After undergoing a major re-branding exercise, since it stopped using the Monginis brand owned by the Mumbai-based Khorakiwala family, Switz Foods Pvt. Ltd. (SFPL) is now exploring opportunities for scaling up operations while charting new areas. The brand-makeover is being seen as one of the most dramatic such exercises in recent times, and may become the case study for a major management institute.
The city-based company with a group turnover of around Rs.400 crore (unaudited) in 2014-15 manufactures cakes and cookies.
While it retailed the cakes under the Monginis brand, it also sold packaged cupcakes and cookies. It has a daily capacity of 150 tonnes for the group and 10 tonnes for SFPL. It employs 6,000 people of which 3,000 are in direct employment.
However, the 26-year-old arrangement with a certain section of the Khorakiwala family to manufacture and market cakes under the Mongini brand in West Bengal, Odisha, Bihar and North East came to an end from May 1, 2015 through an out-of-court settlement.
The discord was mainly over the business plan being followed by Switz Foods Pvt Ltd., which had begun pushing its own brand Winky’s (packaged cakes) and started contract manufacturing for companies such as Britannia and ITC.
“While the equity holding arrangement with an another member of the Khorakiwala family continues, the brand-sharing pact pertaining to Monginis came to an end from May 1, 2015,” SFPL Director Arnab Basu said in an exclusive interview sitting atop his oldest unit at the Kasba Industrial Estate. Closeby is a franchisee-owned retail outlet whose daily sales is Rs.32,000.
Just as SFPL stopped using the Monginis brand, the Khorakiwalas will also not market their products for three years from May 2015 in West Bengal and the North East as part of the resolution arrived at through mediation.
Following this settlement, Monginis, which had become a household-name in cakes and pastries in the state and Odisha, vanished from shop shelves of the 210 stores. The franchises emerged in a new avatar Mio Amore with a new brand logo and new colour scheme. The stores too donned a new look.
“The exercise cost us under Rs.1 crore — but it was dramatic,” admitted Mr. Basu. To the customers, however, it made little difference as they kept flocking in. It was learnt that this entire exercise may become the topic of a case study by a major management institute.”
If he is a trifle sad that his association with some members of the Khorakiwala family, who had held his hands in his entrepreneurship foray, has ended, Mr. Arnab Basu does not show it. He remains stoic even as he charts a new growth plans like refrigerating the delivery vans and entering new areas such as non-aerated fruit based drinks. “We are also developing a heritage food brand Jalajog which we acquired earlier,” he said.
