Bhujia Barons: How a simple snack took a Bikaner family from a small shop to the list of billionaires!
Indians love to snack! So much so that according to the Federation of Sweets & Namkeen Manufacturers, over INR 1 lakh crores worth of sweets & namkeens was sold in India, in the middle of the pandemic in 2020! The industry as a whole has been witnessing double digit growth for the past few years, employing over 1 crore people directly, and scores of other roadside vendors indirectly. While the industry is still largely unorganized, a few big players have emerged in the Indian market. One such player is Haldiram’s, a family owned business that has revolutionized the humble namkeen into one of the fastest growing snacking products in the country! What started as a part time hobby for some extra income in 1918, has turned into a behemoth of the Indian food industry, generating billions of dollars in revenue every single year. This is the story of how one family went from a small shop in Bikaner to be listed in the Forbes billionaires list by perfecting the art of making namkeens!
Lead-gen machines!
In this episode, Bhavjeet and Anirudh talk about the evergreen & highly lucrative business of lead generation. Check out the different ideas in the episode:
The story of Haldiram’s success is that of ordinary men achieving extraordinary feats! Our story begins in the dusty lanes of Bikaner, a small town in Rajasthan. At the age of 12, when most children were busy playing in the streets, Ganga Bhishen Agarwal, popularly known as Haldiram, was busy perfecting the ubiquitous snack we know today as Haldiram’s bhujia. One of the key changes he made while experimenting was to make the bhujia out of “moth ki daal” rather than “besan”, which enhanced the taste of his bhujia & turned it into a delicacy overnight. He also made the bhujia finer & crispier, compared to the traditional fat & slightly bland bhujia popular in those days. In addition to creating a better product, the boy also used some crafty marketing techniques to popularize it quickly. He named his bhujia “Dungar Sev”, after the then Maharaja Dungar Singh, adding an aspirational appeal to his brand. Next he set the price of his bhujia at 5 paise a kilo as opposed to the earlier 2 paise under his grandfather Bhikharam, making his product more exclusive & not just a commodity.
The business tactics of Ganga Bhishen proved to be successful. By the 1930s, the price of his bhujia had jumped up to 25 paise a kilo in lieu of rising demand for his brand. Merchants on their way to Kolkata, a major hub for Marwari entrepreneurs at the time, stopped by to purchase his bhujia for friends & family back home. This sowed the seed of expansion in the mind of Ganga Bhishen, who began to think about taking his product to Kolkata and expanding his brand to the other side of the country. Hence, in the 1950s, Ganga Bhishen, along with his two sons Moolchand & Rameshwar Lal, decided to open up a business in Kolkata by the name of Haldiram’s Bhujiawala (which was later split into Haldiram’s Prabhuji & Haldiram). The products soon became a hit in Kolkata, and there was no looking back after that. In the next few decades, the business would turn into a massive packaged foods empire, beating the likes of PepsiCo to generate billions of dollars in revenue.
While the business touched new heights, there was trouble brewing underneath. Like most family run businesses, Haldiram’s was also not immune to family disputes for long. Owing to the massive success of the business, there was jealousy and internal politics amongst the various family members. Sensing the dispute early on, Ganga Bhishen decided to put a rest to the family feud once and for all by creating a unique system of territorial division, whereby every segment of the family would only be able to operate & do business in their assigned territory. While this system worked fine initially, over the years, as the various family groups began to grow their respective businesses, the arrangement soon began to feel like sour grapes. Beginning in the 1990s, there were several disputes between the various family groups in regards to the ownership of the brand & the trademark. Despite all this, Haldiram’s has been able to maintain a strong grip over the Indian snacks industry. By keeping their philosophy towards their products the same over the years, Haldiram’s, despite its various factions functioning individually, has been able to maintain its product quality. This unwavering focus on quality has helped Haldiram’s cross the billion dollar revenue mark by FY2019-20, beating the likes of PepsiCo and retaining its number one position in the Indian market.