BALAJI WAFERS

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

launch.

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

snacks.