Once a noodle brand to now a household staple: the Tops story of becoming a Rs 300 Cr company
Who doesn’t like noodles?
In the early 80s, when the demand for Chinese food grew in India, BM Seth started GD Foods, manufacturing noodles in a small facility in Delhi to meet the Chinese food demand in northern India.
In the following years, GD Foods rose to prominence, becoming a leading FMCG brand in India with a wide range of pickles, jams, and ketchup, among others, supplying through over 200 SKUs under the brand name: Tops.
In an interaction with SMBStory, Nitin Seth, a second-generation entrepreneur and the Vice Chairman of GD Foods, Tops, talks about the journey of the brand that became a household staple through word-of-mouth.
The partitioned ways
The 1947 partition of India and the formation of Pakistan witnessed mass exodus from both the nations. During this heart-wrenching episode, Nitin’s grandfather — Goverdhan Das Seth — at the age of 47 shut his three manufacturing units of cycle parts and brass utensils in Sargodha, Pakistan, handed over the keys to his neighbours, and travelled to India with the hope of returning to his business one day.
But that never happened.
He first came to Gwalior to pursue a job in a door frames manufacturing unit. The funds were sufficient to start his business, but he couldn’t scale it to the level he had left behind in Pakistan. He stayed there doing the job for 20 years, following which he moved to Gorakhpur, and then to Delhi.
Meanwhile, his youngest son BM Seth — who had strong business acumen — after completing his studies, decided to shape his father’s long overdue desire of running a successful business.
BM Seth started with the tent business and later had a small stint with the furnishing industry as well. Soon, he realised he could do well in the FMCG segment when the concept of fast food and Chinese food gradually picked pace in India.
Hence, with a small savings of Rs 20,000, he started a small manufacturing facility of noodles and branded it as Tops.
Beginning of Tops
BM Seth launched Tops in 1984 with the manufacturing of Chinese noodles in Delhi.
“My father came up with the first batch of noodles, but now the challenge was to sell it to consumers. Maggi, too, had come to India in 1983 but it was offering instant noodles, whereas our product was core Chinese noodles. We distributed flyers, put stickers around, used scooter stepenies as our marketing ground to reach the common household,” Nitin tells SMBStory.
In a matter of a few months, the demand for Tops noodles increased among households.
Soon, BM Seth realised that the Chinese cuisine and the fast-food segment in India lacked organised players that provide quality products, which further paved the way for the introduction of Tops culinary sauces and vinegar in 1990.
In the mid-90s, the brand zeroed down on pickles that were highly accepted by the Indian consumers. At present, Tops pickles are one of the fastest-selling SKUs within its entire product range, Nitin says.
Following his father’s footsteps, Nitin joined the family business in 1996, a time when globalisation was setting in, and the adoption of western culture was rising among Indian citizens. He saw the rise of the breakfast category in the food industry, and he soon seized the opportunity by introducing jams, cornflakes, and instant mixes to bolster Tops position in the breakfast segment.
In 36 years, the brand has launched a plethora of SKUs, including jellies, custard powder, cake mixes, choco flakes, among others. Tops’ products are available in over 1.5 lakh retail outlets pan-India, raking in Rs 300 crore annual turnover.
Perfect practice makes a man perfect
Projecting Tops impact on the customers, Nitin says the brand’s USP has always been to provide best-in-class food products at reasonable prices and become the preferred brand for its consumers.
For this reason, Tops has never spent huge sums of money on advertisements, as it would eventually add to the overhead cost of the end-product, with the brand losing its loyal customers.
“To date, we have grown widely through word-of-mouth, and we strongly believe in following the same practice,” Nitin says.
Tops products are available in pack sizes that suit a variety of usages — be it consumer packs for households, small individual or single-serve packs for quick service restaurants and hospitality industry, or big catering packs for the hospitality industry and institutions — there is a product for every need.
GD Foods has five manufacturing facilities located across Rajasthan, Uttar Pradesh, Delhi, and Punjab, and procures all its raw materials locally from India.
Serving the farmers
While the brand has been working on delighting its consumers, it also recognises its responsibility towards the farmers and society. Given the important role played by the Indian farmers in contributing to the economy and in feeding the nation, Tops created linkages with farmers on a contract farming basis for important produce like tomatoes, green chillies, etc.
This arrangement significantly helps the farmer in realising the reasonable value for their produce, irrespective of fluctuating market prices or impact of gluts and shortages.
“We are implementing this with 300 farming families over 700 acres of farmland, and intend to extend this to 5,000 acres of farmland to cover other raw material resources for the company in a couple of years,” Nitin says.
The company — as a gesture of relationship — also provides timely inputs on agricultural operations through experienced farm advisory services.
Challenges and the competition
With success comes challenges, and our business is no different, Nitin believes.
Being in the processed food segment, the company faces challenges like seasonality and the availability of a sustained supply of fruits and vegetables throughout the year, which can cause a sharp variation in the input costs.
Although the products are sold at the same price all through the year, the company relies on buying all the raw materials in bulk during the season, which requires a sizable investment capability and blocks the company’s capital.
Another challenge, Nitin says, was for the brand to stay relevant in the competitive market. With household income rising and schedules getting busier by the day, customers are constantly looking for new and innovative products.
To that effect, Nitin adds, the company has been working diligently to keep up with the customer’s expectations, looking out for constant product innovation.
Food being one of the safest bets in business, the segment is subjected to a lot of competition from both large multinationals that have deep pockets to advertise and promote their products, as well as smaller players that have lower overheads, and perhaps not so stringent processes and quality checks, enabling them to undercut prices.
The Indian food and grocery market is the world’s sixth-largest, with retail contributing 70 percent of the sales. The Indian food processing industry accounts for 32 percent of the country’s total food market — one of the largest industries in India — and is ranked fifth in terms of production, consumption, export, and expected growth.
The processed food market is expected to grow to $543 billion in 2020. Nitin says the Indian food industry has to comply with a lot of regulations and compliances, and since Tops belongs to a developing country, rules do change rapidly.
It entails always being on one’s toes all the time, and being ready to change as and when the rules change, which could mean a change in packaging to be implemented or any other compliance requiring significant time, effort, and investment.
The way ahead
Aiming to launch around 100 more SKUs in the near future, Nitin says the company has seen a gradual shift in the preferences of the consumers towards products offering healthy and convenience options in recent years.
The COVID-19 pandemic has propelled a large number of consumers to cook at home, who have become conscious about their health and immunity greater than ever.
Understanding the consumer needs, Nitin says the brand is working on introducing a variety of offerings to help them save time and effort in their daily cooking, and provide food options that deliver more nutrition per serving.
This opens a whole new dimension for products that are fortified with vitamins and minerals, as well as those, which offer a higher nutraceutical value. All in all, the future looks promising for the food industry, and Tops is upbeat about it as well.
Edited by Suman Singh