Balaji Wafers a name to reckon with in
Gujarat snacks market
Chataka Pataka Tangy Tomato Snacks happens to
be all over Gujarat present in almost every paan shop
and organized retail outlet, but with no jumbo billboards
screaming its delights. With simple ideas that may seem
outlandish in this age of brazen marketing, Chataka
creator Balaji Wafers Pvt Ltd has managed to fend off
bigger players like Pepsico and Haldiram's in the Rs
600-crore Gujarat market for over two decades since
Balaji products like Chataka Pataka, Ratlami Sev and Sing Bhujiya,
among others, suit the tastes of a specific market. The company offers
masala wafers to cater to the Gujarati palate, chaat masala for the
Maharashtra market and a range of spicy snacks for Rajasthan.
Its products get an extensive reach in Gujarat, courtesy 10 sole
distributors and a 400-dealer network, complemented by a fleet of 150
trucks and 3,500 minivans. This tremendous dealer support is one of
Balaji's key strengths. Balaji keeps its dealers happy and is flexible in
dealings and not to forget a certain factor called pricing. Balaji's namkeen
and wafer packets come for as less as Rs 1 and Rs 5, respectively.
Balaji MD Chandu Virani says volumes help him offer such prices against
PepsiCo's Kurkure, the wafers. This strategy of marrying price, flavour
and distribution is estimated to have catapulted the group to a 90% share
of the state's wafers market and 70% of the namkeen market. After
beating local brands like Samrat & Real, Balaji has since spread to
Maharashtra, Rajasthan and Madhya Pradesh, eyeing a bigger bite of the
Rs 3,000-crore branded snacks market.
Rivals are understandably frustrated with Balaji's success. But some
months ago, Lays and Haldiram's got a godsend opportunity to learn
management practices from the group. Representatives from the two
companies came calling at Balaji's premises, taking in operations at the
plants and potato fields where the company sources its raw materials.
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Lays went back a lot wiser and said, "We are impressed by the simplicity
and efficiency of Balaji's operations." PepsiCo has since been trying to
convince Mr Virani for a sellout.
The group is against the idea, focusing instead on an expansion overdrive.
Plans are afoot to expand the snacks range and cater to the global
markets. Balaji is also embracing innovations; automatic food-tech
potato processing machinery was installed recently at one of its plants.
A Wise Genesis
Like most family-run businesses, Balaji too had humble beginnings. Its
delivery van sputtered to life on a loan of Rs 25,000 from a 1,000-metre
plot in 1989-90. Before that, Chandu Virani, born in a farmer's family,
moved to Rajkot from Dhundhoraji village in Jamnagar after acute drought
in the mid-1970s snatched all means of livelihood.
At 17, Mr Virani was meeting ends by working as a canteen boy &
doorkeeper at Rajkot's Astron Cinema for Rs 90 a month. Help came in
the form of Mr Virani's then employer, Govind Khunt, who outsourced the
canteen business to him and his brother. From that ramshackle canteen,
Balaji has grown to a group that boasts of three plants—two in Rajkot and
one in Valsad that churn out 30 lakh packets per day and a Rs 300-crore
turnover in 2008-09.
Mr Virani still refers to his former employer as "seth", much to the latter's
embarrassment, who believes "Chandu has grown in stature and is now a
seth himself". Those days helped Mr Virani find a name for the grandiose
business that was shaping up in his mind. In 1983-84, a small Hanuman
temple was set up in the cinema hall's canteen. That inspired Mr Virani to
name the then homemade potato wafers Balaji.
Today, Balaji's aura of invincibility, which allows it to even host rival
representatives, is a hot topic in B-schools, discussed maybe over its own