co-operative unions under the NDDB umbrella, it has several sister co-operatives, all of which have their own brands. The GCMMF itself has a second brand - Sagar. Locally very successful, they however, do not have the resources to take on FMCG multinationals in a brand building, marketing and distribution war.

Says GCMMF's managing director B M Vyas, "We are working towards consolidating all our products under one or twobrands." With Amul being the best known among all the co-operative brands, the next few years will see several more co-operatives manufacturing under the Amul brandname. Vyas is already criss crossing the country trying to get all co-operatives to work together. There is room for negotiation. Says Vyas, "Wherever local brands are stronger than Amul, we will allow that brand to exist and Amul will take a back seat."

But as things stand today, there is no doubt that Amul will win over brands of the other co-operatives. Some milk co-operatives which are just coming into their own have decided to go under the Amul umbrella, rather than attempt a marketing war with Brittania, HLL or Glaxo.

For the GCMMF, this is killing two birds with one stone. Not only does it prevent a proliferation of small local brands that could threaten its monopoly, it also gets a ready manufacturing base in different parts of the country. For a logistics manager, this is a dream come true. Lower transportation costs, and in anindustry where freshness of the product is an issue - an edge over its competition.

But while brand consolidation will take some time (Vyas admits that there are some reservations) the GCMMF is speeding up its own investments. It has bought into a dairy in NOIDA for Rs 60 crore and another one, with a processing capacity of 10 lakh litres a day is being set up in Palanpur. Also on the cards is a dairy in Mumbai. The total investment could run into a couple of hundred crores a year.

Even as the GCMMF is consolidating its brands, things are picking up at home. Following ice-cream, they have started test marketing two new products - malai paneer and mithai. And there is more where those came from. Although the managment is tight lipped, sources say that at least two new products are being developed. According to V.Kurien, one of these is a chikki - but what stage it is at remains unclear.

Says Amrita Patel, the new chairperson of NDDB, "Besides the new products, the existing range will have to beexpanded with new varieties to give the consumer more choice." Like Vyas, she hopes that even these new products would be consolidated under a couple of brand to ensure maximum returns to the co-operatives. "In comparision to the multinational, marketing is one of our relative weaknesses," feels Patel.

With strong multinational competition, the GCMMF has indentified another soft spot - packaging. While Vyas says that the packaging of Amul products has undergone a sea change - unfortunately unnoticed by the consumer - more changes are in the offing.

The GCMMF has its targets worked out. The federation, which did a turnover of Rs 1,885 crore by March 1998, hopes to touch Rs 10,000 crore by March 2005. Also in place will be a distribution network of 75,000 stockists (3,500 today) and 1 million retail outlets (4 lakhs today)

But if you think that all of this - the brand consolidation, expansion - is driven by market imperatives, think again. There is little doubt that its monopoly especially in cheese hasbeen threatened. For instance, today it commands only 50 percent of the market. While Brittania has already dented Amul's market, several others including European majors are on the sidelines. Ironically, Britannia's swift capture of market share is attributed to erratic supply of Amul products.

That this competition, armed with formidable brand building, distribution and marketing capabilities may give Amul a tough fight is not really GCMMF's major concern. The numbers that matter to them are these. It controls 80 percent of the butter market, 65 percent in babyfood, 60 percent in dairy whitener and 90 percent in whole milk.

The GCMMF's confidence comes from a clear understanding of its goals. It is not a corporate, but a milk co-operative. As Vyas says, "Our first loyalty lies with the milk producer. " What that means is that as more farmers enter the co-operative, as yields increase, the GCMMF has to ensure that all that its member's produce must be sold. As Patel says, "We do not have the option ofnot picking up the supply of the milk, which our competitors do." Also the GCMMF has to give a renumerative price for the milk, to ensure its continued supply.

It is this - the suppliers interest, and not competition - that has driven the GCMMF to fight a brand war. The supply of milk has grown phenomenally as the co-operatives mushroomed. Its 19 lakh producer members, pour over 38.52 lakh litres of high quality milk into its dairies every day - a feat no competitor will be able to match in years to come.

It's production profile therefore is also driven by different factors. Vyas admits that the largest margins are in whole milk which contributes to 50 percent of the turnover, followed by milk powder, butter and cheese. Increasing its share in fresh milk is therefore a priority. The other products - aimed at ensuring that what cannot be sold as fresh milk, is regardless sold - is what drives the marketing strategy.

Therefore the brand consolidation, the new product launches.

While GCMMF's unmatchedsourcing system, by far its single most important edge over competition, is what keeps it ahead of the game, it will have to acknowlege a fast changing environment. While it has already tasted failure in chocolates and Nutramul, the big fight will be in products that Amul has launched recently - ice-cream, paneer and mithai. Up against companies like HLL and Brittania who are disturbingly familiar with consumer phyche, Amul's top management might have to see competition as more than just incidental to their goals.