Story of Balaji Wafers and Chandubhai
Balaji Wafers is an Indian brand that went from making zero to nearly 3300 crores in less than 40 years they are now the country’s second largest player in the potato wafer Market just behind Lays but the crazy part it all started from the canteen of a cinema Hall. It all started in 1972 when the Late popat ramji virani handed 20000 Rupees to three of his sons. One of his sons was chandubhai and chandubhai decided I am going to use this money to run my my own business his older brothers put money which they got by selling their land on farming equipment and fertilizers but they eventually got scammed and their business failed soon after this chandubhai was just 15 years old along with his two brothers left for Rajkot to work at a theater called Astron Cinema while his main job was to serve the canteen he also did odd jobs like sticking film posters door keeping ushering all for a monthly salary of just 90 rupees the entire family relocated to Rajkot in 1982 during this time the family made Masala sandwiches for the cafeteria of this theater while they were popular they were also very perishable as you know a sandwich doesn’t last too long bread catches fungus very quickly and this is when chandubhai had an idea of switching to Wafers over sandwiches the biggest issue was that the supplier would Supply them Wafers would always come late or always come with damaged Wafers so chandubhai finally got fed up and decided to do it by himself.
After canteen work chandubhai started his Venture with 10000 rupees he set up a small shed in his compound and started making chips there this decision of his worked very well his Wafers became so popular that the owner of the canteen decided to partner up with chandubhai and soon after chandubhai started running three canteens in total and distributing Wafers to another 25 to 30 merchants and in 1984 they settled on the name Balaji but this was just the start of the hurdle that chandubhai and his brothers were going to face one of the biggest issue chandubhai was facing was to keep up with demand imagine this you were sitting and you’re making way for yourself it’s very hard for you to make the same taste appear in all the Wafers this is when chandubhai had an idea let’s go out and introduce Machinery to make the Wafers and he went to a store and found that the standard potato stripping and cutting machine was too expensive so chandubhai decided to be a true entrepreneur and broke the Machinery in multiple parts so in just 5000 rupees he bought the parts put it together and started making Balaji Wafers now chandubhai was not educated and I know we talk about engineers a lot of us have engineering degrees and we don’t know how to be true Engineers but the idea of being a true engineer is to be able to take something look at it break it down and rebuild it again and chandubhai even though he doesn’t have that degree was truly an engineer now 1989 he expanded in Rajkot and he went to gujarat’s largest potato wafer facility with modest revenues and then took a bank loan of roughly 50 lakh this is dangerous this was the time where Venture capitalists and investors wouldn’t put money in you you had to go to the bank last for a loan and if you lose the money you have to pay for it by yourself.
Balaji Wafers private limited was founded in 1992 by three brothers they competed against big names at that point Uncle chips Simba, binis and their only focus was shallow they give out quality products delivery pricing and service many of their competitors were still hand making chips but Balaji was already using technology all the way in the past today Balaji is the largest regional potato Wafers and snacks brand of the western states in India like Maharashtra, Rajasthan, madhya Pradesh and Goa where they hold about 71% of the market share in Gujarat they hold 90% of the market share and are even bigger than lays, balaji’s success is in its ability to cater for variations within that small Market you see the problem and the opportunity in India is that everyone has different tastes. Balaji understood this he realized you can’t just make one flavor let’s make many local flavors this is in opposition to Lay’s who making flavors not for the Indian audience but from abroad as you can see in their names of their flavors right they had West Indian chilli flavor for example.
Balaji said let’s go local in Maharashtra for example they have a Chaat Masala based snack in Rajasthan they have spicier snacks it’s simply a testament that chandubhai is a Founder was feet on ground he would go and ask people what do they want he had a keen understanding of human behavior human needs and he understood that people are different.
Currently Balaji has over 50 different flavors on top of that they recently entered the noodles Market with their very own in-house made noodles and I wouldn’t be surprised if I start seeing hundreds of flavors of noodles sooner rather than later they just get it but no growth comes without setbacks one major setback balaji experienced was when PepsiCo which owns lays sued Balaji because according to them Balaji copied Lay’s design even though chandubhai stood against this argument and said that the only reason lays is suing us is because we are growing at a tremendous rate for the high court still declared the case in favor of lays resulting in Balaji not being able to sell their chips with their particular design so chandubhai although it started changed the design took the loss to the chin and in 2018 revamped their entire packaging many suggested that because they will have to change their design people will forget the Balaji brand but chandubhai believed in his product also we have learned that people don’t care about what your package logo looks like sure there is some Affinity that people have towards it but the name human brains are built for names the names travel through the centuries and chandubhai Balaji understood that while Lay’s market share fell from 51% to 49% Balaji Wafers has progressively been increasing at 20 to 25 percent every year and many MNC from all over the world including their old friend PepsiCo have sought chandubhai to buy a part in Balaji.