How this Nashik-based FMCG company is staying relevant amidst traditional and new-age players
For a long time, traditional brands like Britania, Parle, etc., have been ruling India’s fast-moving consumer goods (FMCG) sector. However, in the last decade, several direct-to-consumer (D2C) brands have emerged in the space — the new era now touted as FMCG 2.0.
According to India Brand Equity Foundation (IBEF), FMCG is India’s fourth-largest sector, accounting for 50 percent of the sales in the country. The sector has also attracted investment because of its all-season demand and witnessed an FDI inflow of $18.59 billion from April 2000 to June 2021.
However, the question remains - how are traditional FMCG brands staying relevant in the age of FMCG 2.0?
To delve deeper into this, SMBStory spoke to Saloni Mayur Chindhade, Director of Jahagirdar Foods, launched in 1996 by her father Milind Jahagirdar. The Nashik-based FMCG company manufactures a host of products like biscuits, cookies, chocolates, premixes, namkeens, and more.
has been a witness to India’s evolving FMCG sector. Despite its arduous journey, the brand continues to innovate to stay relevant in this competitive market. And, Saloni says, the COVID-19 pandemic played a major role in changing many things within the company and the industry.
From inception to the pre-pandemic time
After working for eight years with Britannia, Milind Jahagirdar left the company in 1989 to start something of his own. Saloni says her father always wanted to become an entrepreneur, but his desire did not materialise until 1996.
Milind opened an FMCG consultancy firm and realised he wanted to explore the production side of the business. In 1996, he shut his firm and started another business with a partner called Baker House.
For a year, they worked on the company that would manufacture ragi biscuits, but things between him and his partner did not work out, and the latter walked out. Milind took the reins of the company and converted it into Jahagirdar Baker’s. In 2017, the company changed its name to Jahagirdar Foods.
Saloni recalls the first day of the company’s operations when her father and one more person made ragi biscuits and sold them to some local shopkeepers and friends and did a sale of Rs 39.
Later, based on consumer feedback, the company expanded and introduced namkeens, chocolates, and cookies. However, biscuits remain Jahagirdar Foods’ bestseller and contribute the most to its overall revenue.
While it manufactures most of its products in its in-house unit in Nashik, items like namkeens are contract manufactured.
After carving a niche in Nashik, Jahagirdar Foods has expanded its footprint to Pune and Mumbai. It has also grown through general trade and company-owned outlets, which it first opened in 2010 and has now expanded to 15 outlets.
Nonetheless, Saloni was never inclined to join the business. In 2009, she was studying law in Pune when her father developed some health issues. Initially, Saloni stepped in to help her father with the daily business operations.
“Since I had grown up watching the processes, it was very easy for me to sort things out for him,” she says.
Gradually, she realised she was meant to take a bigger role in the organisation. Today, Saloni runs the company along with her sister, Niharika Jahagirdar, while Milind has taken on an advisory role. The company claims to have clocked over Rs 7 crore in both FY20 and FY21.
Surviving the pandemic and staying relevant
Until 2019, Jahagirdar Foods was an offline-heavy brand. However, thanks to COVID-19, the company has now a pan-India presence, along with a D2C website. The brand is also available on Amazon.
But, how did Jahagirdar Foods wake up to building an online presence?
It all started in 2020 when the pandemic began. Saloni says, “We suffered a lot of losses during the pandemic. We had not expected something like this to happen, and, therefore, we did not have any plan of action.”
She describes Jahagirdar Foods did not suffer a massive blow during the first wave since its outlets were selling essential items like bread.
Seeing this, the brand converted its website into an ecommerce platform in October 2020, which rescued the brand from the deadly second wave last year when shops were completely shut.
Today, the traditional FMCG company is deploying innovative strategies to stay relevant. For instance, Saloni says the brand is enhancing its online presence to ensure at least 30 percent of sales come from this channel by the end of this fiscal year.
The company is trying to align itself with the prevailing trends in the market. Saloni says Jahagirdar Foods will soon roll out a range of high-fibre products after it saw a surge in customers going health-conscious in the last two years.
Moreover, the company is giving out manufacturing franchisees in different regions to stay ahead of any supply chain disruption, unlike the nationwide lockdown during the pandemic.
Jahagirdar Foods expects this move will help expand its offline presence in geographies like northern and southern India.
Its long-term vision is to penetrate international markets, beginning with the neighbouring countries.
Saloni says, while the company is not worried about competition with traditional or new-age players, it is facing real competition from people who are baking or selling bakery items from home.
“This crop of home-based bakers is growing exponentially, and this was one set of competition we had not anticipated,” she says.