21 Dec 2018 20:05 IST

Balaji Wafers: A crunch apart

Turning down acquisition offers from MNCs, the company plans to expand across the country

Apart from colour, appearance and taste, what sets apart the best wafers is the crunch when one bites into them. That said, a visit to the products page of Balaji Wafers will surely urge one to buy a pack — the page opens with an irresistible ‘crunch’!

Not many people in the South are aware of Balaji Wafers, even though it is said to be the second biggest brand in the potato wafer segment in India. The company, based in Gujarat, also manufactures grain-based snacks and is well-known in Gujarat, Maharashtra, Rajasthan and Madhya Pradesh.

The beginning of the brand, as in many other cases, was humble. In 1972, a farmer named Virani, who lived in Jamnagar district (near Rajkot), Gujarat, was reportedly forced to sell his land because of a drought. The amount realised from the sale was ₹20,000, which he handed over to his three sons — Bhikubhai, Chandubhai and Kanubhai — advising them to start a good business. After a failed venture in selling fertilisers and agricultural implements, the brothers became employed at Astron movie theatre in Rajkot, doing all sorts of odd jobs. Their sincerity and dedication caught the eye of the theatre owner, who gave them the contract to run the theatre canteen in 1976.

Luck to hardwork

This stroke of luck paved the way for their future business. Among other items, they sold pre-packaged potato wafers. They noticed that the product was always in demand but the supplier was always late. The brothers started sourcing unpackaged wafers, packing and reselling them to theatre patrons.

By 1982, the entire family had relocated to Rajkot and moved into a house with a large compound. While the women of the family prepared masala sandwiches for the canteen, the menfolk took the logical next step of preparing and packing potato wafers at home, in a shed in the compound. Since machines for peeling and cutting were expensive then, a made-to-order machine at a fraction of the cost was used. The results were encouraging — they managed to prepare 2-3 kg of potato wafers daily, often working nights, after canteen hours. They ventured beyond the theatre and sold products to retailers.

Since the shelf life was long and demand was high, potato wafers soon became their core business. With the canteen and school contracts, and orders from several shopkeepers, a brand name ‘Balaji’ was chosen in 1984. The venture was initially not very lucrative because of various reasons such as not getting paid on time and packets being returned by retailers. But the brothers persisted, and in 1989, with the aid of a bank loan, set up a factory — then Gujarat’s biggest potato wafer plant — at Aji GIDC (Gujarat Industrial Development Corporation’s industrial estate) in Rajkot.

Facility development

This brought a new set of problems like machinery malfunction, all of which were solved in-house, after expert engineers failed to fix them. As business improved, the brothers formed the company Balaji Wafers Private Limited in 1992. With a strong focus on quality, consistency, affordability and availability, the brand soon grew to challenge the likes of PepsiCo’s Lays and Uncle Chipps.

As demand spiralled, a semi-automatic plant was set up in 1995-96 and a fully automated one — Gujarat’s first for potato wafers — was opened in 1999. At present, there are three manufacturing units, at Rajkot, Valsad and Indore, and 14 manufacturing lines for different products within these units. The machinery is imported and the plants have gained commendations for cleanliness and hygiene. Only the best raw materials are used and sterility is ensured through automation and zero human contact.

The manufacturing process operates under the watchful eyes of a full-fledged R&D department. In keeping with the health-conscious consumer of today, efforts are being made to come up with products that are healthy as well as tasty. Oil usage has reduced without compromising on taste. Since the visual impact on the consumer is also a factor in purchase, packaging has been changed from transparent polythene to tri-lamina.

Veritable bouquet

Today, Balaji is known by the sobriquet ‘Sultan of Wafers’. The company reportedly has more than 60 per cent market share in Gujarat, Maharashtra, Rajasthan and Goa, and about 15 per cent in Madhya Pradesh. Its product range, which is both innovative and customised to regional tastes, has gone beyond potato wafers to include about 30 namkeen varieties, and is divided into three categories — youth, kids and family. For the youth, there are flavours and combinations such as Tomato Masti, Simply Salted, Cream & Onion, and Magic Masala. Kids can gorge on Wheelos (Masala Wheels and Tomato Wheels) and the newly introduced Pop Rings Masala. And for the family, there is a veritable bouquet of offerings — Nimbu Chatka, Masala Peas, Kela Masala Wafers, Shing Bhujia, Rajwadi Chevdo, Ratlami Sev, Aloo Sev, Sev Murmura and more.

These products reach the consumers through a dedicated team of six main distributors, 700 dealers and more than 20 lakh retail outlets, all considered a part of the Balaji family. This ensures that products arrive fresh at outlets. And since the ad spend is minimum, this distribution-only model ensures that the consumer gets more for less.

The brand has also forayed into Uttar Pradesh and may soon become available in Karnataka, Telangana and Chhattisgarh. In addition, it exports to countries such as UAE and the USA.

In 2017, Balaji Wafers posted sales of about ₹2,000 crore, making it the second largest brand in India after Haldiram. Multinationals such as PepsiCo, General Mills and Kellogg have offered to buy a majority stake but the company has decided to wait and take the brand national. This means breaking into the South with flavours that will appeal to those regions’ tastes. It also means that the company will have to invest in building recognition for the brand.

Keeping it green

One of the major challenges facing the company today is frequent power cuts. As about 8 lakh kg of potato wafers and 10 lakh kg of snacks are processed every hour at its manufacturing unit in Rajkot, even a minute’s power loss (before the generator kicks in) could mean massive wastage and loss.

Balaji Wafers has never hired brand ambassadors to promote its products, relying solely on quality and consistency. But in an extraordinary coincidence, popular TV serial Kyunki Saas Bhi Kabhi Bahu Thi had a similar storyline revolving around a Gujarati joint family (with three brothers and one sister) named Virani! From reel to real, both the serial and the product have found favour with and touched the public conscience and taste buds, respectively.

The company is a long-standing member of the Snacks Food Association. It entered into a joint venture with Iscon Group (a well-known real estate firm) and SP Chips Potato Pvt Ltd to manufacture French fries and other frozen specialities under the name Iscon Balaji Foods.

Balaji Wafers is one of the few companies where women make up almost 50 per cent of the work force. Subsidised meals are provided to all employees and the company has a reputation for helping out when necessary. The Virani family has developed a public utility centre square called ‘Kotecha Chowk’ in Rajkot. It is in partnership with the Rajkot Municipal Corporation for the ‘Green City Clean City’ project.

The company has adopted several environment-friendly measures such as the establishment of effluent treatment plants to process waste water, which is then used for irrigation or supplied to chemical factories. The organic waste produced at the factories is used to generate bio-fuel in bio-gas plants, while windmills at every plant generate clean energy. The factory grounds at Rajkot have around 2,000 plants and trees.

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