Not many are familiar with this name, but say ‘LG’ and South Indians will immediately respond with perungaayam ! The brand has become synonymous with perungaayam, also known as hing and asafoetida, in South India.
What is Asafoetida?
The name asafoetida is Persian for resin, and has a strong odour — it is the dried latex extracted from the roots of the Ferula assa-foetida plant, that grows in Afghanistan, Kazakhstan, Iran and Uzbekistan. The roots are cut and the resin that oozes out and solidifies is removed and used to prepare this spice. The process is akin to tapping for rubber.
The odour of raw asafoetida is so strong that it has given rise to other not-so-complimentary names such as devil’s dung and stinking gum. The product is hammered or crushed as it is difficult to grate. To make it edible, it is mixed with rice flour and gum arabic (an edible gum from the acacia tree) to produce compounded or bandhani asafoetida.
For health and taste
Asafoetida is the subtle spice that distinguishes Indian cuisine from others. Its compounded form has both medicinal as well as culinary properties. Ayurveda prescribes it as a medicine to aid digestion, lessen nervous complaints, provide relief to asthma patients and reduce high blood pressure and cholesterol. A recent study has said that it might be used in new drugs to combat A(H1N1) infection.
But in the kitchen, especially in South India, it is the indispensable item that adds taste, aroma and in some cases, the slight pungency that some dishes require. This is one product whose quality is determined by its texture and odour: it is stored in airtight containers so that the smell does not seep into other spices. The housewife who adds just the exact ‘pinch’ of asafoetida to sambar or rasam might not know the origins of the product but she knows that without it, the dish will be bland and tasteless!
How it began
In the 1890s, Laljee Godhoo was an entrepreneur who was looking for the right break. He had already dabbled in several ventures including share trading, and selling imported cloves and camphor through the family concern, Laljee Godhoo & Co (LG & Co).
Reportedly, a chance encounter with a kabuliwala ,who was in Mumbai to sell dry fruits and hing, presented him with an excellent business opportunity. In 1894, he used a spare room at his residence in Masjid Bunder, Mumbai to prepare asafoetida and started manually crushing and preparing lumps of hing. The product was initially sold only in Mumbai.
His son, Khimji Laljee, who took charge of operations in the 1920s, was responsible for introducing the brand in the southern market. In the same decade, the company set up its first processing plant (non-operational now) at Nagapattinam in Tamil Nadu. By the 1940s, LG started offering compounded/ bandhani hing lumps in metal boxes, and saw sales pick up.
New market introduction
Its growth in the southern market was aided by Umakant Vahalia and Kumud Chandra Harikrishna Bhatt; partnerships were forged with their families in the 1960s and continue even today. While the daily business is carried on by the Vahalias and Merchants (descendants of Laljee Godhoo), the Bhatts are non-working partners.
As demand for the LG brand continued to grow, the transition to mechanisation became necessary to increase production. A sigma motor mixer that had the capacity to process 150 kg of hing a day, was installed in the 1970s. More processing units were set up at Chennai, Kumbakonam and Nashik. The mechanisation of the processing technology continued into the 1990s, with output increasing to as much as 1,000 kg every 40 minutes!
Changing with times
An important landmark was achieved with the introduction of the powdered hing variant of compounded asafoetida lumps in 1978 — about 80 years after the company first began business. This breakthrough was achieved with the help of processing techniques developed by the Central Food Research Technological Institute, Mysuru (LG presents an annual award to the most outstanding young scientist of this institute).
The powder variant was a natural response to changing times. Earlier, housewives had the time to dry and grind the lumps of hing for daily usage. But as more and more women entered the workforce, the consequent lack of time for household chores resulted in a demand for easier-to-use products. LG was the first company to recognise this need and make this consumer-friendly move. It brought about a surge in sales as demand peaked.
LG asafoetida is now available in both powder and solid forms in bottles and packs ranging from 50 g to 500 g.
Production units
Today, there is one primary production unit at Mumbai (with its own laboratory for quality checking) and packaging units at Chennai and Kumbakonam. Almost 65 per cent of the raw materials needed are imported. All the units of LG & Co are FSSAI and USFDA approved.
With advanced automation and strict hygiene standards in place, chances of physical or chemical contamination have been eliminated. This has helped keep the quality of the products uniform and consistent throughout the country, with only the packaging showing the point of sale (different for Chennai and Kumbakonam). South India accounts for 80 per cent of the market, followed by Gujarat, Madhya Pradesh and Maharashtra.
LG has a committed workforce and about 1,000 loyal stockists, distributors and depot agents pan India. It has an excellent relationship with its network of employees and agents — most of them are the second or third generation of the same family.
A market leader
The company today is run by the sixth generation of the Laljee Godhoo family. Though it sponsors various events such as the annual Kala Ghoda Arts Festival in Mumbai and the Hindustan Times No TV Day Weekend Fest, it does minimal advertising and marketing of its products. Despite this, the LG name evokes instant brand recall, which is attributed to the consistent, high quality of its products.
It is the market leader in India in the compounded asafoetida category, with almost 70 per cent market share. It is also one of the world’s largest producers of compounded asafoetida, and exports its products to the US, the UK, Canada, Australia, New Zealand, Japan, UAE, Malaysia and Singapore.
Its turnover has steadily increased over the years, till it reportedly touched about ₹400 crore in 2017 — the year in which LG processed and sold about 45 lakh kg of hing ! Exports account for about 20 per cent of the total turnover.
Plans are afoot to enter other categories such as masala, after expanding distribution capacity and consolidating its position in north India.
Points of concern
On a cautionary note, market watchers have pointed to two serious issues. One, counterfeits pose a major threat, as most of the counterfeited products are adulterated with barley or chalk. This is not a major problem in established markets where consumers automatically ask for ‘LG’ when they mean asafoetida. But in new markets, they may easily be misled by lookalike logos, colours and packaging, and pick up a counterfeit product which could damage the brand’s name.
The other point of concern is the entry of private labels, as even retailers introduce their own brands of spices. LG’s market share might be affected. The company has never felt the need for brand building, relying on goodwill and word-of-mouth promotion to stay ahead of the competition.
But to retain the top slot, it would be advisable for it to invest in advertising and brand promotion.