This cinema hall 'snack-seller' now runs a Rs 5,000 cr company
Produced by: BT Desk Designed by: Manoj Kumar
Chandubhai Virani
Born to a family of farmers in Gujarat, Chandubhai Virani along with his brothers used to run a cinema hall snack counter at Rs 1,000 a month rent in 1976.
An idea to save costs
Hit with bad supply of wafers, Virani and his brothers decided to make potato chips on their own to save costs. They bought a machine that would peel the potatoes, and then the sliced pieces would be soaked in water, and the wafers made in their kitchen.
One loan at a time
Over the next 5 years, the brothers decided to sell homemade wafers to movie goers. The wafers were an instant hit. The business grew one loan at a time. The first loan was to sell the chips outside cinema hall. Then a Rs 1.5 lakh loan to open the first factory of Balaji Wafers in 1982, followed by a loan of Rs 1 crore for a factory in Valsad.
Third-largest player
It is now reportedly the third largest player in India's Rs 43,800-crore salty snacks market with a 12% share after Haldiram's with 21% and PepsiCo with 15% share.
Pepsico makes offer
In 2014, when the turnover of Balaji was Rs 1,000 crore, Pepsico made an offer. But Virani dug his heels in and the offer never materialised. In March last year, the company’s turnover hit Rs 5,000 crore.
Balaji model of business
The Balaji model is essentially based on offering products 20-30% cheaper than national brands and ensuring steady volumes through economies of scale. It also controls almost every bit of operations with a large chunk of manufacturing on its own through its four factories and hardly any advertising and promotion.
What Virani says
We don't compete on pricing as our products are significantly cheaper than rivals," says Virani. "We don't even have a sales target and just chase demand for high quality and affordable priced products."
Family business
Balaji Wafers employs 7,000 people and remains a family-run business, and its refusal to sell out to Pepsico is often cited as a defining moment for its commitment to its identity.