Directors Vishaal R Vira and Nirmal P. Gogri, Sarjena Foods, better known for its Baker Street brand, discuss the company’s challenges, what catapulted its growth, and plans for their next phase of growth following PE funding by Kishore Biyani’s Future Consumer Enterprise, with Manisha Bapna
How has Sarjena Foods Pvt Ltd (SFPL) grown since inception?
When SFPL took over the Baker Street brand of Max Foods in 2011, its products were available only in 100 modern and 10 to 15 general trade stores in Mumbai. Our strategy behind the takeover was to encash on Baker Street’s brand value, and become the only such brand in the traditional bakery segment in India, and create a pan India presence. The takeover entailed huge scope for growth for Sarjena Foods.
We had to do a lot of restructuring and to smoothen operations, the management set up separate teams that were responsible for creating new markets, spreading awareness, automating and increasing our production, launching new products, reaching export markets, etc. Our challenges were creating a strong foundation, establishing long-term and well-defined goals, creating a sound organizational structure, formulating clear cut processes and practices, alignment and coordination within the team.
In April 2012, we engaged Ambrish Chheda of MasterClassTM Training & Consulting LLP, and developed a four-page Strategic Execution Plan that included Mission, Values and Vision, and helped create a strong organizational structure. The execution progress is reviewed every 15 days at the SERM meetings by MasterClassTM. By 2012-13, SFPL’s sales growth had reached 81 percent, and the company registered 73 percent growth in turnover.
What developments followed the restructuring?
We revamped the brand identity and positioned it as ‘Health & Happiness in Every Bite’ and changed the packaging of our products to a world class look and feel. Our organization building process involved forming a core team with defined KPIs, and we recruited 40 sales personnel all over India to appoint and provide service to distributors and trade partners, and we established a pan India distribution network.
Today, the Baker Street brand is available in over 15,000 retail outlets in 15 major states. We have introduced 16 new products. We were the first in India to install the Continuous Oven for Khari manufacturing along with a continuous line of layering, sheeting, cutting and tray filling in the process line. Our manufacturing productivity (average production per day) has increased by 57 percent, without increasing manpower or machines! There has been an increase of 121 percent in Packaging Productivity (43 kg to 100 kg per person per day), again without increasing manpower or machines!
We implemented stringent QA processes, SFPL is ISO 22000 certified). We implemented a low-cost ERP system with almost all modules including for sales and distribution, and finally, we have an online presence and enhanced visibility through www.bakerstreet.in.
How has SFPL converted opportunities to its advantage while building the brand?
We have been approached by reputed business houses like retail chain Kobe Bussan of Japan and by Wal-Mart in India. We converted the interest shown by these companies in our products into a business opportunity by passing their stringent norms in their first visit to our manufacturing unit, and by becoming the safest food vendor for them.
We would like to share a very interesting incident here: a few Japanese officials from retail chain Kobe Bussan happened to pick our cookies in a mall in Mumbai. On analyzing and checking the quality, their product team showed an interest in having them manufactured. Since Japan’s food laws are extremely stringent, they wanted to change some of the raw materials as per the country’s standards. The surprising part is that in the entire transaction we communicated only through e-mails, and we neither met nor did they team visit our unit! But we got their order with 100 percent payment in advance! After placing the orders and confirming the date of production they made an unexpected visit to our unit to check if we were following their quality standards.
All our products follow a very simple policy: ‘If we can feed these products to our kids, then we can supply them to all the people’. It’s a social responsibility. This impressed the Japanese team, and today we are supplying 3 to 4 containers to them every month. Our products are sold in Japan under our Baker Street brand and the Made in India tagline.
We became the only processed food supplier to Bharti-Walmart after scoring 91 percent for the safest food supplier by a third party Quality Audit (which till date has not been achieved by any other food vendor). At Walmart, scoring above 70 percent is a must as per food safety standards and socio economic audit (work environment, labour safety, factory laws, etc). Working for two retail giants has given us an edge over our competitors.
Who are your competitors in the bakery market?
In India, the bakery market is very huge, comprising majorly of unorganized local bakery manufacturers, who have a stronghold in traditional products like khari, nankhatai, etc. Reputed brands like Britannia, ITC, and Parle have a strong distribution network across India. In addition, there are regional brands which serve the particular region/area they are present in, and have a very strong foothold locally.
We at Baker Street take utmost care in delivering the best quality products – from sourcing only branded ingredient suppliers to the final packaging and dispatch. Each and every raw material goes through a quality test at our in-house lab before being processed, and is continuously monitored on the processing lines. We are amongst the very few brands to offer traditional bakery products with a shelf life of 6 to 12 months. Our products are generally zero trans fat, have no added preservatives, no artificial colours, no MSG, and are 100 percent vegetarian.
What kind of R&D is carried out at SPFL?
At Sarjena Foods, we keep the consumer in our mind while developing new products. For instance, we have come up with Munch Bites in the Snacks category, which is a fusion of traditional khari, and is targeted at corporate consumers. We have also developed whole wheat cookies and nankhatais, which will be India’s first whole wheat range with zero percent white flour (maida). We have launched fusion Kharis like Mexican, Cheese Garlic, and Szechuan, and there are 50 more new products which we will launch in a phased manner.
What is SPFL’s distribution channel?
We have a pan India distribution channel of super stockists, distributors and CNF agents through which we are reaching 15,000+ retail outlets in 39 cities across 14 states, and the number is increasing. We are supplying to modern retail chains like Food Bazaar, Star Bazaar, MORE, Reliance Fresh, HyperCity, Spencer’s, D-Mart, Haiko, Apna Bazar, Walmart, etc, and are also available online at Big Basket, Ek Stop, Tasty Things, Aloo.in, and many more. Baker Street products are exported to 19 countries including USA, UK, Australia, Japan, New Zealand, Singapore, Malaysia, Germany, Spain, Africa, UAE, etc.
What new developments are in the pipeline for SPFL?
SFPL is constantly trying to educate the consumer about the right quality of products, for which we are participating in consumer interactive events like exhibitions, in-store sampling, etc. We have recently got a 35 percent Strategic Private Equity funding from Mr. Kishore Biyani’s company – Future Consumer Enterprise Ltd. The investment will help us scale-up our distribution network, increase our production capacity, and create more brand awareness. This partnership will also help us to expand our distribution network across Modern Retail, and we will be able to leverage our sales and brand value on their expertise in merchandising and sales strategies. In turn, Future Group is keen to enter the branded bakery space.
Our aim is to become a Rs 100 crore brand in India by 2020, offering innovative, tasty, healthy, convenient, high quality, vegetarian food products and educating people on their health benefits, so that they can relish them along with their family.
