HALDIRAM's Submitted by: Group 10 Aditya Lal Ankita Rai Manvi Goyal Paridhi Modi Rohan Gupta
Indian Savory Snacks Industry
Savory snacks have been a part of Indian food habit, since almost ages. They are normally consumed at teatime.
The variety is almost mind-boggling with specialties from all regions, which have gained national acceptance.
The total snack industry — both organized and unorganized — is estimated to be around Rs 4,500-5,000 crore.
It is estimated to grow around $ 1 billion.
Organized Sector – 45%and
Unorganized Sector – 55%
The organized snack industry is growing at the rate of 30% and is pegged at Rs 2,000 crore.
Haldiram’s – The Company
Haldiram’s began as a tiny shop in Bikaner.
By 1982, it has set up a shop in Delhi, which grew manifold over a decade by word of mouth.
Haldiram’s is a way of life for Indians no matter which country they live in.
Presently, a $ 4 million brand and is a familiar sight not only in India, but also on shelves across USA, UK, and the Middle-East.
Today, haldiram’s can be seen on shelf Tesco, Sipney, Carrefour etc.
Presently, company has 20% share in organized market, behind them comes Pepsi Co.’s Lehar Namkeen, in savory snacks industry.
It enjoys 8% market share overall, with a turnover of around 30 million.
SWOT Analysis – Haldiram’s
Availability of substitute goods.
Health conscious or awareness.
Increasing competition from Indian and MNC food companies.
Growing Food Industry.
Changes in the Consumers Taste and Preferences.
Increase in the Purchasing Power of Families.
Prospects for Exports.
Low Advertising Budget.
Traditional Management Style.
Manufacturing process not completely automatic.
Trust of the consumer
The product profile consist of whole range of varieties from Sweets to Namkeens, from Sherbets to Chips, and also the Papad’s and Minute Khanna.
We have chosen to do our project on SAVORY SNACKS, also known as NAMKEENS.
The product is also differentiated in terms of their weight and prices.
There are different distribution channel within a product category with respect to their size and weight.
“ This is one of its kinds distribution network in India”, as quoted by Mr. K.K.Goyal, Country Sales Manager, Haldiram.
The Namkeen Business
Today, haldiram’s has perfected and packaged over 30 varieties, which are immensely popular all over the world.
The Namkeens business contributes to 70% of Haldiram’s total sales.
The major direct competitor in this segment is Bikanerwala’s “Bikaji Bhujiya”, with his low priced namkeens.
In the organized sector the major MNC’s running for the pie of their business is PepsiCo's “Lehar Namkeen”.
Other competitors are the unorganized sector of local Halwai’s but they cannot match the quality, production and economies of scale of Haldiram’s.
Target Market - Namkeens
The target market of Haldiram is middle – aged household women.
The main customers of the savory snacks are in the age group of 30-60 and the range of the income is around $U.S. 100 per month and above.
As women are the buyers for household needs and the deciding factor on what to be served to the guests, Haldiram targets them for their Namkeens.
Further, there is something for everyone in Haldiram’s varied product range, such as Takatak & Whoopies for kids, Minute Khanna for those ready-to-eat food needs, and the all famous Mithai for everyone at home.
In Mithai also, they have come with sugar free sweets for the “diabetic” or health conscious customers.
Due to the legal contract within the family haldiram cannot extend to South and West India under this brand name, as they are catered by Haldiram’s Nagpur.
For this reason, they are coming up with separate brand that can enter the other part of the Indian market. Along with this, haldiram also exports to various other countries.
In India, haldiram covers the Northern and North-Eastern India. Presently they can sell only in the following states:
JAMMU & KASHMIR
Plant Location and Production Capacity
Presently, they have 4 plants in and around Delhi.
Production capacity of these plants on daily basis is as following:
50 tonnes of Namkeens,
20 tonnes of chips and other fun foods,
5 tonnes of tinned sweets and soan papadi.
Another two plants are under construction to increase the capacity to fulfill the rising export demands.
Regular laboratory checks to ensure quality standards being met.
Basic Distribution Channel Company Factory Carrying & Forward Agent Distributors Retail Outlets Consumers
At Haldiram, they have defined their distribution network with respect to the weight and price of their various products.
This is because they have defined their retail outlets in terms of the kind of product they keep. For e.g., a 10 gm bhujiya packet is generally opted by the “paan wala’s” and very small retailers. Thus, they have a different distribution channel.
Similarly, a parallel channel of distributor is for the “kirana stores” in various colonies and localities where our middle class housewife visits who prefers the less than ½ kg packets but more than the small chillar of 10gms. This segment of consumers is supplied through a different set of distributors who stock the 200gm and 400gm packets .
Thirdly, the big modern trade stores like Spencer's, Vishal Mega Mart, Reliance Fresh, Subhiksha etc., generally prefer keeping the 500 gm and 1 kg packets. They have assigned exclusive distributors for them.
Fourthly, for army canteens, or BSF, CRPF canteens, there is a separate channel of distribution followed.
Since, the price at which the products are sold to these canteens are very low, goods are supplied through the exclusive CSD, Company Sales Depots.
These depots are located near army cants, like one in Delhi near Palam.
The company has various CSD all through out the northern and north-eastern India covering as far as Nagaland and Jammu & Kashmir.
The C&FA are used for distribution of the product outside Delhi, NCR.
The C&F agents work on Freight paid basis till their warehouse.
If the Warehouse is either on the first floor or the basement, then the labor charges are born by the agent and not the company.
Within Delhi, the Distributors are located by dissecting the city into four zones north, east, south, and west Delhi.
They pick the products from the depots and the logistics are managed by themselves. Though the company does have a say in it but leaves the responsibility on them as distribution is more about relationships, as per Mr. Goyal.
Profit Margins within the distribution channel is as following:
4% commission to the C&F (consignee and forwarding) agent,
7% margin to the distributor and
15 to 20% margin to the retailer.
In case of Army Canteens, a fixed price policy is followed which can be revised once in three years as per govt. regulations.
The profit margin in these canteens is very negligible due to the fixed price at which they are supplied.
Selection of a Distributor
The first rule of selecting a distributor is “NO CREDIT”.
Derived from it, they view the following points of reference before selecting a distributor:
Reputation in the market,
The System followed by the distributor,
Also, the distributor of Haldiram’s solely sells their products. They cannot keep any product of any competitor, in short they are exclusively haldiram’s distributors .
A beat chart is generally a visit planner that is designed by the company in collaboration with the distributor.
It is designed to inform the distributor that the company sales executives will visit the following distributor on the following days as per the schedule for order taking and other queries.
This helps both the company as well as the distributors to work in an organized manner as each know when the company will visit and when to expect the stock delivery.
Similarly, the company officials know which distributor to visit when and how the goods will be dispatched and in what lot sizes.
At Haldiram, they have further divided each zone in Delhi into smaller segments.
The company sales executives meets, for e.g.,
Lajpat nagar and to G.K.1 belt on Monday
South Delhi to G.K.2 belt on Wednesday.
Similarly, within this they meet their various distributors on days assigned and take their orders that are dispatched the very next day.
There is a separate team of sales executives for the 4 Delhi zones with each having their respective ASM and RSM.
Similar exercise is followed in other regions involving C&F agents .
Shelf placement is an important issue in today’s modern trade stores.
Though Haldiram can define the shelf space they would prefer at these outlets, their policy is to let the retailer decide it.
This is mainly due to the following two reasons:
Firstly, such a demand does not come without a price.
Secondly, it is believed at haldiram that their product has the right customer pull so in any case the retailers prefer to keep its product at visible places.
There can be three to four types of transit losses mainly, these are:
Loss due to drenched in rain.
Damage of Carton seal.
Unfilled or empty packets.
Three major problems are faced in such a situation are:
After – Delivery Issues.
The procedure for claim settlement is as follows:
The moment the distributor finds damaged products it informs the company about the quantity of packets damaged, of which product, and their batch no.
If the distributor checks it before signing the transport slips it can send them back with the transporter.
In case, he finds them after the transporter has left the goods in godown, then the company issues a credit note when informed on phone, which the distributor can cash on the next visit.
Since, the company shares cordial relationship with its distributors there does not exists a very standardized procedure that is followed.
In case the transporter has left and the damaged goods were found afterwards the product as well as the document are send in the next visit of the company.
The document needed in case of transit losses is delivery note mentioning the details explained above.
But in case of C&F agents, they destroy the product after their expiry dates have passed without informing the company.