Kellogg’s, the world’s second-largest snack food company, is trying to diversify its portfolio beyond breakfast products and wants to buy a stake in Haldiram’s, which it has valued at $3 billion (excluding the Kolkata branch).
Haldiram’s, the iconic bhujia maker, which now sells a range of desi snacks, has grown from a small shop into a vast empire while surviving disputes and break-ups in the original family business.
The ongoing talks with Kellogg’s involve two of the three branches of the company — Delhi-based Haldiram Ethnic Foods and its affiliates, and Nagpur-based Haldiram’s Food International and affiliates. The two businesses are believed to be valued at around $3 billion (Rs. 20,000 crores), excluding the restaurant business. The two divisions together are expected to end FY19 with sales of Rs. 4,500–5,000 crore and profit of Rs. 450–550 crore.
When Haldiram’s revenues crossed Rs. 4,000 crores in FY16, it had gained twice the size of Hindustan Unilever’s packaged food division or Nestle Maggi, and grew larger than the India turnover of the two American fast food rivals, Domino’s and McDonald’s, put together.
In the year ended September 2017, Haldiram’s regained the top spot as the country’s largest snack company after more than two decades, surpassing PepsiCo in sales. Haldiram’s posted sales of Rs. 4,224.8 crores in the year ended September, compared with PepsiCo’s Rs. 3,990.7 crore from brands such as lay’s, Kurkure, and Uncle Chipps.
Haldiram’s started with a small shop in Bikaner in 1937. Ganga Bhishen Agarwal, fondly called Haldiram by her mother, got to know the recipe from his aunt, who used to make a thick and soft prototype of the current snack known as Bikaneri bhujia. When Ganga Bhishen joined his family snack stall at Bhujia Bazar in Bikaner, he used his aunt’s recipe and reinvented bhujia to make it thinner by using a finer mesh. He knew how to brand his new product smartly. He named it ‘Dungar sev’ after Dungar Singh, the popular Maharaja of Bikaner.
With his new brand, he parted ways with his grandfather’s business. His product hit a chord with the buyers. After nearly a decade, he was selling as much as 200 kilos of bhujia every week, and the price had gone up from 2 paisa a kilo to 25 paisa.
Haldiram’s empire started when he went to Kolkata to attend a wedding, which gave him the idea of opening a shop there. That was the first branching out of the Bikaner bhujia business. The second generation did not expand the business further. On the other hand, grandsons Manoharlal and Shiv Kishan expanded the business to Nagpur and Delhi. The Chandni Chowk shop in Delhi proved to be a huge hit with the masses. Then came the manufacturing plants in Delhi as well as Nagpur, followed by restaurants in major cities in India as well as foreign countries. The company came to be divided between three distinct areas of operations, with Delhi-based Haldiram Snacks and Ethnic Foods in the northern region; Nagpur-based Haldiram Foods International in the western and southern regions; and a much smaller Kolkata-based Haldiram Bhujiawala’s in the eastern region. The Delhi business has emerged to be the largest.