Introduction
If you are a Bhujia fan, then there's no way in the world you wouldn't be familiar to the Bhujia-king Haldiram's. Even Kelloggs, World's second-largest snack company wants a stake of Haldiram's which is valued at $3 billion today (excluding the Kolkata branch). But what is the story behind the establishment of such a big empire of a Bikaner originated snack shop? Here's a sneak-peek into the success of this iconic bhujia maker Haldiram's.
Beginning of the empire
Haldiram's is a household name in India, selling everything from savory snacks, known as namkeens, to traditional sweets, potato chips and more recently, complete frozen Indian meals. Its branded goods are sold in stores, including its own, across the country. The company is over 80 years old. The story of the brand dates back to 1937 to a town called Bikaner in Rajasthan, where Haldiram's was a small snacks shop owned by Mr. Gangabhishan Agarwal, known as Haldiram Agarwal. At the age of 12 , Gangabhishan Agarwal, got to know the recipe from his aunt who used to make a thick and soft prototype of the current snack known as Bikaneri bhujia. When Gangabhishan joined his family snack shop at Bhujia Bazar in Bikaner, he used his aunt's trick. Gangabhishan Agarwal reinvented bhujia by adding moth ki daal instead of besan & made Bhujia sev (a type of lentil). And this made bhujia extremely delicious, turning it into a delicacy overnight. His main focus was on to make the fine crispy bhujia and with low fat, so as it give customer enhanced experience of eating bhujia and at the same time it could make the customers feel something different from the conventional bhujia sold in bikaner. He knew how to brand his new product smartly. Thus he named it "Dungar sev" after Dungar Singh, the popular Maharaja of Bikaner. Although the name dungar did not have any connection to the maharaja, But it acted like a brand ambassador for the Haldiram's bhujia. Therefore perceived value of the product was enhanced by a large extent. As a result people do not mind paying extra money over other's bhujiya sev; considering it as they are purchasing premium product. And Demand for Haldiram's Dangar sev is skyrocked within just a few weeks. This was the founding pillar of the incredible Haldiram story.
Haldiram's expansion
The Haldiram's empire too had a humble beginning. Haldiram kept on experimenting with the taste of bhujia and by its success Haldiram when goes to attend the marriage in Kolkata there he gets an idea of opening a shop there and by this initiative, his first step towards the branching of his Bikaner Bhujia business is started and by passing of time his business started to spread in parts of Nagpur and some of the capitals and by here the success of Haldiram started.
For any business to spread in the market and stick its root in the market its expansion is very necessary to build the business. The second generation of Agarwal did not expand the business further. However, grandsons Manoharlal and Shivkishan took the business to Delhi and Nagpur respectively. The Chandni Chowk shop in Delhi proved to be a huge hit with the masses. The Second pillar of Haldiram growth was actually lead by Mr. Shivkishan Agarwal in the late 1960s and he belongs to the third generation in the Agarwal family. Until this point family has seprated into the discrete business which was in Bikaner, Kolkata and Nagpur and when Bikaner & Kolkata were doing very well, Shivkishan was struggling to sell bhujia in Nagpur, because the demand for snacks in general was not very high in Maharashtra. Therefore he decided to take a step back and got back on the ground to do a market research about the food habits of Maharashtrian and that is when, after making countless visits to the most popular stores in Nagpur, Shivkishan identified three major opportunities in the market. The first thing he realised was that maharashtrian had not been exposed to more than few savoury snacks and this presented him a hugh opportunities to be a first mover in the market but at the same time, just like any other first mover the trust factor or the hesistancy of the people was major obstacles for market penetration. Second gap was identified was in the sweet market, and he noted that most popular shops in Maharashtra mostly sold only Balushahi, Peda, Mysore pak and laddo. This is when he realised that Maharashtrian definitely had a sweet tooth that could be exploited further. And thirdly, Shivkishan realized that because the variety of sweets in Maharashtra is very less, there was an immense scope for hundred of sweet delicious from other region that could leveraged market penetration. And guess what? He started by making his favourite sweet using milk,sugar,dry fruits,cashew nuts and saffron. And this is how gave rise to the iconic "Kaju Katli" in Maharashtra and slowly across India.
In 1975, Haldiram's set up manufacturing plants in Delhi as well as Nagpur, The company came to be divided between three distinct areas of operations with Delhi-based Haldiram Snacks and Ethnic Foods in the northern region, Nagpur-based Haldiram Foods International in western and southern regions and a much smaller Kolkata-based Haldiram Bhujiawala in the eastern region. The Delhi business has emerged to be the largest. Haldiram business expands in many more cities of India as well as foreign countries. Today, the company exportation of products spreads to more than 80 countries including the US.
And in 2003, the multicrore company get the certification of the most trusted brand industry and the company started to work in all four directions of the country mostly acquire the entire northern region but little weak in the southern region which is not come in that success mark even after doing so many attempts in comparison to other three regions.
Making billions from bhujia
The ongoing talks with Kellogg's (Largest manufacturer of Cornflakes) involve two of the three branches of the company — Delhi-based Haldiram Ethnic Foods and its affiliates, and Nagpur based Haldiram's Food International and affiliates. The two businesses are believed to be valued at around $3 billion (Rs 24,000 crore),(excluding the Kolkata branch). That's massive! But now this rumored 'purchase' has left all of us wondering what would be the mix of cornflakes with bhujia be like?
From Bikaner shop to French bakery
In 1937 when Gangabhishan set up his bhujia shop in Bikaner, he would have rarely imagined that Haldiram's would be selling Veg Shami Kebab, Soya Shami Kebab and Hara Bhara Kebab. But, well isn't that common to all these tycoons – they never know that they will be so big some day, do it anyway and unmask wonders! Haldiram's has definitely come a long way from Gangabhishan's thinking, moth-dal bhujia to a range of kebabs it offers in the Middle East as part of its frozen foods business. Recently, Haldiram's signed its first partnership outside the family and entered into an exclusive master franchisee partnership with French bakery cafe Brioche Dorée, the world's second-largest bakery chain, to set up their café in Delhi. For the first time, the Brioche Dorée cafes will serve only vegetarian food.
Obstacles in the path of the success of the Haldiram
Every success has its ups and downs and success can't be achieved in one day it takes many sleepless nights and it also takes time and effort the way of success is never be smooth just like that this company also have to go through many challenges like in the year 2015 when ban in Maggie occurs at that time many products of Haldiram is also banned by regulatory of food authority that brings lost in the profit of the company. FDA of India after several tests gave the Haldiram Company a clean chit and after that company takes an initiative to tie-up with companies and it also provided food facilities to the passengers in partnership with Indian railway and by that the company success rate again comes in places.
Haldiram's becomes India's biggest snacks maker with a turnover of Rs 4000 crore
In year ended September 2017, Haldiram's regained the top spot as the country's largest snack company after more than two decades, surpassing PepsiCo in sales. Haldiram's posted sales of Rs 4,224.80 crore in the year ended September 2017, compared with PepsiCo.'s sales of Rs.3990.70 Crore only. During the same period, Haldiram's market share surged at faster pace at nearly 30% as against 10-12% in 2012-16.
According to a report by The Economic Times, "The Indian snacks maker Haldiram is now twice the size of Hindustan Unilever's packaged food division or Nestle's Maggi and larger than the India turnover of the two American fast food rivals Domino's and McDonald's put together."
Haldiram's Marketing Strategy & Marketing Mix
Marketing strategy of Haldirams along with the marketing mix framework 4Ps (Product, Price, Place, Promotion) and several marketing strategies like product pricing approach, promotion planning and business strategies, based on Haldiram mix, help the brand to succeed in the market and achieve its business goals. Let us start the Haldirams Marketing Strategy & Mix to understand its product, pricing,promotion and distribution strategies:
1. Haldiram's Product Strategy
Haldirams is one of the largest food & snacks manufacturers & retail outlet in India. Haldiram's business firstly started with Bhujia Namkeen but later on by seeing the tremendous success of the company it started to include many more products like Haldiram sweets (Rashgula,Gulabjamun,Kajukatli), snacks (AaloBhujia, KhataMitha, Namkeen, Peanuts), Papadum, Cookies, Pickles, Chips, Dry Fruits, and even complete frozen foods and Now, currently Haldiram produced more than 400+ products.
The company also has an online presence where customers can order and avail various special products offered by Haldirams which include custom sweet festive products and custom tokni. Haldirams product strategy as a part of its marketing mix covers various sizes to satisfy the different requirements of customers. They also give a lot of attractive packaging with attractive colours to encourage impulse buying among customer package also comes filled with nitrogen to increase the shelf life of products. The whole manufacturing process is in-house and strict checks are done by the founder family members themselves. There is uniformity in authenticity in taste which make Haldirams a tremendous success in Indian snacks market.
2. Haldiram's Price/Pricing Strategy
Haldirams charge a minimal premium owing to the branded and well packaged product giving huge importance to good presentation and lively packaging as a way of differentiation branded unorganized products and thus demand a premium for it. But since the premium that consumers usually don't mind given the trusted high-quality products. At the same keep prices slightly lower than other branded competitors like Bikaji, Lehar, Balaji etc. competitive pricing is the backbone of its marketing mix business strategy. To charm sensitive customers, Haldirams has come up with small one-time consumption packaging which are priced at Rs.10 only.
3. Haldiram's Place & Distribution Strategy
Haldirams manufacture in Delhi, Haldiram Bhujiawala in Kolkata and Haldirams Foods in Nagpur. The Haldirams Snacks and Ethnic Foods in Delhi had earnings of Rs.2,000+ crores from the northern region. The three restaurant formats under which they operate are — Quick service restaurants (QSR) and kiosks. Also the company also started its restaurant outlets in Kolkata, Noida, Delhi, Nagpur, and Pune. but 80% of revenue is generated from products business. The company is planning to expand a franchise-based model and has a strong network for distribution of its products in India and abroad.
4. Haldiram's Promotion & Advertisement Strategy
Haldirams never followed an aggressive marketing strategy, but let the products speak for themselves by strong point-of-sale promotional practices. They also benefitted from huge loyal customer base and word of mouth promotions. But owing to recent rise in competition, Haldirams has now come up with small 30 seconds YouTube ads to target the urban and international customers. It also does city-level promotions using colourful hoardings and posters. In 2015, Haldirams tied up with a Bollywood movie "Prem Ratan Dhan Payo" and launched a contest for promotions. New packs were also launched with pictures of characters from the movie and more than 1.5 crore packets of Haldirams snacks was distributed Pan India under this promotion campaign. Haldirams focuses more on the point of purchase advertising and uses special racks for its products in the mall. Packaging was an important aspect of Haldiram's product promotion.
Conclusion
This is how haldiram's has grown from small shop in Bikaner to one of the renowned snacks seller in the world. Today Haldiram's valuation has crossed $3 Billiion and business has spread to 80+countries. It was due to effort of three generation of Agarwal that converted their small shop into the big business it is today. This was all about the story of Bhujia to building a Brand Haldiram Empire.
Source: Book
Bhujia Barons: The Untold Story of How Haldiram Built a 5000 Crore Empire by Pavitra Kumar
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