INDIAN FOOD INDUSTRY India is the world's second largest producer of food next to China, and has the

potential of being the biggest with the food and agricultural sector. The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and food processing technologies, skills and equipment, especially in areas of Canning, Dairy and Food Processing, Specialty Processing, Packaging, Frozen Food/Refrigeration and Thermo Processing. Fruits & Vegetables, Fisheries, Milk & Milk Products, Meat & Poultry, Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grains are important sub-sectors of the food processing industry. Health foods and health food supplements are another rapidly rising segment of this industry which is gaining vast popularity amongst the health conscious. India is one of the worlds major food producers but accounts for less than 1.5 per cent of international food trade. This indicates vast scope for both investors and exporters. Food exports in 1998 stood at US $5.8 billion whereas the world total was US $438 billion. The Indian food industries sales turnover is Rs 140,000 crore (1 crore = 10 million) annually as at the start of year 2000. The industry has the highest number of plants approved by the US Food and Drug Administration (FDA) outside the USA. India's food processing sector covers fruit and vegetables; meat and poultry; milk and milk products, alcoholic beverages, fisheries, plantation, grain processing and other consumer product groups like confectionery, chocolates and cocoa products, Soya-based products, mineral water, high protein foods etc. We cover an exhaustive database of an array of suppliers, manufacturers, exporters and importers widely dealing in sectors like the -Food Industry, Dairy processing, Indian beverage industry etc. We also cover sectors like dairy plants, canning, bottling plants, packaging industries, process machinery etc. The most promising sub-sectors includes -Soft-drink bottling, Confectionery

manufacture, Fishing, aquaculture, Grain-milling and grain-based products, Meat and

poultry processing, Alcoholic beverages, Milk processing, Tomato paste, Fast-food, Ready-to-eat breakfast cereals, Food additives, flavors etc. Food industry by and large includes all the food items but we have focused basically on supplementary food products. There are many companies who provide such supplementary food items. Some of those companies are M.T.R, M.D.H, Ramdev masala, Ganesh papad, zamku papad, mahila griha udhyog, haldiram, Falguni jain mahila gruh udhyog, devika mahila gruh udhyog ,swad mahila gruh udhyog etc. SHRI MAHILA GRIHA UDHYOG INTRODUCTION It all began on 15th march 1959, which was a warm summer day with the sun shining brightly in the cloudless sky. A majority of the women inhabitants of an old residential building in Girgaum (a thickly populated area of South Bombay), were busy attending their usual domestic chores. A few of them, seven to be exact gathered on the terrace of the building and started a small inconspicuous function. The function ended shortly, the result - production of 4 packets of Papads and a firm resolves to continue production. This pioneer batch of 7 ladies had set the ball rolling. As the days went by, the additions to this initial group of 7 was ever-increasing. The institution began to grow. The early days were not easy. The institution has its trials and tribulation. The faith and patience of the members were put to test on several occasion - they had no money and started on a borrowed sum of Rs. 80/-. Self-reliance was the policy and no monetary help was to be sought (not even voluntarily offered donations). So work started on commercial footing.

With quality consciousness as the principle that guided production, Lijjat grew to be the flourishing and successful organization that it is today. Why name is Shri Mahila Griha Udyog? Mahila means women: The unique characteristic of the organization is that all members of the organization are female. Griha means home: The raw materials which are used by the member sisters are household so they can do their work from home. Udyog means business: The organization does the business very wisely. They do not do any adulterations or malpractices. It is a pure business. HISTORY: On March 15, 1959, they gathered on the terrace of their building and started with the production of 4 packets of Papads. They started selling the papads to a known merchant in Bhuleshwar. From the beginning, the women had decided that they would not approach anyone for donations or help, even if the organization incurred losses. Chaganlal Karamsi Parekh, popularly known as Chaganbapa, became their guide. Initially, the women were making two different qualities of papads, in order to sell the inferior one at a cheaper rate. Chaganbapa advised them to make a standard papad and asked them never to compromise on quality. He emphasized to them the importance of running it as a business enterprise and maintaining proper accounts. In 1962, the name Lijjat (Gujarati for "tasty") was chosen by the group for its products. The name was suggested by Dhirajben Ruparel, was chosen in a contest held for the purpose, with prize money of Rs. 5. The organization was named Shri Mahila Griha Udyog Lijjat Papad. By 1962-63, its annual sales of papads touched Rs. 1.82 lakh. In July 1966, Lijjat registered itself as a society under the Societies Registration Act 1860[. In
3

the same month, on Chaganbapa's recommendation, U N Deodhar, the chairman of KVIC personally inspected the Lijjat. KVIC or Khadi Development and Village Industries Commission are a statutory body set up by the Government of India for development of rural industries. In September 1966, KVIC formally recognized Lijjat as a unit belonging to the "processing of cereals and pulses industry group" under the Khadi and Village Industries Act. It was also recognized as a "village industry". In 1966, KVIC granted it a working capital of Rs. 8 lakhs (0.8 million) and was allowed certain tax exemptions. The first branch outside Maharashtra was established at Valod, Gujarat in 1968. After tasting tremendous success with their papads, Lijjat began producing other products like khakhra (1974), masala (1976), vadi, wheat atta, and bakery products (1979). In 1970s, Lijjat set up flour mills (1975), printing division (1977) and polypropylene packing division (1978). The group also initiated some unsuccessful ventures such as cottage leather (1979), matches (1979), and agarbattis (incense sticks In 1985, the Lijjat branch at Jabalpur was taken over by one Shantilal Shah as his own unit, which he ran with the help of a Sanchalika (branch head), who was wife of his employee. Lijjat went through tremendous pressures and court stay orders to retrieve the situation In 1987, Lijjat purchased new premises at Kamal Apartments in Bandra, a suburb of Mumbai. The registered office shifted to the Bandra with effect from July 1988[7]. In 1988, Lijjat entered the soap market with Sasa detergent and soap[16].. Sasa had annual sales of Rs 8 500 million, accounting for 17 percent of Lijjat's total turnover in 1998. In March 1996, the 50th branch of Lijjat was inaugurated in Mumbai In the 1980s and 1990s, Lijjat started attracted attention of foreign visitors and officials. The VicePresident of Uganda, Dr. Speciosa Wandira-Kasibwe, visited Lijjat's central office in January 1996, since she wanted to start a similar institution in Uganda. Lijjat started exporting its products with the help of merchant importers in the United Kingdom, the United States, the Middle East, Singapore, the Netherlands Thailand, and other countries. Its annual exports accounted for more than US$ 3.2 million in 2009. As its popularity grow, Lijjat started facing the problem of fake Lijjat papads being introduced in the
4

market. In June 2001, three persons were arrested in this connection, in Bihar]. Lijjat's website explains the identification features of original Lijjat papads in 2009; Lijjat had a turnover of Rs 3.5 billion and exports worth Rs.170 million. It employed 42,000 people in 62 divisions all over the country. The 69nd branch became operational at Jammu and Kashmir in 2002, enrolling over 150 members. Lijjat marks its 50th year of existence on March 15 2009 Founders: Seven women with no special skills but a strong determination to earn dignity as individuals  Jaswantiben Jamnadas Popat  Parvatiben Ramdas Thodani  Ujamben Narandas Kundalia  Banuben N. Tanna  Laguben Amritlar Gokani  Jayaben V. Vithalani Objectives: When industry starts some basic thoughts or some objectives are there. In cases of cooperatives organization Objectives of that organization became very important to runs Successful business. lijjat also have some Objectives to run their business there are as follows :  It is a voluntary organization of sisters.

 The organization is neither for the poor sisters nor for the rich ones-poor Sisters should remove the thoughts of poverty from should their mind and the rich sisters remove thoughts of their affluence.  It never accepts charity or grant.  It believes in running the business wisely and with practice good business ethics with dealers and consumers.  The organization strictly observes the practice of maintaining the accounts regularly, writing the books daily and preparing balance sheets every month.  The organization is like a family and sisters run it as if they all belong to the same family.  The organization is like a revered place of worship of one can change these basic thoughts of the organization. CORE VALUES: Shri Mahila Griha Udyog Lijjat Papad is synthesis of three different concepts, namely: 1. The concept of Business. 2. The concept of Family. 3. The concept of Devotion. THREE GOLDEN RULES: Besides basic principles like self-reliance, co-ownership and faith in dignity of labour, the institution has also formed three Golden Rules to business lijjat try to follow their three Golden rules at any cost in all branches in all over India 1. All the rights of the institution must belong to members only. 2. There must be maintenance of Lijjat quality at any cost.
6

3. There must be clean and time bound accounting system. All the Lijjat branches follow these three Golden Rules

LIJJAT PAPAD Be it an evening snack, or a banquet or a meal at home, The Papad finds its due place on the dining table. Indian meal is incomplete without it, and Indias biggest Papad success story is Undoubtedly, Lijjat. Lijjat means tasty: Earlier they do not had any name of the organization but after a few years they had decided to give name which is LIJJAT MARKETING MIX PRODUCTS Lijjats most famous product is papad. Papad is their many and along product in market. In starting they use to make only two kinds of papad in order to sell the inferior one at a cheaper rate. Then lijjat started making differenced flavors of papad. After establishing lijjat into papad business they made entry into new products. 1988, Lijjat entered the soap market with Sasa detergent and soap. THE LIST OF PRODUCTS AVAILABLE:  Papad (five flavors: lasan, moong, mirch, Punjabi and urad available in100g, 200 gm., 250 gm., 1kg and 2.5 kg. )  Khakhra  Appalam  Masala  Vadi  Gehu Atta(Wheat flour)  Bakery products  Chapati
8

 SASA Detergent Powder  SASA Detergent Cake (Tikia)  SASA ilam Detergent powder  SASA Liquid Detergent Packaging Process: The institution itself carries out the packaging process instead of having collaboration with others. These plastic bags are manufactured without any technical help or machinery; instead it is hand-made. These employees are also women. The packaging department comprises of 70 sister members. The bags that are used for packing papads are Polpopryin (PP) bags. These bags are manufactured at a factory situated at Dahisar. Because of this it prevents duplication of their product. Quality Check: The papads are prepared in different parts of India, the quality of the water used usually varies, and so can the quality of final product. To prevent any inconsistencies, Lijjat has its own laboratory in Mumbai, where the final products are tested and coded. In the monthly meetings, the quality issue and modifications are tested. Ingredients purchased and distributed by the Central Office to maintain the quality. Procurement of Ingredients  Udad dal from Myanmar  Asafetida from Iran  Black Pepper from Kerala Surprise visits to various branches to ensure production conditions are hygienic. When a new branch of Lijjat opens, a neighboring Lijjat branch helps it by guiding and training new members. Successive failures of a branch to abide by the organization's philosophy of consistent quality and production of papads, the central committee reduces the daily wages of its members by 1 rupee.

PLACE Lijjat is spread over in seventeen Indian states. It has many Branches in many in states of India. It almost has about 69 Branches in all part of India. It is well settled in western part of India for e.g. in Maharashtra and Gujarat. In 1968 first branch outside Maharashtra was established at Valod, Gujarat .lijjat started first branch in M.P the first branch was in 1985, the Lijjat branch at Jabalpur. Lijjat have branch visually all states of India. Exports accounts for Rs 170 million, merchant exports Major countries are UK, USA, Australia and European Countries. PRICE Shri Mahila Griha Udyog Lijjat papad adopts a Cost plus Pricing Strategy for all their products. The Lijjat products are targeted at the middle and lower segments of society. These segments are highly price sensitive and hence this method of pricing allows them to market their products extensively. While calculating the price the following expenses are taken into consideration:  Cost of Raw material  Rolling Charges  Packaging Costs  Selling Expenses

10

Consumer price list

Items

Small Size 100 gms mini size 200 gms small size 200 gms Big size 250 gms Small / Big size 500 gms Small / Big size 1 kg. Small / Big Size 2.5 kg.

Udad with Peppe r 18.00

Udad with Garlic & Chillies 18.00

Udad with Red Chillies 18.00

Moong (50% Udad & 50% Moong) 20.00

Udad Special

20.00

Moong Punjabi Special(50% Masala Udad & 50% Special Moong) 20.00 20.00

36.00 36.00

36.00 36.00

36.00 36.00

40.00 40.00

40.00 40.00

40.00 40.00

40.00 40.00

45.00 85.00

45.00 85.00

45.00 85.00

49.00 95.00

49.00 95.00

49.00 95.00

49.00 95.00

168.0 0 415.0 0

168.00 415.00

168.00 415.00

185.00 460.00

185.00 460.00

185.00 460.00

185.00 460.00

(Source: http://www.lijjat.com/pricelist.asp?id-depat=28 , downloaded on: 27th , march,2011)

11

Price Export price list Export price are different of the prices within India. Export price are high as compare to prices in India. So lijjat earn more profit through export as compare to India

(source: http://www.lijjat.com/pricelist.asp?id-depat=24, downloaded on: 27th , march,2011)

PROMOTION At Shri Mahila Griha Udyog Lijjat Papad, they believe that the best promotion they could possibly receive is by word of mouth. Therefore they concentrate more on cost Effectiveness and quality rather than on more expensive modes of promotion like Advertisements. Therefore annual expense on advertisement and promotion amounts to Rs. 60 lakes, about merely 0.2% of total turnover. The extremely famous bunny rabbit campaign continues to be aired on specific regional channels. For e.g. Alpha Guajarati, Alpha Bengali, Sun etc. They also advertise in English and regional newspapers. The distributors also need to be motivated properly, so that they in turn make a greater effort to sell large volumes of the products to the retailers. Targets are set quarterly for the distributors i.e. should they exceed this target; the distributor will receive a further 1% discount.

Advertising

13

In starting, the advertising was undertaken through the vernacular newspapers, television and radio. The money for advertisements was spent by the Polypropylene Division, which recovered the same by adding it to the price of the bags that it supplied to all the branches and divisions throughout India. Brand is having the strength of Consistently Good Quality as its POD communicated its Crispness and quality through ads. Ads feature a Bunny (mascot) and jingle Khurram Kharram. Aired on specific regional channels e.g. Alpha Gujrati, Sun TV etc

14

DISTRIBUTION

(source:http://en.wikipedia.org/wiki/file:SMGULP-collection-flowchart.png, downloaded on: 27, march,2011) Their distributors pick up the quantity of papad they require and pay cash on delivery because they pay their bens (members are called bens, or sisters) every day. Since they

15

have an estimate of the quantity each distributor takes, they produce accordingly. This ensures that they neither stock inventory nor pay heavily for storage. They have about 32 distributors in Mumbai. Each distributor picks up an average of 100 boxes per day from the depot. This is where their job ends. They are not involved in how and where a distributor delivers as long as he stays within the area they have marked for him. Generally each distributor has his three-wheeler and about eight to ten salesmen to deliver to retail outlets within his territory. To select a distributor, they first give an advertisement in newspapers for the areas they have marked. Members from their marketing division personally go and check the godown facilities and only on their approval do they appoint distributors. A distributor pays them Rs 150,000 as deposit. They make it clear to them that they must pay on delivery if they want our distributorship. This system is followed all over India and it works well for them. When they discover that there is demand in a particular place, they open a new branch, like the recently opened one in Jammu and Kashmir. Whether or not they have a centre in an area, their goods reach there. For example, they do not have any centre in Goa, but they have appointed a distributor for that area to ensure that Lijjat papads reach Goa. Their communication with distributors is regular through monthly meetings where they discuss their problems and also the issues that they may have about quality, price, reach, etc. They do not have individual door-to-door salesmen or women selling from homes only the appointed distributor for the area. The same system is followed for other products, but they may have different distributors and depots for different products

16

MARKET SHARE Lijjat papad occupies 90% of the papad market in India. In spices and detergent industry the market share is 15-20 percent. SWOT ANALYSIS Strengths:  Sincere Hard work  Development of woman by providing them a living / Employment.  Maintaining the same standard over the last 50 years.  Having a unique status in the country.  Family owned and flat structure  Women can work at home also Weakness:  Lack of marketing skills  Less use of technology  Limited capital Opportunities:  Expanding horizontally as well as vertically

17

 Increasing export  Business can be made sustainable/profitable without high initial investment

Threats:  In the Papad industry, the major competition or threat is posed to the institution by Ganesh Papad  In the spices industry, the Haldiram and MDH are the major competitors  In detergent, there are many competitors like HUL, P&G etc.  Even face competition from local player like Jainam papad, rucikar papad, zamku papad

18

Bibilioghaphy:  http://en.wikipedia.org/wiki/file:SMGULP-collection-flowchart.png  http://www.lijjat.com/pricelist.asp?id-depat=28  http://www.lijjat.com/pricelist.asp?id-depat=24  http://www.lijjat.com/content.asp?id-section=6  http://en.wikipedia.org/wiki/shri_mahila_gruha_udhyog_lijjat_papad  http://www.indianfoodindustry.net/

19