Haldiram’s Overview

Introduction

Over a period spanning six and a half decades, the Haldiram’s Group (Haldiram’s) had emerged as a household name for ready-to-eat snack foods in India. It had come a long way since its relatively humble beginning in 1937 as a small time sweet shop in Bikaner, in the Rajasthan state of India. In 2001, the turnover of the Haldiram’s was Rs 4 billion. The group had presence not only in India but in several countries all over the world. Till the early 1990s, Haldiram’s comprised of three units, one each in Kolkata, Nagpur and New Delhi.

The Agarwals family that owned Haldiram’s were always conscious of the need to satisfy customers in order to grow their business. The company offered a wide variety of traditional Indian sweets and snacks at competitive prices that appealed to people belonging to different age groups. Haldiram’s had many ‘firsts’ to its credit. It was the first company in India to brand ‘namkeens’. The group also pioneered new ways of packaging namkeens. Its packaging techniques increased the shelf life of namkeens from less than a week to more than six months. It was also one of the first companies in India to open a restaurant in New Delhi offering traditional Indian snack food items such as “panipuri,” “chatpapri,” and so on, which catered to the needs of hygiene conscious non-resident Indians and other foreign customers.

Since the very beginning, the brand ‘Haldiram’s’ had been renowned for its quality products. The company employed the best available technology in all its manufacturing facilities in India. Given the increasing popularity of Haldiram’s products, the group planned to expand its operations.

However, some analysts felt that Haldiram’s still had to overcome some hurdles. The company faced tough competition not only from sweets and snack food vendors in the unorganized market but also from domestic and international competitors like SM Foods, Bakeman’s Industries Ltd, Frito Lay India Ltd.(Frito Lay) and Britannia Industries Ltd. Moreover, the group had to overcome internal problems as well. In the early 1990s, because of the conflict within the Agarwals family, Haldiram’s witnessed an informal split between its three units as they started operating separately offering similar products and sharing the same brand name. In 1999, after a court verdict these units started operating as three different companies with clearly defined territories. This split had resulted in aggressive competition among themselves for a higher share of domestic and international markets.

BACKGROUND NOTE

In 1937, Ganga Bishen Agarwal, (popularly known as Haldiram), opened a small sweet shop in Bikaner, a small district in Rajasthan. Bikaner had a large number of sweet shops selling sweets as well as namkeens. ‘Bhujia sev,’ a salty snack prepared by Ganga Bishen, was very popular among the residents of Bikaner and was also purchased by tourists coming to Bikaner. In 1941, the name ‘Haldiram’s Bhujiawala’ was used for the first time.

In 1950, Prabhu Shankar Agarwal (Prabhu), along with his father Rameshwar Lal Agarwal (son of Ganga Bishen), expanded the business by establishing a small manufacturing unit for sweets and namkeens in Kolkata. The success of this unit motivated Prabhu to upgrade its machinery to improve the quality of its products. As demand for Haldiram’s products increased, it was decided to scale up the company’s manufacturing and distribution activities.

In 1970, a large manufacturing unit was set up in Nagpur in the state of Maharashtra (India). In 1983, a retail outlet was set up in New Delhi. The outlet became very popular not only among the Delhiites but also among tourists visiting Delhi.

Haldiram’s was able to achieve significant growth during the 1980s and 1990s. In 1992, a manufacturing unit with a retail outlet attached to it was set up in the outskirts of Delhi. A year later, Haldiram’s syrups and crushes were successfully launched in the Indian market. In 1995, a restaurant was opened in New Delhi. In 1997, realizing the potential of namkeens, the company set up a manufacturing unit in Delhi exclusively for making namkeens.

To add potato products to its existing product portfolio, machinery was imported from the US. Haldiram’s maintained high quality standards at every stage of the production process. All its food items were prepared and packaged in a very hygienic environment.

In the mid 1990s, Haldiram’s added bakery items, dairy products, sharbats and ice creams to its portfolio. At the beginning of the 21st century, Haldiram’s products reached millions of consumers not only in India, but also in several other countries, including the US, Canada, UK, UAE, Australia, New Zealand, Sri Lanka, Nepal, Japan and Thailand.

Analysts felt that the growing popularity of Haldiram’s products could be attributed to its constant focus on all the elements of the marketing mix. An article posted on the website apeda.com[1] quoted some of the company’s strengths, “To sustain in the competitive market, Haldiram’s has endeavored stress on its product quality, packaging, shelf life, competitive price with a special emphasis on consumers satisfaction and its lingering taste is amongst the best available in the world.”