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Haldiram's - An icon in Indian food processing industry
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Thursday, 16 December, 2004, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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kaner, Haldiram's was the first to lay emphasis on packaging and presentation of its ready-to-eat snacks. The company with a turnover of Rs 400 crore and a brand valuation of Rs 1,500 crore, is now divided amongst three factions of the family, with strictly outlined territories for each unit located in Kolkata, Delhi and Nagpur.
One of India's biggest packaged food brands, with estimated turnover of Rs 400 crore and a self-proclaimed brand valuation of Rs 1,500 crore, Haldiram's transition from a one-counter sweet shop in Bikaner in the early 1940's to a full-fledged Indian snack foods company today has taken a lot of people by surprise. It has managed to succeed in the face of stiff competition from global food giants.
It loathes the concepts of marketing and branding, and yet was the first to brand its namkeens and sweets in the country - and the first to lay emphasis on packaging and presentation of its ready-to-eat snacks.
For the middle-class, Haldiram's brought in convenience and economy through its quick service restaurants. Its namkeens tapped the needs of the lowest common denominator. Says Prabhu Shankar Agarwal, chairman, Haldiram's, "My grandfather Ganga Bishen Agarwal, alias Haldiram, used to serve bhujiyas to his clients nearly 70 years back, unaware that one day he would create history. Later my father Rameshwarlal Agarwal commercialised the brand Haldirams.
Ours is a five-decade-old closely-knit business house which is acclaimed for its unmatched standards in quality, taste, packaging and service. Haldirams is an icon in the Indian processed food industry and virtually controls over 25 per cent of the market share. We now have a Rs 400 crore turnover and are still growing."
Haldiram's as a brand continues to be reinforced in the minds of Indian consumers, despite a history of family feuds. The company was divided amongst three factions of the family, with strictly outlined territories for each.
The Kolkata unit alleges its Delhi and Nagpur rivals breached the contract and set up shop in Delhi in 1991, leading to a bitter court battle and in 1999, it was restrained from doing business in any part of India other than West Bengal.
Though the companies share the same brand name, each claims there's a distinct difference in the quality of products.
The Kolkata unit, which claims sales of Rs 100 crore to the total turnover, operates in a much smaller area than the Delhi and Nagpur units that generate Rs 175 and 75 crore respectively.
Each of the units has a strong international presence with their markets spread across USA, UK, Australia, Middle East & Far East countries, Germany, Philippines, New Zealand, Nepal, Sri Lanka, UAE, France, Spain, Italy, Holland, Japan, etc.
Before 1990, when the company decided to package its namkeens, the shelf life of such products was under a week. Extending the shelf life to almost six months has helped Haldiram carve out a huge market for itself.
Now namkeens contribute almost 60 per cent of its turnover. The Delhi and Nagpur units supply to almost 6 lakh retail outlets. The Nagpur unit has close to 25 big stockists and 375 distributors. However, other FMCG players, with equally strong distribution and higher marketing capabilities, are beginning to get into the business. ITC's just entered the market and Pepsi's Lehar appears to be gaining ground. It's only a matter of time before others muscle in.
The chief executive of the company's Nagpur unit, Rajendra Agarwal, claims that the company's brand value is close to Rs 1500 crore, a figure that he professes to have generated on the spur of the moment.
Analysts say the company's complacence might work against them, especially in the restaurant business where there are many existing local players and few barriers to entry.
In the north, Bikanerwala, Rameshwars, Bengali Sweets, Nathu's, Aggarwal etc have only been showing better growth every year. They believe the company lacks customer friendly systems and convenience ranks fairly low in their scheme of things - the outlets have no seating arrangement for the elderly, there's insufficient parking space, service is hardly ever done with a smile.
The company has started addressing most of these issues. Its newer restaurants have more space and can accommodate over 500 customers. Confident of 15 per cent growth in the next year, the company has planned a number of initiatives.
"We want to expand our market by introducing snacks that will appeal to younger people. There will be no growth in the traditional snacks category," says Rajendra Agarwal. According to company sources, plans are also afoot to sell packaged tea.
Also, the company is looking to consolidate its position in the Indian snack food industry by setting up a franchising operation. It will invest in a centralised production unit to ensure quality standards. The model, however, is at a nascent stage and will take another year to put into place.
"We will sell only those products that have high demand and limit our menu to a few fast-moving goods in these franchised outlets," says Pankaj Agarwal.
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