Haldiram- The name itself beckons quality snacks. From selling bhujias in the bylanes of Bikaner to becoming a behemoth enterprise in the food industry valued ₹20,000 crore spanning not only all over the country, but also having a tremendous following globally with its 400+ products being available in more than 80 countries. The company has grown at a tremendous pace over the years and in 2017 it was crowned as the country’s largest snack company, surpassing all other domestic and international competitors. The story of Haldiram’s success is of ordinary men achieving extraordinary feats.
The Beginning of Success
In the 1930s, Shri Ganga Bhishan Agarwal, fondly known as Haldiram, started off with a novel family recipe of the traditional Bikaneri Bhujia, and created the famous Haldiram’s bhujia. From the early days of business itself, the young lad demonstrated a knack for marketing by setting the price point such that the product looked more exclusive. He went further by naming it ‘Dungar Sev’, after the then Maharaja Dungar Singh, adding aspirational appeal to the brand.
The business became quite successful with the price of bhujia going up from 2 paise a kilo to 25 paise. It travelled far and wide, with merchants taking it back home and the seeds of a global empire began to be sowed.
Conquering the market
Starting with Kolkata, business was expanded to Nagpur and Delhi over the years. Delhi posed to be a big problem as unlike the other cities, bhujia was not a unique product in Delhi and there was immense competition from established players such as Ghantewala and Bikanerwala. This was supplemented with the tragic event during the 1984 sikh riots in which their shop was burnt. But this didn't stop the brothers from establishing their dominance in delhi.
From the early 2000s onwards, Haldirams has seen rapid expansion, from diversifying its products to include western snacks, Indian sweets, cookies, sherbets etc to convenience foods in the ready-to-eat format including paneer, pulao, dal and vegetables, competing with big brands such as MTR, Tasty Bites & ITC.
Global expansion and collaborating with supermarkets for shell space has enabled it to spread far and wide.
Family Feud
But the immense growth comes with its share of problems as well. Like most family businesses, the Haldiram family was not immune to disputes of inheritance. It split into three branches, Delhi, Nagpur and Kolkata which became separate entities, with operations carried out independent of each other. The only thing common between them is the Haldiram brand name, maintaining different logo styles. They were very successful in captivating the traditional snacks market which is largely unorganised. While the factions continued to fight, the Haldiram’s brand kept growing.
Innovation and unique marketing- Pillars of success
By owning manufacturing facilities, the group lowered the cost of goods sold, estimated to be 45% of revenue like other FMCG brands.
Customer acquisition is done through a vast network of retail stores to penetrate deep into the market. What it uses is a Carrying and Forward agent network, it distributes its products with the widest possible reach, one of their greatest strengths. The Delhi unit of Haldiram’s has 25 C&F agents and 700 distributors in India, while the Nagpur unit has 25 C&F agents and 375 distributors. A testament of their success is that today at railway stations and stalls around the country, the ₹5 Haldiram’s bhujia packet is used as currency, as a substitute for loose change.
With a heavy focus on customer relationships, their marketing entirely relies on good customer feedback. Packaging is also an important aspect of Haldiram’s product promotion. Since namkeens are impulse purchase items, attractive packaging in different colors influences purchases.
Company Philosophy
Haldiram’s philosophy towards their product remains simple. They make quality products and let the products speak for themselves. Products are offered at competitive prices in order to penetrate the huge unorganized market of namkeens and sweets. Thus its pricing strategy has taken into consideration the price-conscious nature of their primary targeted consumers ie average (middle-class) Indian
Using 5 different packs sizes it was even able to price products as low as Rs. 5 to cater to segments with lower disposable income.
What lies ahead?
The success of the very desi brand resulted in the second-largest snack food company in the world wanting a bite.
Breakfast products giant Kelloggs recently showed interest in partnering with or buying a stake in Haldiram’s (Nagpur and Delhi enterprises), valuing them at $3 billion, quite similar to PepsiCo. But due to family issues, merger and future financer looks tough thus an IPO looks to be the only viable route for the company to raise financing in future.
The recent venture with the second largest bakery chain in the world, Brioche Dorée, is proof that Haldiram’s is set on broadening their reach. For the first time, the bakeries will only be serving vegetarian food tailored to the Indian market.
It also plans to invest in Frozen Bottle, a QSR chain that sells milkshakes and desserts depicts a keen risk-taking appetite to venture into newer product categories.
Ambitions for international expansion have driven them to set up a state-of-the-art factory in London to serve the demand for Indian sweets in Europe. This model if successful is planned to be implemented on other shores as well.
A look at the recent company performance
In 2017, Haldiram’s was crowned as the country’s largest snack company, surpassing all other domestic and international competitors such as PepsiCo, Balaji, Pratap Snacks. Haldiram’s posted sales of INR 4,224 Cr in the year.
Data of 2015 In 2014 it was ranked 55th among India’s most trusted brands. Despite constant disputes and break-ups, it managed to retain a market share of 25% with a total turnover of Rs.400 Crores and a brand valuation of Rs 1,500 crore. Haldiram crossed the $1 billion sales mark during FY19 in India after business doubled over the past four years. While it also runs restaurant chains, packaged snacks contributed over 80% of sales for the market leader. Last week, India’s namkeen industry held a convention commemorating annual sales of INR 1 lakh Cr ($14Bn), led by snacks giant Haldiram’s.
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