Both Amul and Nandini are reputable brands with a large consumer following, market share, and income. The second-largest dairy cooperative in India, Nandini, is concentrated in Karnataka and has an annual revenue of Rs 25,000 crore, but Amul is a Rs 72,000 crore pan-India brand. They also compete in markets outside of their native states, including Mumbai, Goa, Hyderabad, and Chennai.
Source: Business Today
It is significant to highlight Nandini’s political buffer. The state government offers incentives to its milk producers, although Amul does not. However, the two companies also work together in the manufacturing process; in Bengaluru, Amul ice cream employs Nandini milk as a crucial raw element. Also deserving of praise is the late Verghese Kurian of Amul, who began establishing co-operative societies with cocoa and arecanut farmers in Kerala and Karnataka. As a result, the Central Arecanut & Cocoa Marketing and Processing Co-operative Limited (CAMPCO) was established in Mangalore, Karnataka, in 1973.
They are where Amul gets the cocoa it needs to make chocolate. Despite all of these factors and the Indian market’s willingness to tolerate different brands, there is still controversy surrounding Amul’s debut into Karnataka and unanswered doubts regarding the political motivation behind the move.Building a trustworthy relationship with local stakeholders is crucial for brands expanding into newer areas, especially when applying for the social licence to operate in those particular local markets.
Simply said, social licence is the acceptance of a company or brand by the neighbourhood. Brands that believe they can buy social approval wind up with damaged credibility. Many businesses in India have experienced public rejection for attempting to purchase respect by merely donating community donations or funding for social development without actually getting involved. Without social trust, emotions ultimately ruin all plans, regardless of sound business or economic logic.
Source: The Indian Express
Stakeholder concerns, feelings of vulnerability, and social insecurities must be addressed immediately and directly. The political environment and regulatory framework must be considered by corporations intending to expand into additional areas. This cannot be avoided and calls for ongoing proactive communication.
Only proactive trust-building efforts and strategic market entry (rather than right before a significant event, as Amul did just before the Karnataka elections) may protect against such controversies. Brands which wish to join a market cannot rush into it without understanding the local cultures, traditions, jargons, and very often dialect. These require careful planning and time investment.
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