this ppt is the case study of the success story of harvest gold

1. Harvest Gold case study
By
Abhishek jain
Girija bihani
Nitya misra

2. HARVEST GOLD:
ORIGINS
• Adil Hassan was a chemical engineer from
IIT Delhi, who switched to making bread
with an investment of Rs. 10 million.
• They hit upon the idea of bread-making
when they failed to find fresh and decent
bread in Delhi.
• Adil Hassan and Taab Siddiqui
commissioned their plant as Harvest Gold
Foods India Pvt. Ltd. and commenced
production in June 1993, at its state-of-the-
art facility at Bhiwadi, Rajasthan (installed
capacity: 75,000 loaves of 800 gm each a
day) with a premium range of Harvest Gold
white bread in 400 gm (Price Rs 7 a loaf)
and 800 gm (Rs 13).

3. Initial success
• The product was an instant hit with a
Rs. 400 million turnover in just five
years.
• They further diversified into related
products like hamburger buns, pizza
base, etc.
• Earlier there was a domination of two
manufacturers —Modern and
Britannia.
• Demand was high and supply
inadequate; hence whatever was
produced was sold.

4. Market scenario
• Bread was sold in wax papers.
• People used to stand in queue for hours for delivery vans to get their loaves
of Britannia and Modern breads.
• Other competitors like Taaza and Bakemans were not so popular.
• every state had its own local brand.
• Short shelf life of bread made it difficult for big players to distribute bread
at distant places.
• From 1995-96 up to 1998-99, Britannia bread market share witnessed a fall
due to the stiff competition from Modern Foods.
• Still Britannia could manage to regain its shape due to the takeover of
Modern Foods and the time spent in its restructuring.
• Again that could not last long and Britannia faced some problem in its
distribution of bread.
• This particular crisis was the reason behind Harvest Gold’s success as the
market leaders were fighting with their destinies.

5. Turning point
• Harvest Gold did not have any distributor for its
bread at that time; so, it approached the
distributors of Britannia and Modern.
• These distributors agreed to keep a stock of
Harvest Gold bread and sell it whenever there was
a demand for it.
• It also approached the Nirulas for keeping its
bread on their counters. But everything took a
turn when customer response turned out to be
overwhelming.

6. Preceding 2 years
• Within a span of two years, Harvest Gold had a turnover of more than Rs.
1.2 billion with one plant, one city, and one product.
• Its only plant was in Bhiwadi from where all its products were distributed.
• What was most remarkable was the company’s distribution system – the
trucks were painted with Harvest Gold’s name and logo— a true example
of mobile branding.
• This was a case of a local player taking on a big brand and emerging as
the market leader within a span of just one to two years of launch.

7. Product line and market share
• Normal white bread, sandwich
bread, Bombay pav, burger bun,
brown bread, kulcha, pizza base,
sweet bun and milk rusk, daliya
(Porridge) bread, garlic bread,
multi-grain bread and atta (wheat
flour).
• Acquired 80 per cent of the bread
market in Delhi and NCR and
headed a Rs. 1.2 billion business
that employed 800 people and
supplied 2, 50,000 loaves per day.
• Each 380 gm loaf was priced at Rs
11 and 800 gms at Rs 20 in Delhi.
For other states, there was an
addition of Rs 1 or 2 per loaf.

8. Size of the Indian Bread Industry
Unorganised sector
• Growth rate: 6 per cent
• contributed around 55per cent of the
total bread production.
• consisted of an estimated 75,000
bread bakers mostly located in the
residential areas of cities and towns.
• Thirty-five per cent of the total
production came from the small scale
sector with about 1,500-1,800 units in
operation.
Organized sector
• Growth rate: 8 per cent.
• contributed around 45 per cent of
total bread production.
• consisted of around 1,800 small
scale bread manufactures around
the country, besides 25medium
scale manufacturers and 2 large
scale industries

9. packaging
• Highly perishable item, having a shelf-life of a
maximum of 72 hours.
• Government norms: mandatory to stamp the date and
time of manufacture and expiry on the packet.
• They introduced transparent sheets where consumer
could have a look at the product without opening the
pack.
• At a time when the competitors were using wax paper
for packaging, Harvest Gold started using a clear,
cellophane wrap with a signature red base.
• Then, the expected happened — tangy dollops of
plagiarism pervaded the bread market.

10. Need for Branding
• Soon, shop shelves were stocked with cellophane-wrapped
bread-brands with logos, packaging, and even names having
the same touch and feel as Harvest Gold.
• Taab Siddiqui and her team were confident that they still did
not taste like their bread. But they felt the need to create a
brand in the minds of the consumers.
• By the end of 1997, it became clear that to stand apart from
the nationwide bin of wannabes — Honey Dew Gold
(Delhi), Taaza Gold (Faridabad), Golden Harvest (Calcutta),
Spenser-Gold (Goa), Everest Gold (Chandigarh), etc. —
Harvest Gold would have to knead out a unique brand
strategy for generating consumer pull.

11. Marketing
• Used funny tone and consumer
understandable language.
• The campaign comprised
weekly 80cc and 60cc print
ads that were similar in look
and feel, and used a limerick
to parody or comment on an
everyday issue, be it Bill Gates
or the Delhi winter.
• The advertisement even made
a dig at itself: ―Bakwaas
Advertising. First Class
Bread.” Humour worked in
this case because it used the
lowest common denominator ;
so, it was almost like the voice
of the consumer .

12. Sales projections
• In 1998, Harvest Gold Foods India Private limited
launched Rs. 2.7 million advertising campaign with an
aim to become the toast of the country’s bread basket.
• With the sales restricted to Delhi and its environs,
growth in the nineties had risen by a hearty 65 to 70 per
cent a year, and the sales were projected to touch a
buttery Rs. 500 million in 1997-98.
• To avoid cheaper harvest gold substitutes from cutting
their customers, the company had to ensure that the
consumers began demanding Harvest Gold by name.

13. Steps in advertising
• The Harvest Gold advertisement appeared in a fixed position, on the back page of
Delhi Times, and only on Friday’s — when the readership peaked — for a full 52
weeks .
• Both the agency and the client wanted the bread to come alive in a funny, exciting,
smart, and sexy manner.
• They would have ads such as ―Milk content ki no information, softness ka no
mention, I said ―Chaddo na, bread khao. Why create tension?’’ But when you go to
pick up bread, ik gaal must be saaf and clear That Harvest Gold is what you buy.
Not just any bread, my dear.‖
• It mentioned the product details on each of its bread packets –―Harvest Gold
Industries Private Limited proudly present, HARVEST GOLD, a fine quality white
bread baked in a state-of-the-art plant with quality testing conforming to the
American Institute of Baking standards. Harvest Gold is brought to you in an
international quality pack to ensure freshness and hygiene.‖ for food safety and
standards.)
• Even their customer care number and email ID were mentioned on the packets of
their product to entertain feedback from the customers.

14. Distribution…
• The marketing system was based on strong retail-wholesale distribution
network and being a highly price sensitive low margin food product with
very small shelf life.
• Harvest gold success largely depends on excellent distribution system
enabling fresh delivery of various items. The best thing about harvest gold
is its small size which facilitated smooth distribution of its products.
• In earlier days the owners of harvest gold were recalling the days when
they use to sell on traffic signals, in order to increase sales. Those were
there tough times.
• The latest fast moving professional practices which emphasis on bakeries.
• A long term strategy was created that affected everything in supply chain
from the profitability of individual products , through bread room
operations even to examining running cost of individual delivery vehicles.

15. Continued…
• There are two slots of distributing morning and evening. The bread were
sold in morning slot from 8 to 10 and evening slot was from 4 to 7.
defective breads were exchanged.
• Various supply chain workshops were held to identify problems eg: stock
item profitability, cost of transferring product b/w plants and consolidate
orders, distribution channel such as retail, industrial, food services,
profitability of different customer types.
• Empty shelves means lower sales so they try to keep there shelves always
fully loaded. So supplying enough bread to fill shelves was a critical tactic
in overall strategy.

16. Handling and logistics…
• Harvest gold used trucks and tempos for transportation, and in case of
smaller deliveries to retail shops the producer uses small bicycles and
tempos. Temperature should be maintained in the tempos
• The Bhiwadi plant was the only plant and the product was distributed
from there.
• The products were loaded in trucks and unloaded at various depots in
Delhi.
• From the depots, the products were carried by the outsourced trucks to
the various corners of the city as per the demand of the customers.
• The retailers of the suburbs in Delhi demanded 400 gms of the white
bread the most whereas the retailers in the posh localities like Vasant
Vihar, Vasant Kunj, Greater Kailash, Defence Colony, and demanded
different variants of Harvest Gold bread.
• The mode of revenue collection was cash on delivery from the retailers by
these outsourced truckmen.

17. Challenges in handling crate
• The breads were packed in plastic crates each of which was around 1-2
kgs; each person carried 3-4 such crates on his shoulder.
• While unloading, the person freely removed the load which on impact
with the ground caused serious cracks after several falls.
• One crate full of breads weighed around 6-7 kgs; four crates weighed
around 24-28 kgs and would cost around Rs 200. Breakages were common
at the edges.
• Around 50,000-60,000 crates were circulated everyday in the market in a
cycle. Breads needed to be delivered within 3-4 hours. Therefore, crates
were handled roughly. They were stacked inside a truck and transported to
various markets.
• Normally, no empty space was left in the trucks. Usually one person on the
truck (3.5-4 ft. high) handed over the crates to two persons on the ground
who carried them to the shops on the shoulder.
• These crates were dropped from the shoulders (4-4.5 ft. high) usually on
the concrete floor and hence the impact damaged the crates.

18. Crate design
• The company organized a design
competition among the students
of the Indian Institute of
Technology (Delhi) to develop a
creative technology innovation so
that the crate could be carried at a
lower height thus reducing the
impact level, while not
compromising on the quantities
carried and also increase the trays’
resistance to cracking on falling on
the ground.
• A presentation/video with
reference to the design statement
was shown to the participants who
were told that the original crate
must remain the same

19. Competitors…
• Among the competitors of harvest gold was the company manufacturing
premium bread under the brand name”perfect” which figured in most of
the premium stores and virtually all the 5 star joints in Delhi.
• Another competitor was modern foods which was located in busy
Lawrence road industrial area . It had 40% of market share in india’s bread
market.
• The MFIL merged with HUL in sep 2006 , and 392 employees of MFIL from
initial strength of 2042 were now HUL employees
• HUL turned away from MFIL as it doesnot have its own distribution
network, it lacked quality standards, and grabbled with trade union
troubles and high production costs.

20. Continued…
• The Modern bread brand was available in a wide variety of white
sandwich bread, brown bread, Atta (wheat flour) Shakti Bread and
Modern 7 Must Multigrain Bread in more than 50 towns across the
country, including major metros.
• “Modern Foods is contributing to both the top-line and bottomline of our
foods business,” said Prasad Pradhan, a spokesperson for HUL.
• Insiders say, however, that HUL was struggling with the Modern brand.
From 13 units, including those in key markets of Delhi, Jaipur, Indore,
Ranchi, Kochi, Kanpur, Kolkata and Chandigarh, it now had only six
operational units and brand franchisee arrangements with others across
the country.

22. Business Model
• They couldn’t invest much because of investment
ceiling of Rs 30 million in the reserved sector of
bread manufacturing.
• Hence, considered franchising its brand and
technology across the country as the ultimate future
option for the national presence.

23. Challenges
• There were two major challenges faced by the
company in going national:
a) managing the distribution of fresh bread.
b) fulfilling the need for a good quality product
involving low cost techniques that the
customers could trust.

24. Importance of Brand Image
• Having a quality brand image is not only important for larger businesses, but smaller businesses as
well.
• Establishing a brand and your business’ image is one of the best ways to get consumers to connect
and engage with your business.
• A brand is more than the company logo; it is everything your business is about, from the mission
statement to the culture.
• Having a positive brand image helps your customers understand what your business is all about and
know what they can expect from you, your product or your service.
• Once your business’ brand is established and consistently implemented by all involved with your
company, recognition for your brand (and business) will grow.
• A well-developed brand image will help your business be perceived as reliable, experienced and
consumer-focused. This consistency will encourage consumers to make a connection with your
business and engage with you, and brand loyalty will begin to flourish.
• Brand loyalty is often times the reason consumers choose one product or service over another, and
the reason your business will be their first choice.
• The lifetime value of loyal consumers is far higher than non-loyal. Creating brand-loyal customers
should be the goal for any small business.