03 Oct 2016 13:20 IST

Spicy story of Haldiram’s rise

A candid, sweet and sour account of how a successful Indian family business typically works

The massive Indian branded foods market has for long had both home-grown and multinational players salivating for a piece of the action. But while a few brands such as Nestle’s Maggi, Hindustan Lever’s Knorr and ITC’s Bingo have nibbled at the edges of the market, they’ve all struggled to get to the centre of the plate — the desi staples that are devoured by the masses.

That’s why the story of snacks and sweets maker Haldiram’s, which has fought off both multinationals and regional favourites to acquire a pan-India presence in packaged snacks, is worth telling.

Author Pavitra Kumar does tell a highly readable tale in Bhujia Barons, which chronicles how Ganga Bhishen Agarwal (aka Haldiram) built a ₹5,000 crore empire starting out with a humble snack stall in the back alleys of Bikaner. The story, which traverses four generations of Agarwals from 1918 to the present day, features many colourful personalities, the occasional black sheep and a good dose of family feuds reminiscent of primetime television soaps.

The author often lavishes fulsome praise on various Agarwal family members for their vision, acumen and ambition and strays into emotional digressions. But she does present a biography that has the ring of authenticity. She does not paper over the unsavoury aspects of some of the Bhujia Barons.

Making of a brand

The story starts with the original Haldiram, who at age 12, with a wife to support, joins the family business — one of the many snack stalls at Bhujia Bazar in Bikaner. The boy not only masters the art of skimming the boiling oil with his bare hands to scoop up bhujias in quick time, but also ushers in innovations — thinner bhujias made with finer mesh and the addition of moth dal (a kind of lentil) to chickpea flour for unique taste.

Having differentiated his bhujias thus, he also gave them an aspirational quality by naming them ‘Dungar’ sev after the popular Maharaja of Bikaner — Dungar Singh! But soon his wife’s desire to move out of the joint family prompted him to strike out on his own, parting ways from his grandfather’s business.

Scaling up

A hard toil and booming demand help Haldiram and his three sons scale up the venture from a small-time stall to a business that churns out 100-200 kilos of bhujias a week by the 1940s and 50s, with the prices shooting up from 2 paise a kilo to a handsome 25 paise! A chance visit to a Kolkata wedding prompts Haldiram to branch out into that foodie city. But it is familial pressure (a sister in distress) rather than strategic vision that nudges grandson Shiv Kishan to set up shop in Nagpur, where Haldiram’s expands its snacks and sweets menu and also branches out into quick service restaurants.

While the first and second generation Haldirams were clearly content with running small operations, two grandsons from the third generation– Manoharlal and Shiv Kishan showed driving ambition. They play a pivotal role in the brand’s foray into national capital, by surreptitiously acquiring a stall at Chandni Chowk. After the shop is burnt to the ground during the Sikh riots of 1984, the brothers re-built the business brick by brick. The Delhi Haldiram’s eventually transforms into the largest revenue driver, serving as a springboard not only to national expansion, but also to markets abroad.

This book is pieced together mainly from personal interviews with three generations of Agarwals, with very few third-party sources verifying their claims. But they, by and large, seem to have been fairly candid with the author sharing not just their triumphs but their failings as well.

All in the family

The narrative is laced with interesting anecdotes that provide a glimpse into the dynamics of a Marwari family business. Manoharlal and Shiv Kishan, for instance, share tales of how difficult it was to convince their placid father to make any change in the business. Whether it was a move from messy ink printing to flexo printing, grinding their own besan or setting up shop at a promising new location, Moolchand would inevitably stonewall the idea with — ‘Why bother to take on more tensions and upset the gentle waves in the ocean of life?’. There’s also a good contrast to be made between the patriarch and the brash fourth generation Prabhu Shankar Agarwal, whose credo was clearly ‘my way or the highway’. The original Haldiram was so scrupulous that he used to request his cashier for 50 paise everyday to meet his personal expenses!

But then, a whole chapter is also devoted to the black sheep of the family, Prabhu Shankar, who literally bulldozes his way through Kolkata and is sentenced to jail after an alleged attempt to take out a ‘supari’ on a tea stall owner.

Brand troubles

The best insights from the book come from its worm’s eye view of what makes family businesses tick, and come unstuck as well. There’s a detailed account of how Haldiram is forced to repeatedly divide up his empire on a territorial basis, so that family factions don’t skirmish over use of the brand name.

It also shows how relying on verbal agreements and waiting too long to professionalise can severely impede growth. The unclear boundary lines on the brand eventually led the family into Court battles, with this lack of clarity keeping Haldiram’s from making an IPO.

While the book has plenty of human interest elements, it lacks true insights into what went into building a pan-India food business of this scale.

How did Haldirams’ build a brand and manage to win shelf space in new markets such as South India, without getting into face-offs with the MNCs? How do the Bhujia Barons maintain such good product quality while dealing with erratic Indian supply chains and unpredictable sales cycles? How did they manage to standardise quality of ingredients in the fragmented farm markets?

Such insights may have elevated the book from just being a good read on the Haldirams saga, to being an excellent case study on the uniquely Indian way of doing business.

Meet the author

Pavitra Kumar is a freelance writer, has an undergraduate degree in journalism from Delhi University and an MBA from the Carlson Institute of Management. She has worked with media and digital marketing agencies.

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