Food is an emotional sale!!!

January, 2023

Dear Friends

The year 2023 has begun amidst the gloom of massive layoffs, downsizing, redundancies, by whatever name called. There is anger, anguish, dismay and despondency all around since the action is largely by the Corporate Biggies who had hired in hordes. However it is the small and medium enterprises that have braved the tough tides and bounced back time and again. I am sharing select thoughts gleaned from a talk I attended a couple of months ago by Indraneel Chitale, a 4th generation entrepreneur of a legacy Indian food business, Chitale Bandhu, that started in the pre-independence era.

“Leading family businesses in the age of disruption”

Legacy is a responsibility as well as a platform. Statistics speak ‐ 1st generation business 68% fails, 2nd generation 78 to 80% fails, 4th generation 98% fails.

Late Sri Bhaskar Ganesh Chithale started milk distribution in 1939 in Bhilwadi in Sangli district. Lost 300 cattle in 1 week. No electricity, no telephone ‐ how to preserve milk at that time was the question. Moved towards B2B milk products derivative distribution. Survival was the key !

Inspired by the independence movement and patriotism, sons joined the business to form Chithale Bandhu. Grown to 22 internal shareholders from the family across 4 generations.

1970, milk packaging technology imported. 1st company to start pouch technology. 1980s ‐ started franchising, fruit processing ‐ ingredient supplier to pickles, sauces. Introduced machinery for different products to ensure standardisation at ingredient level. Foraying into new territories !

Backward integration with farmers through genetic semen-bull strategy – building an ecosystem!

Halwai or mithaiwala trap ‐ where do we fit in dilemma ? Data and science came in handy. Led to few machines and many products ‐ automation ensured that products taste the same everyday. Order & tracking system ‐ prioritising for what & how much to produce brought in efficiency.

Increased Tech use in Chitale – Cows to cloud, RFID tech intelligence to farmers that ensures transparency from ingredient to end product. Use of IOT ‐ Farm to fork, 500 data points, 3 locations, 2 states. Build patterns out of purchasing power data & AI prediction to plan production, distribution and sales.

Brand should find place in customer’s pocket. Omnichannel presence across countries helped in pandemic.

Used Theory of Constraints in technology & distribution. Grew from 14k stores in 2014 to 2.5L stores currently. Giga factory ‐ ability to lift and shift.

Food is an emotional sale. Honour tradition. Cherish innovation. Add joy to every occasion of our consumer. Chithale tagline – maintain the sweetness of every relation. Watch this YouTube video for some heart rending communication.

A few catchy, wise words from the young head of Indraneel….

Vision without action is a day dream. Action without vision is a nightmare.

If you want to grow tall, dig deep.

Be an inspiration, maintain integrity (as 4th generation I should either grow or sell).

Ask for external help even in a family business.

Be compliant globally. Understand economics, policies, not politics alone.

Preserve values of delegation & trust. You cannot be everywhere. Have continuity through teams.

Business is a test match.

Leadership is a lifestyle-walk the talk. Own the talk. Live by it.

Honour diversity, agree to disagree.

Brand remains, family changes.

The most amusing one I have heard so far – “How should an entrepreneur be ‐ not a dying dinosaur. He should be like a cockroach ‐ resilient, relevant & persistent 😊”

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