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| Gurnam Arora JMD, Kohinoor Foods |
Can we begin with the genesis of Kohinoor?
Kohinoor was formed by my brothers, Jugal Arora and Satnam Arora, and I. We come from Amritsar, Punjab, and were looking to start a business based from the city. Our parents were already in the business of foodgrains, and rice raw-material was one of them. Around 1978-79, the government of India allowed and encouraged Basmati to be exported by private parties. Since we were already familiar with this business, and the opportunity looked huge, we decided to get into it.
Like any other business, we had our share of start-up challenges. Since we were entering a business that was very new, there were no people with knowledge of the business to learn from, so every small detail of the business is something we had to discover ourselves. Also, those days, there was not much of funding available from bankers for rice trade. However, we concentrated on creating brands and procuring a good scale of orders. Once we did that, we had many banks approach us.
To keep it short, we not only had the passion to make a big business from Basmati, but also the skills and ability to make it happen – and that is how Kohinoor came into being.
Where did you find your early support coming from?
The biggest support that we got was the credibility in the business circles created by our father, the late Teerath Ram Arora. He had an extremely good rapport in the industry, and was known for his honesty, innovations, and hard-working nature. He passed on these and a lot of other
values to all the three of us, which I believe has been the key strength and has contributed a lot in the success of our organization.
Running a business with your brothers, how do you manage differences in opinions and strategies?
This factor can be challenging at times. There have been occasions where we have had differences in opinion. However, the confidence we have in each other and the strong commitment to work out those differences and be together helps in tiding over this challenge. For every difference in opinion, we have a healthy debate and anybody who can come up with the most logical explanation is allowed to take a lead in that matter. Once this decision is taken, there is no room for further arguments on the topic.
Since the beginning, we have had our responsibilities clearly delegated on the basis of expertise in a certain aspect of the business. For instance, I am good at marketing and brand-building, and hence I took up that challenge myself. Satnam always has been good with the export aspect and networking, so he took over those responsibilities. Jugal is an expert in procurements and running factories, so that responsibility was taken over by him. That said, we do discuss and decide business affairs on a day-to-day basis.
In the Basmati business how does one brand differentiate from others? Is it only advertising or is there something more?
It is said that a brand is something that is in the mind. The consistency in quality brings about the perception of brands out there in the markets. And it is the perception that helps you in selling it. Over a period of time, brand loyalty can be won only if the consumer sees the same quality, same length, same color, and so on.
Innovation is another factor that helps not only in differentiating, but also in growing the business. There is a lot that can done in this regard, and we have been very strong with our innovations.
So what kind of innovation happens in this line of business?
There is a lot of scope for innovation in packaging the product. With time one has to bring about advanced packaging that clicks with the consumers. Also, one has to constantly roll out new product lines, using new technologies and techniques. All these innovations need to make sure that when the rice is cooked it is top quality – in terms of length, breadth, aroma, taste, etc. When we started our business, the quality of Basmati was a big concern. For instance, it used to be very yellow in color. We were among the first ones to import machinery from Japan and make the rice whiter, look like pearls and feel like silk.
Another big area for innovation is the marketing of the product. Basmati was sold in 100 kg bags in an extremely unorganized manner. Innovation is when you can bring it to the table of the consumer by being present on all the best shelves in the world.
We also brought into the market concepts such as that of pre-cooked Basmati rice, where we put in a lot of vegetables and spices into it, such that you can make pulao effortlessly in a microwave. This clicked with foreign consumers, who wanted to eat Basmati but did not know how to actually go on about making it.
Where are the big markets?
Historically, the biggest market for Basmati has been Saudi Arabia. However, there are new one opening up where the scope is as huge, such as the Iranian market these days. This is followed by Europe, the United States, and the Middle East countries.
Even India is a big market. However, the Indian customer is a very price-conscious one. Our middle-class and upper middle-class families are budget conscious and do eat Basmati, but as soon as the price goes up, they tend to fall back to smaller broken Basmati rice.
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| SUCCESS MANTRA/ One has to be honest and hardworking. These two things are very important – the rest is your destiny. |
How is the processed food business doing?
It has a huge market. We are doing very well and are largely successful in this segment as well. We have launched these products in about 20 to 22 countries as of date. We are looking at reaching out to 5 to 6 new countries every year hereon. We have made it a point to be present in every country with the Indian diaspora.
We have number of products to offer in this segment, such as ready-to-eat meals, ready-to-eat combo meals, frozen curries, pastes, spices, etc. We have come to realize that these are being widely accepted and liked by consumers.
What in your opinion is the reason for the failure of many small players in the processed food segment?
One has to realize that this line of business is not a cottage industry, but a global business. Indian food has tremendous business potential when exported. However, for someone entering this segment, it is extremely important to know that the global market needs products that are of good quality, hygienic, etc. Now, if the people starting this business they need to keep all these things in mind, and add a strong marketing inclination. There is no reason for them to fail.
What are you doing differently in the processed food business?
First of all, we have a state-of-the-art factory in place. A good example of the quality of our plants would be that at no point of time is the food touched by hand. We have had many foreign buyers who have visited our factories and accredited them as the best in the country. Secondly, food needs be tasty. We have a team of excellent chefs who help us in developing new products and improvising on current ones. We also have a blind tasting exercise in place to ensure the quality of our products is matchless.
Hence, in short, what we do differently is produce the best of quality, best of taste, and best of packaging.
What would you say are the key challenges in the Basmati and processed food businesses?
Today, there are three types of Basmati approved by the government, namely, platinum, gold, and silver. One of the biggest challenges is to educate the consumer about these. Secondly, the government policy of taxing in this business is a big challenge to deal with.
As for the processed food business, I would again say the biggest challenge is the government policies one has to deal with. We are in talks with the government to consider a tax holiday for this segment of business. It is wrong of them to treat processed food as a luxury segment, as these foods are meant even for the common man. Now, unless and until this happens, this industry cannot flourish.
Thailand as of today processes more than 60 percent of its food. You see, food not processed and not consumed is wastage. In India we are only processing 10 to 12 percent of food as of now. The challenge is again favorable policies to create a huge market out of this.
What do you think is the key element that helps in taking your brand abroad?
You can only spread a business if you have a brand. If you do not have a brand, then you are a mere trader. We decided to create a brand, and that is what we did. First, we created the brand in India, and we took that overseas. When creating a brand, put in all that is required to make it a big brand. You have to be prepared to spend a lot of money, time, and effort in advertising, infrastructure, traveling, distribution channels, etc.
On the personal side, how much of time do you get to yourself now as compared to the beginning?
Well, in the beginning there was no set limit to the work hours. It used to stretch from 14 to 16 hours when we started off, but now about 8 hours is enough. One thing that I love doing in my free time is to play golf, which is a passion for me.
Are there any offshoot business ideas in your line of business for the aspiring entrepreneurs?
In my opinion, the food business in India is growing fast and will grow much bigger in the near future. This calls for an increase in the need for good packaging, good bottling, good bottle cap manufacturers, labels, cans, etc. We do not have enough people doing the right things when it comes to these, and these are in short supply. It is in these areas that a huge potential for aspiring entrepreneurs lies. So that when the food business grows big, they will be ready with all these provisions to make a good business themselves.
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written by Alberto E. Gongora, August 18, 2010
We are currently importing the 1 Kg Plastic Jar versions of the 'Finest Indian Basmati Rice' (White and Brown versions), for distribution to premium supermarkets, such as Auto Mercado, Walmart, Megasuper, and Cristal.
We are in the process of introducing the Heat & Eat products offered by Kohinoor Foods.
Offering Kohinoor Foods Premium Basmati Rice in 1 Kg sealed plastic jars has been a very important factor in being able to distribute to
supermarkets here in Costa Rica. Plastic jars allow the product to have a very long shelf life, way within industry standards.
The 'Finest Indian Basmati Rice' White & Brown version are truly outstanding products.
We are hoping Kohinoor Foods, Inc. will be able to offer their products through a warehouse in the Miami, Florida USA area in the near future. This would reduce our present inland freight charges. We currently consolidate from Edison, New Jersey to Miami, Florida. Our cargo is then shipped to Costa Rica via ocean freight to Puerto Limon (Atlantic Coast). Customers are paying a heavy price, but they are happy to get these magnificent products from India.
We are very pleased to work with Kohinoor Foods, Inc.
written by H. Vasanth Shenoy, March 29, 2010
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The best thing I found with them was they are very much down to earth and jovial with all the people around.
I miss them always.