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All about Iffco''s Vision 2015


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Harsh Patnaik
Co-op Channel for Distribution
by Harsh Patnaik on May 22, 2010 04:07 PM

Wish IFFCO all the very best in their latest venture - Dairy. The model is unique - an integrated farm cum plant and with farmers as shareholders. The success could set the trend for integrated farming in contrast to the ‘Anand Pattern’.

It is however futile to assume that IFFCO's 36000 shareholding co-op societies will be the primary channel to distribute the products. The only processed dairy product that sells in rural India is Ghee. Demand for all others like liquid milk, curd, cottage cheese etc are met locally.

This is not the first time that IFFCO boasted of its 'co-op network'. Tokio Marine joined hands with IFFCO counting on the 36000 co-op society network. The co-op channel sale does not account for even 5% of the total sale. Also as Tokio Marine later realised the societies are share holders of IFFCO and not a network owned/controlled/run by IFFCO. In fact in some states the societies do not even sell IFFCO Fertilisers as they would have been edged by others in the competitive bidding called for by the Registrar.

IFFCO thus should not count on the co-op channel for dairy product distribution (except ghee). Their other rural distribution initiative with Airtel in providing Agri-VAS telecom products to farmers has been doing well and there are many lessons to learn from it; primary being serving customers with relevant products can be profitable business.

Good Luck!!!


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