Balaji Wafers: Puncturing Lay's since 1981

Don’t underestimate the power of a common man, Minamma!!

Whether a common man from movies or real life, every being is born with the strength to change the world. All they need is a solid amount of determination, a slight pinch of luck, and loads of hard work. This concoction is bound to bring success knocking on your doors. 

And when this recipe gets the added touch of a secret ingredient, just like Lay’s biggest competitor in India has, then the result is presented in the form of a ₹4000 Crore empire. Wondering what the secret ingredient is and which company has it? 

First, get into the bingeing (umm….reading) mode with a crisp packet of potato chips and namkeen wafers. Because I am going to give you a tour of how a common man succeeded in reducing the presence of the snacks giant Lay’s in India.

And if you grabbed one of Balaji Wafer's products, then you are enjoying the fruits of a rags-to-riches story that has all the elements of an inspirational movie script…

A protagonist filled with the potential to create a bright future, difficult circumstances blocking the path to success, and that taste of victory after toiling away with determination and strong willpower. 

Presenting Pranay Chandubhai Virani, the founder of Balaji Wafers and the snack king of western India.

Chandubhai's First Bite and its Bittersweet Aftertaste

Part of a farmer’s family, Chandubhai Virani had a simple life in the Dhun-Dhoraji village in Jamnagar, Gujarat. The year is 1972, and rainfall is scarce, making lives difficult for the Virani family. As a result of failed farming produce, father Popatbhai Virani gave his sons Chandubhai (then 17), Bhikhubhai, Kanubhai, and Meghjibhai an amount of ₹20,000 to start a new business. Popatbhai collected this amount by selling his land, which failed to give good produce for the past few years.

The brothers packed their bags and travelled 90 km away to Rajkot in search of an opportunity. Being around the agricultural industry since an early age, they chose the fertiliser sector to initiate their business. This idea turned out to be the first of many in the list of unfortunate failures. 

Thus began the fertiliser and farm implement business, through which the brothers hoped to create a fulfilling life for themselves. But, being unaware of the cut-throat world worked against them, as the naive brothers were fooled by their distributors, who gave them duplicate materials. This caused their business to collapse overnight, leading the Virani brothers back to square one. The only change from the time they started the business two years before was that they now had nothing in the name of capital. 

You might have heard how kosish karne valo ki kabhi haar nahi hoti (Me being the absolute exception). Losing all the money didn’t break their spirits, as they were unwilling to return to their village empty-handed. Believing in the idea of ‘no job being small’ since birth, Chandubhai and Bhikhubhai started working as a gatekeeper & canteen boys at Astron Cinema in Rajkot. With a meagre salary of ₹90 per month, they were making ends meet with difficulty. 

Sincerity and hard work always pay off, no matter the status of the people involved. The cinema’s owner, Govind Khunt had parkhi nazar, as he recognised the promising potential in the Virani brothers. He gave the Astron Cinema’s canteen contract to Chandubhai, marking the beginning of a grand empire valued to be around ₹4000 Crore.

Balaji Wafers: Chips for All

Virani’s started selling delicious potato chips in the Astron theatre every day in 1974. The brothers' good behaviour and smart business skills made their chips famous throughout the theatre. Plus, it had the advantage of containing that homemade taste which reminded people of their childhood days. Ahaa.. maa ke hath ka swaad.

By 1981, Chandubhai and his brothers were making chips in their small one-room apartment. These potato chips were delicious and much healthier, leading to an increase in demand. These factors contributed to the selling of around 50-60 kg of potato chips daily. 

The business was going solid. So, Virani’s decided to make things more official by choosing the name “Balaji” for their business. The credit for the name goes to the statue of God Balaji situated in the canteen since the beginning of the Virani’s journey. 

Seeing good revenue from the canteen contract, they expanded the potato chips distribution to other shopkeepers by 1984. Here, they met a hurdle in the form of selfish retailers. Many retailers started refusing to pay for the chips sold by giving absurd excuses, claiming the quality of the chips to be bad. Because the distribution of chips was solely dependent upon these retailers, Chandubhai didn’t have any power to change the dynamics.  

Here, dear readers, the infamous stubborn streak of Chandubhai came to the rescue. Taking charge, the Virani brothers took their business to wheels and started delivering the chips on their own using bicycles. This way, the deliveries were made on time, the quality of the products was not compromised, and they were also saving costs for the distribution channel. 

It is often advised to look for a window when the door of opportunity closes. Chandubhai does just that with all the hurdles that pop his way.

Balaji Wafers: Entering the Next Levels

Unlike other brands, Balaji Wafers took its time in expanding its business. For many years, they only produced and sold potato chips. As per their official website, Balaji Wafers Pvt. Ltd. expanded their product line to namkeen and other snacks in 2002.  

By 1989, Balaji Wafers were aiming big as they initiated the flight to the next level by installing a semi-automated plant. The plant was located in their then-single distribution location, Rajkot. A loan of ₹50 lakh from banks and others became the key to taking the leap from a normal chip distributor to an expanding business spread throughout Gujarat.

With this plant, they were able to produce large amounts of potato chips at once with the supervision of an operator. The semi-automated plant helped Balaji Wafers in two ways: one, the quality of the product got much better, with mass production becoming possible in considerably less time. 

Another benefit was the refined handling of hygienic concerns. Everything from raw materials to the packaging of finished goods was now being monitored accurately.  

In 1995, Balaji Wafers became a private limited company as they registered officially. They also expanded from a limited portfolio of potato chips and sandwiches to other namkeen and snack items by 2002. 

After this expansion from simply salted potato chips to namkeen products, Balaji Wafers got into reaching more audiences in Gujarat, Maharashtra, and Rajasthan. For this, they soon promoted from a semi-automated plant in Rajkot (2002) to a fully automated plant in Valsad by 2008, which was the largest of its time.

Balaji Wafers: Sultan of Wafers

Just like a hardworking colony of ants, Balaji Wafers hiked its mountain of success one step at a time. At present, after four decades over, they are one of the top 5 chips and snacks manufacturing brands in India, with a market share of 10.7%.

Now you know how Balaji Wafers Pvt. Ltd. covered the distance from an annual turnover of ₹50,000 in 1982 to over ₹2,000 crore rupees in 2022. Dominating with a market share of 90% in Gujarat, Balaji Wafers is everywhere in their origin state. Neighbouring states,  Maharashtra & Rajasthan, show a whopping 60-70% standing. Even Goa & Madhya Pradesh provides a good 40% market share for the company.

The strong distribution network, exquisite taste, and superb quality helped crown Balaji Wafers Pvt. Ltd. as the “Sultan of Wafers.” (Recognised by The Economic Times). They are also a respectable member of the Snack Food Association (SFA), an international association for the snack industry. 

This dominance was proved yet again when one of its biggest competitors, Pepsico Group, wished to purchase the company from Virani's. But, Chandubhai was adamant about not selling the company whom he thinks of as family.    

What's Next for Balaji Wafers?

After being carried from the ground by Chandubhai and his brothers, the reigns of the company’s future now fall on the next generation’s shoulders. Director Keyur Virani and Marketing Director Mihir Virani, sons of Bhiku, with Shyam Virani as Director, make up the new management in Balaji Wafers Pvt. Ltd. 

Focusing more on keeping pace with the advancing technology, the new generation’s plan includes increasing the adaptation of automation in the four plants of Balaji wafers. This operation is mainly headed by Keyur Virani, who has a high interest in tech-savvy equipment. A prime example is the installation of the PC 42 plant to deal with the lack of revenue during the lockdown. Director Keyur believes that with automation being a part of the brand, human error will reduce, causing a direct improvement in the quality and quantity of their products.

Spreading the Taste of Balaji Pan India

From Simply Salted Potato Chips to Chataka Pataka Snacks, Balaji Wafers has come a long way in just four decades. With over 51+ varieties in the product range, such as Chaat Chaska and Cream Onion, side products like Gippi Noodles make up the large distribution network of 800+ distributors with 93+ SKUs (Stock Keeping Units). 

Among many distributors, loyal retailers, and efficient supply chains, the secret ingredient for this successful mix was knowing exactly what the targeted audience wanted. 

Within a unified nation, people from various sectors live together. These people have diversified beliefs and tastes, which were expertly aimed at by Balaji Wafers. From launching products for the spice-favouring palate of Maharashtra, to namkeen product range for Gujarat, Balaji Wafers sure knows what India loves to eat. 

This technique is also being followed by competitors like Lay’s and Haldirams, but no one can beat Balaji Wafers in knowing what consumers crave. After all, this strategy has been one of the core factors behind the brand’s tremendous success.

With the power of this smart tactic, Balaji Wafers Pvt. Ltd. is now getting ready to take charge of the complete nation’s snack cravings. With their announcement to be a PAN India company in the near future, Balaji is planning to start at least three new plants in the next five years. The first of the plants' establishment for national domination has already begun in Uttar Pradesh.

Balaji Wafers also has collaborations with several suppliers to make their distribution line hitch-free. At present, they are producing 500 kilograms of chips per hour. For the Pan-India move, they wish to elevate this capacity to three-to-four metric tons per hour. Some well-known suppliers who collaborate with Balaji Wafers are Ishida, Kanchan Metals, Daifuku, Signode and Sumra. 

Balaji Wafers: Rivalry With Lay's

Amid Balaji Wafers’ move to go national, one of the biggest roadblocks for the homemade brand is none other than Lay’s. Pepsico’s subsidiary Frito Lay aka Lay’s has been dominating the chips market for a long time now. But the arrival of regional brands such as Balaji Wafers, Haldirams, etc., has been slowly replacing Lay’s from people’s minds.

From having a 50% market share in 2016 to 22% in 2022, Lay’s, the worldwide popular chips & wafers manufacturing company, sure has seen better days. Despite being tasty and trendy with numerous varieties, Lay’s kept its quantity minimum. Balaji Wafers targeted this shortcoming as they give more quantity in the same price range. Along with this, Balaji Wafers focused on becoming one brand for all tastes, thus manufacturing a variety of flavours, both national and international. Products like Sev Bhujia and Moong Dal impressed people who prefer the more local Indian palates, whereas the Cream & Onion wafers from Balaji attract people who prefer foreign tastes in snacks.

This caused Lay’s to lose lots of customers from Balaji-dominating states in the western part of India. Balaji Wafers even poked jokes at its competitors about the presence of more hawa inside “ordinary chips” (we all know who they are talking about). 

With the punchy line of Ho Gye na Hawa ke Shikaar?, Balaji Wafers markets one big factor that makes them a better choice than the international brand Lay’s. Plus, selecting Ayushman Khurana for the advertisement was a great choice as the actor is known for his comic timing and great screen presence.

Balaji Wafers: No Patent for Lay's

Facing issues in terms of quantity is not the only issue Lay’s has to face in India. With the uprising of “Make in India,” all international brands have started to face difficulties maintaining their dominant status. 

One such incident took place with the giant chips brand in September 2022, when Pepsico sued nine farmers from western Gujarat. The allegation was based on growing and selling the FC5 variety of potatoes, which Pepsico has patented. The speciality of the FC5 variety is its low moisture content, which makes it perfect for preparing potato chips and similar snacks. 

Apparently, Pepsico provides the FC5 seed variety to around 12,000 farmers, who then sell the crop at a fixed price. So, when Lay’s found out about the nine farmers growing their IPR-covered potato variety, they charged those farmers, claiming rights over the variety. 

It’s not a surprise that the charges Lay’s put on these farmers were highly opposed by Indian citizens. One farmer’s rights activist, Kavitha Kuruganti, petitioned the Protection of Plant Varieties and Farmers' Rights (PPVFR) Authority to revoke Lay’s patent over the FC5 variety. As this move allowed more freedom for Indian farmers to produce and sell crops freely, it was accepted legally, resulting in Lay’s losing a big fight in the nation.

This incident brought a backlash for Lay’s, and the overwhelming presence from local brands like Balaji has now reduced its revenue to a large extent, especially when compared to a few years ago.

The Bottom Line

Hence concludes the story of a hard-working, simple man with dreams to conquer the world. Chandubhai Virani’s Balaji Wafers is sure on the way to extending its wings for the big flight. Though the company is not listed on any stock exchange, the brand is still considered to be a behemoth in the snack market.

With the core value of customer satisfaction, the outspread of Balaji Wafers in other states of the nation would be a wonderful sight to behold.

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