Balaji Wafers: A chip of the new block

A quick glance at any shop tells us a lot about consumer insights: about brands that have fought and survived, brands that have perished. The ones that do manage to stay, surely, they have a story to tell.

So, this week, in the Luxury of Poverty series on CNBC-TV18, there is a story of a company that is rooted in local flavours and is yet giving some serious competition to its MNC counterparts. It’s a brand most of us are familiar with and one that is found in the swankiest shops to the humble kirana stores. The brand we are referring to is Balaji wafers. In the age of cut throat competition, Balaji Wafers has stood the test of time, as it emerges a popular winner to its fancier competition of Lays. In a span of three decades plus this company has earned the unofficial title 'Sultan Of Wafers' from the trade. That's a huge compliment, considering that it doesn’t have celebrity endorsements. It’s advertising and marketing spent is negligible compared to 7-8% spend by its competitors.

Tickling the local palates seems to be Balaji Wafer’s home spun philosophy. For instance, in Gujarat it offers masala wafers and ‘ganthiya’ to cater to appeal to local palate. In Maharashtra it offers ‘chaat masala’ wafers, in Rajasthan, it offers spicy snacks. But sets it apart from its competitors and helped it gain huge market share is its attractive pricing strategy. For instance, a Rs 10 pack of Balaji Wafers contains 45 grams of chips while Lays has just 25 grams.

With a bouquet of 8 varieties of chips and over 25 varieties of namkeens, Balaji Wafers holds a dominant position in five states in the country. It has captured 60-70% market share in Gujarat, Maharashtra and Rajasthan. In Goa it commands over 50% market share while in Madhya Pradesh it is close to 50%. This strong reach has been possible because of its strong distribution and retail network. Through a network of 700 loyal dealers it makes its products available to over 8 lakh retailers in the country.

Like most of the brands, this brand too had a humble beginning. .  Three brothers --Bhikhubhai, Chandubhai and Kanubhai were born to a farmer in a small village in Jamnagar district in Gujarat. All of them had completed only primary education.  In 1974, the Virani brothers borrowed Rs 20,000 from their father and moved to Rajkot to seek their fortune. They invested their money in a fertilizer business.  But, lack of knowledge and experience they lost all their money as a trader supplied them spurious fertilizers.

The fear of incurring the father's wrath saw Virani brothers deciding against returning home. With no option, elder brother Chandubhai started doing odd jobs. He joined as door keeper at Rajkot's Astron Cinema on a monthly salary of Rs 90.

Impressed with Chandubhai's hard work and commitment, the theatre owner Govind Khunt outsourced canteen business to him.  Soon Virani brothers started making 50-60 kgs potato chips every day at their home and sold it at the theatre.  Finding eager takers the Virani decided to expand their business by sell the wafers to local shops in Rajkot.  By 1989 they had become a formidable player. Today all its products are manufactured at its state-of-the-art plants located in Rajkot, Valsad and Indore. Brand Balaji has indeed arrived.

This just goes to show that sometimes all that is needed besides trust is a wide array of choices for appreciating all local flavours and tastes and a good quality product that people find comfort in. A food in which childhood memories can be relived. Bajali Wafers can take comfort from the fact that its food will always be sought after as comfort food.

In this episode of Luxury of Poverty AB Ravi, Editor - Special Projects, CNBC-TV18 speaks to Dr A Velumani, Chairman of Thyrocare Technologies wherein he decodes the success mantra of entrepreneur features. Watch the episode as it airs on CNBC-TV18 at 6.30 pm on May 14.