FMCG Giants Want Some Chips of Balaji Wafers

Hello readers! 

If you’ve ever munched on a packet of wafers in India, chances are you’ve seen the name Balaji Wafers. But what makes this company so interesting isn’t just its chips — it’s the journey of how a small local business from Gujarat ended up competing with some of the biggest global food giants.

The story begins way back in 1974, not in a big factory or boardroom, but in a small cinema canteen in Rajkot. Chandubhai Virani, who was running the counter, noticed something unusual: people were buying fried chips much faster than the sandwiches. On top of that, customers weren’t too happy with the wafers being served either. So, he tried making his own. The homemade chips became a hit, queues started forming, and that was the spark for what later became Balaji Wafers.

By 1995, the small canteen hustle had turned into a fully automated factory. Fast forward to today, Balaji clocks around ₹5,550 crore in sales (FY24) and earns about ₹578 crore in profits. To give some context, that’s nearly at the level of Jubilant FoodWorks, the company that runs Domino’s in India and is worth over ₹43,000 crore. No surprise then that big names like Temasek, ITC, General Mills, and PepsiCo are all eyeing a stake in Balaji, valuing it at a jaw-dropping ₹40,000 crore.

So how did a regional Gujarati player manage to reach the same table as these titans? The answer lies in cracking every single step of the wafer journey — from sourcing potatoes to making sure packets move off kirana shelves faster than competitors.

The Potato Puzzle

Chips might look simple, but the process behind them is anything but. The first hurdle is potatoes. Not all potatoes make good wafers — you need ones that have low moisture and high solids, so they fry well and stay crisp. PepsiCo even developed its own special FC5 variety after years of R&D, tying farmers down with strict contracts.

Balaji, on the other hand, didn’t have that kind of research muscle. Instead, it built trust with local farmers in Gujarat’s potato belt. From a few hundred growers a decade ago, it now works with around 2,000 suppliers, most of whom are farmers. It even set up a 10,000-tonne cold storage facility so that it could buy in bulk during harvest and stretch supplies across the year. This meant consistent quality, less wastage, and protection against the usual swings in potato prices. In short, farming became less of a gamble and more of a steady supply line.

Playing the Pricing Game

Raw potatoes are just the start. Oil, for example, makes up 25–30% of costs. When edible oil prices shot up in 2019, most snack makers were in trouble. But Balaji didn’t touch its sacred ₹5 and ₹10 price points. Instead, it used the smart trick of grammage variation — basically adjusting the weight of chips in each pack while keeping prices steady.

This way, the consumer always felt they were getting more for their money. For instance, a ₹10 pack of Balaji’s salted chips sometimes carried 35 grams, while Lay’s gave 23 grams. Balaji even ran ads on this “more chips, less air” promise. Consumers trusted that a Balaji pack always had weight in the palm, and that became the brand’s moat. Instead of spending huge amounts on advertising like rivals, Balaji won over people with simple value.

The Distribution Muscle

But good chips alone don’t guarantee success — they need to reach every corner store. Balaji approached this the D-Mart way: saturate one area completely before expanding. Gujarat first, then Maharashtra, Rajasthan, and Madhya Pradesh. Sticking to nearby states meant shorter truck routes, flavours tuned to local tastes, and word-of-mouth spreading faster.

Behind this strategy is a dense network: more than 1,200 distributors and 1,300 dealers, covering 4.5 lakh kiranas. Balaji even dabbled in some guerrilla-style marketing — plastering kirana shop walls with its logos, or even sending people to ask for Balaji by name. While rivals like PepsiCo and ITC spend 8–12% of sales on ads, Balaji kept its spends to just 2–4%, letting distribution and visibility do the work.

This paid off. Today, Balaji controls about 65% of the market share in Gujarat, Maharashtra, and Rajasthan. At the national level, it has moved past brands like Bingo and Uncle Chipps, becoming the third-largest salty snack brand after PepsiCo and Haldiram’s, with about 12% share of India’s ₹43,800-crore snack market.

Market Leadership

This strategy worked wonders. In Gujarat, Maharashtra, and Rajasthan, Balaji today commands nearly 65% market share in chips, namkeen, and bhujia. On the national level, it has overtaken brands like Bingo and Uncle Chipps to become the third-largest salty snack player in India, only behind PepsiCo and Haldiram’s.

Balaji is now a serious contender in India’s massive ₹43,800 crore snack market, holding about 12% share.

Courtroom Battles and Challenges

It wasn’t always smooth. In 2013, PepsiCo dragged Balaji to court, claiming its packs looked too much like Lay’s. In 2018, the Bombay High Court stopped Balaji from selling “Rumbles,” saying the ridged chips resembled Lay’s Maxx design.

For many regional brands, such challenges would be deadly. Packaging in FMCG is critical because shoppers decide within seconds. But Balaji trusted its brand name. It reworked packaging, doubled down on distribution, and kept its value promise alive. Instead of losing ground, Balaji gained more — even as Lay’s lost market share in Gujarat and Maharashtra.

Scaling Without Losing Local Touch

Balaji’s plants now process about 1 lakh kg of potato wafers and 5 lakh kg of namkeen every day. Along the way, it stayed true to its roots. Local flavours remained central, because what works in Surat might not work in Kota. Its entry packs stayed at ₹5 and ₹10, but larger family packs gave room for premium customers too.

Today, Balaji sells over 65 products across wafers, namkeen, noodles, and extruded snacks.

The Road Ahead

The big question is: can Balaji’s authenticity survive as it scales nationally? To grow further, it may have to standardise products, spend more on advertising, and launch premium items. These moves could risk alienating its loyal ₹5 and ₹10 customers.

The competition is intense too — PepsiCo with global R&D, ITC with deep pockets, Haldiram’s with national dominance, and countless local players. On top of that, investors may eventually push Balaji toward an IPO.

But Balaji has shown remarkable resilience. It has already entered the noodles segment with Gippi Masala Noodles and is giving big names a run for their money. Its credibility at kirana counters, the sacred price points, and its ability to tweak masalas for every region are advantages that money can’t easily buy.

Conclusion

From a small canteen in Rajkot to a multi-thousand-crore giant, Balaji Wafers has become a rare success story in India’s FMCG space. It has cracked the tricky game of chips by focusing on farmers, keeping prices consumer-friendly, and building one of the strongest distribution networks in the country.

The Indian snack market is expected to double to over ₹95,000 crores by 2032. If Balaji manages to expand while holding on to its authenticity, it won’t just remain Gujarat’s pride — it could truly become India’s next homegrown challenger to global snack giants.

📅  Coming up next week!

September 22 (Monday)

IPO Updates:

• Atlanta Electricals IPO opens.
• Ganesh Consumer Products IPO opens.

September 23 (Tuesday)

India Manufacturing PMI:

• HSBC India Manufacturing PMI rose slightly to 59.3 in August from 59.1 in July.
• However, it was revised down from the earlier flash estimate of 59.8.
• The flash reading for September is expected soon.

Euro Area Manufacturing PMI:

• The Eurozone Manufacturing PMI improved to 50.7 in August from 49.8 in July.
• This marks the first monthly improvement in factory activity since June 2022.
• The flash data for September will be released shortly.

UK Manufacturing PMI:

• The UK Manufacturing PMI fell to 47 in August from 48 in July.
• This is below the market expectation of 48.3, showing continued weakness.
• The flash reading for September is awaited.

US Manufacturing PMI:

• The US Manufacturing PMI stood at 53.0 in August, slightly lower than the earlier estimate of 53.3.
• Still, this is a big improvement from 49.8 in July, showing stronger factory activity.
• The September flash reading will be announced soon.

September 24 (Wednesday)

    (No major scheduled updates mentioned.)

September 25 (Thursday)

IPO Update:

• Jinkushal Industries IPO opens.

US GDP Growth Rate (Final Data):

• In Q2 2025, the US economy grew at 3.3% (annualized).
• This is a strong recovery compared to the 0.5% contraction in Q1 2025.
• The final GDP figures for Q2 will be published.

US Initial Jobless Claims:

• Jobless claims jumped by 27,000 to 263,000 in the first week of September.
• This was much higher than the market expectation of 235,000.
• Data for the week ending September 13 will be released.

September 26 (Friday)

India’s Foreign Exchange Reserves:

• Reserves rose to $698.27 billion (as of September 5), up from $694.23 billion the previous week.
• The latest figures for the week ending September 12 will be announced.

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