AMUL (Anand Milk Union Limited) is India's most popular dairy brand and connects with 15 million milk producers across the country. Amul has had a significant impact on shaping the country's white revolution. Amul is also India's largest food brand, given its extensive line of dairy products such as butter, cheese, paneer, ice cream, ghee, chocolates, cream, sweets, beverages, milk powder, and more.
Aiming for a better future, the Gujarat Cooperative Milk Marketing Federation Ltd. founded Amul in 1946. More than 3.6 million milk producers in Gujarat currently hold a stake in the cooperative, which was established in 2008. Aiming for "Value for Money – Value for Many," Amul was founded to provide quality products at reasonable prices while also valuing farmers and producers alike.
Did you know?
Amul is honoured by the Government of India with the "best of all categories Rajiv Gandhi national quality award".
Amul Franchise Business Model
Amul, the world's largest dairy company, offers business opportunities to those with an entrepreneurial spirit. In a press release, Amul outlined the model as “Anyone with a very small capital base and good business acumen can become our franchisee. It requires very little investment and working capital.”
In comparison to other international dairy brands, Amul's franchise is quite affordable. Anyone with a small amount of money can open an Amul’s franchise. Amul doesn't take a share in the profits made by the franchisees. The setup costs are all that you are responsible for. Interiors, equipment, and inventory will all be included.
Amul has a variety of franchisee options, including Amul Kiosks, Amul outlets, Amul ice cream scooping parlours, and Amul cafés. Depending on the franchise option and location, Amul distributorship cost will vary between 2-30 lakhs. Non-refundable brand security is a small part of that investment.
Why invest in the Amul Franchise?
- Amul has long been the most popular dairy brand in the country. If you associate with the world's largest dairy brand, you'll be able to build your own brand value as a franchisee.
- Amul products are the first choice for every household, cafe, canteen, and bakery shop in the country. Amul caters to a wide range of customers, from all walks of life.
- Amul supplies the highest quality products at a reasonable cost. Amul has a huge network of 36 lakh dairy milk producers dispersed over 18,500 villages.
- Amul has more than 6,000 franchises across the country. The company's annual revenue hovers around ₹10,000 crores. Amul's brand equity will help you run a successful franchise.
- As a result of the company's continued commitment to high standards and quality, your customers will automatically place their faith in you.
- Amul currently holds over 85% of the market share in butter production and over 66% of the market share in cheese.
- Amul keeps its total operating costs under 15%, which is an impressive feat for any company. Operational expenditures consist of the procurement of milk, processing of milk, and packaging of milk.
- Dairy products will always be in demand, and there will be no future substitutes for AMUL or Dairy products. As a result, an Amul franchise has a lot of business potential.
Also Read: Most Profitable Franchises In India
Requirements for Opening an Amul Franchise
You can apply for the Amul franchise by visiting their official website. The requirements to open a franchise are:
- GST registration for billing purposes.
- Registration form with all the relevant documents as mentioned on their website.
- Payment of a non-refundable security deposit ( amount depends on the franchise option you choose)
- Either the franchisee owns or rents a pre-built shop/space in a good location. The franchisee is expected to bear the entire cost of setting up the store, which is expected to range from ₹1.50 lakh to ₹6.00 lakh depending on the format
- Investment for equipment which includes Deep Freezer for Ice Cream, Milk Cooler for Fresh Products, Visi Cooler for Dairy Products, Oven for Frozen Pizza, Cone Holder/Topping Tray For Placing Sauces, Waffle Cone Machine, POS Machine for billing, and Scooping Cabinet for Ice Packs with SS Bowls
The stocks/inventory is supplied by Amul's wholesalers, and the franchisee gets a retail discount. Depending on sales volume, additional working capital may be necessary. Expected monthly sales turnover will vary depending on the parlour's location. Depending on the product, retail margins are different. The best part is that Amul does not require any royalties or revenue sharing from the franchisee.
Investment Details
Amul offers many different franchisee options. You can select a category based on your needs and financial resources.
1. Amul Kiosk
The Amul Kiosk, also known as the Amul Preferred Outlet, is a small Amul parlour of 100 to 150 square feet. ₹25,000 non-refundable brand security and equipment investment of around ₹75,000 are required to invest in this venture.
2. Amul Ice Cream Scooping Parlour
Around 300 square feet of space is the minimum requirement for the Amul Ice Cream Scooping Parlour. A total of ₹6 lakhs is required, which includes a ₹50,000 non-refundable brand security fee and ₹1,50,000 worth of equipment.
3. Amul Cafe
It will take around ₹30 Lakhs to open an Amul Cafe. 11 lakhs for the kitchen and equipment, 16 lakhs for the space and setup, as well as ₹3 lakhs for a brand deposit, are included in this sum. A minimum of 1,000 to 1,500 square feet of space is required.
In addition to the increased retail margins, Amul also provides parlour boy training, consumer offers, inauguration support, subsidies on equipment purchases, free signage, and so on.
The franchisee, on the other hand, would be responsible for all recurring costs such as employee salaries, rental fees, and electricity costs, among other things.
The total cost of establishing an Amul franchise, excluding the security deposit, ranges between 1.5 and 6 lakhs. Some people who want to open an Amul franchise may find it difficult to come up with the entire sum at once. The government offers the MSME loan program to those who need help with the start-up costs of their business but do not have the necessary funds. People low on finances can apply for MSME loans to cover the setup costs.
Profit Margins
The Amul franchise business model is based on a commission-on-sales approach. Amul franchise profits depend on the product MRP (Minimum Retail Price). The company will sell the product at a lower price than listed, and the profit will be over the MRP. Amul doesn’t take any revenue share or royalties from the franchise.
As a commission, a percentage of the MRP (minimum selling price) of Amul products is paid out. The commission is determined by the product you sell and varies by product.
- It's 2.5% on a milk pouch, 20% on ice cream, and 10% on milk products.
- Amul Ice Cream Scooping Parlour franchisees can expect to make 50% of their revenue from ice cream, shake, pizza, sandwich, and hot chocolate drink recipes.
- Pre-packed ice cream is getting 20% and Amul products are getting a 10 % commission.
Expected monthly sales turnover will differ depending on the parlour's location. According to Amul's official announcement, it could range between Rs 5 lakh and Rs 10 lakh per month.
Benefits & Support for the Amul Franchise Owners
The following are some of the significant advantages of owning an Amul franchise business:
- Amul will supply the entire product line.
- Backlit signage will be provided by GCMMF (Gujarat Cooperative Milk Marketing Federation Ltd.)
- All equipment and branding will be subsidised.
- Inauguration assistance will also be provided by Amul.
- The franchise will receive a purchase discount.
- Amul will provide special consumer offers
- No profit-sharing or royalties.
Also Read: Complete Guide to starting a Subway Franchise in India
Conclusion
The process of acquiring an Amul Franchise is simple and easy to implement. This article gives you all the insights into the requirements of becoming an Amul Franchise, the business model, investment details, and the profit margins.
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