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W20589

BIKANERVALA FOODS PRIVATE LIMITED: PROFESSIONALIZATION

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OF A FAMILY BUSINESS

Pranav Mittal and Madhushree Agarwal wrote this case solely to provide material for class discussion. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other
identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the

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University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Our goal is to publish
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Copyright © 2020, Management Development Institute Gurgaon and Ivey Business School Foundation Version: 2020-07-15

On a winter morning in 2019, Lala Kedarnath Agarwal, the 83-year-old co-founder and head of Bikanervala
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Foods Private Limited (Bikanervala), sat in his favorite arm chair contemplating the future of the business
empire he had started with his brothers almost 65 years ago. Bikanervala was a fourth-generation family
business house located in India, and it had charted a long journey from being a local fast-food stall to one
of India’s largest traditional food chains. It had two major lines of business: a chain of restaurants-cum-
stores selling traditional Indian fast food and sweets called mithai1 (see Exhibit 1) and a packaged Indian
snacks business under the Bikano brand. The rapid, but somewhat disorganized, growth of the family
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business was reaching an inflection point, and there were impending decisions that had to be made.

Bikanervala had always prioritized family over business and had survived four generations without a major
family conflict. However, in 2019, the business was facing many crucial decisions for the first time in its history.
It was facing competition not just from domestic companies but also from some of the world’s largest snack
food multinational corporations (MNCs), which had years of expertise in supply chain management and
distribution. Coupled with this was the family’s own ambition to expand geographically in both the domestic
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and international markets, which posed new challenges for the professionalization of the family business.

The family had stood united all these years, but how would it be able to keep the growing clan of family
members from the third and fourth generations together while protecting the family values that had been
the driving force of the company? What would the business need to do to compete with bigger players in
the industry? Could they grow and expand the business at a global level without incorporating more
professional practices and managers? Even if they did, could a new breed of professionals ever replace the
family’s intangible knowledge about the product, the customer and the ties of trust and the informal
networks that formed the basis for the business? Most importantly, how would the family decide who should
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succeed Kedarnath, the only surviving first-generation entrepreneur, as the head of the company, and how
could leadership succession be achieved smoothly?

Kedarnath, fondly called Kakaji (literally translated to father’s brother) by Bikanervala employees, shut his
eyes and leaned back in his chair, letting his thoughts take him through the 65-year history of the business.

1
Mithai refers to traditional Indian desserts made using thickened milk, dry fruit, and sugar (refer to Exhibit 1).

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BIKANERVALA: ORIGIN AND BACKGROUND

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“From selling rasgulle2 in a bucket to now a turnover of ₹20 billion”3 was how one of India’s largest-selling
national dailies described the Bikanervala Group4 in 20195. The origins of Bikanervala lay in a small,
century-old shop selling traditional snacks called namkeen6 in Bikaner, Rajasthan. In 1955, Lal Chand, the
owner, sent two of his sons, Kedarnath and Jugal Kishore Aggarwal, to Delhi to explore the potential for

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their family business of selling namkeen and mithai. Convinced of the possibilities, they set up a small stall
in the heart of the old city. They would load freshly fried snacks onto their bicycles in the morning and go
from one residential community to the next to sell them at people’s doorsteps. A few years later, as the
popularity of the snacks caught on, they added more varieties and set up their first shop, called Bikaner
Bhujia Bhandar, in Old Delhi. They called in local confectioners7 from Bikaner, and the shop quickly
became popular, evolving into a store-cum-restaurant serving and selling Indian food items such as
namkeen, mithai, and Indian street foods.

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Shyam Sunder Aggarwal, son of Jugal Kishore, one of the founding brothers, was drafted into the family
business at the early age of 16 by his father. Starting in the kitchen of the newly established outlet, he
proved to be a quick learner with sharp business acumen. To date, Shyam Sunder attributed his success at
the helm of the family business to the years spent learning the ropes starting from the bottom of the ladder.
Like his father before him, Shyam Sunder had a strong orientation to excellence, and his years of
experimenting in the kitchen gave him an excellent understanding of taste and quality—Bikanervala’s core
values. “Mithai and bhujia—they run in my veins,”8 he joked.
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Sanjay Aggarwal, one of the third-generation brothers, reminisced about his childhood experience at the
first shop and the family’s inability to hire much labor at the time: “My cousins and I were given targets
for packing mithai boxes for Diwali,”9 he chuckled, “and we would get one piece of mithai as incentive for
a fixed number of boxes.”
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As the popularity of the first outlet skyrocketed, more family members began arriving in Delhi from
Bikaner. They started new branches under different corporate entities using the Bikanervala brand name,
and they remained united in their idea of growing the family brand and serving more customers every day.
Soon, they realized they had spread themselves too thin, and the business needed a flagship company to bid
for large government contracts for outlets in airports and railway stations. In 1988, led by Shyam Sunder,
the family established Bikanervala’s flagship company, Bikanervala Foods Private Limited, which would
later become responsible for introducing the Bikano packaged-snacks business.
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By the time the third generation entered the business, the Aggarwal clan lived together with almost one
hundred family members in the same house, as a tightly knit Indian joint family. “Joint families teach us to
live with and adjust to many people,” said Sanjay. The family setup ensured that the values of respect for
and obedience to elders—where age was an indicator of wisdom and experience—were inculcated in

2
Rasgulle is a type of mithai and is a popular Indian candy also sold at Bikanervala.
3
₹ = INR = Indian rupee; ₹1 = US$0.014 on December 31, 2019; All currency amounts are in INR unless otherwise specified.
4
Bikanervala Group has wide operations, ranging from hospitality to mining; the case only focuses on the restaurant and
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snacks business.
5
Agrawal Manish, “Bikanervala: Once Sold Rasgulla In Bucket Now Owner Of 2000 Crore Turnover Business,” Navbharat
Times, September 1, 2019, accessed January 6, 2020, https://navbharattimes.indiatimes.com/business/business-
news/Bikanervala-once-sold-rasgulla-in-bucket-now-owner-of-2000-crore-turnover-business/articleshow/70931328.cms.
6
Namkeen refers to traditional Indian snacks known for their salty taste (refer to Exhibit 1).
7
Locally, these confectioners are called halwais, referring to an Indian community whose traditional primary occupation relates
to confectionery and sweet making.
8
Bhujia is a popular traditional Indian snack prepared using gram flour and spices.
9
Diwali is a popular Indian festival typically characterized by exchanging gifts (refer to Exhibit 1).

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children from an early age, helping them navigate through intersecting business and personal relationships

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in the future. As time spent together on a daily basis reduced, the Bikanervala family maintained its
traditions of informal family gatherings on all important Hindu festivals, including Holi, Diwali, and
Navratri, that were still attended by most family members. This practice kept family relationships close and
served as an informal forum in which to discuss any personal or family problems.

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THE SNACKS INDUSTRY IN INDIA

The Bikanervala business operated in two industry categories: packaged snacks under the Bikano name, and
traditional Indian sweets (i.e., mithai) sold mainly through Bikanervala’s popular limited-service restaurants.

The mithai industry had long remained craft-based and was dominated by family-run mom-and-pop stores,
usually with each large neighborhood having its local favorite store. Customers’ choices were influenced

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primarily by taste and quality of service, which eventually built customer loyalty that would often continue
for years in a household. In contrast, the packaged-snacks business demanded different expertise. The
industry was dominated by MNCs such as PepsiCo India Holdings Private Limited (PepsiCo) and ITC
Limited (ITC), which leveraged their expertise in distribution, logistics, and branding.10

EARLY BUSINESS CHALLENGES

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As the number of Bikanervala outlets increased, the family started facing some concerns about product
quality, service quality, and standardization of taste across outlets. However, as different outlets were run
by different members of the joint family, it was difficult to get all outlets to operate alike. Every branch of
the family had its own traditional recipes and spice mixes. Convincing this large family base about the
benefits of standardization and the necessity of capital expenditure for technology was not an easy task, as
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each outlet owner had been operating like an individual entrepreneur and saw such measures as potential
constraints to autonomy. It was the early practice of holding regular family council meetings that helped
the family put their concerns on the table and agree on a strategy, so that the Bikanervala brand name would
inspire the same feeling in everyone, irrespective of the branch location. The real challenge was to introduce
the concept of standardization into what was essentially a craft-based industry.

The centralized production of mithai was one of the suggestions that came up in the family meeting on the
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standardization of taste and quality across all outlets. Unlike a fast food burger—for which the patty could be
fried, frozen, and then refried later—mithai, as well as its raw materials (especially milk), were perishable.
After a number of family meetings and discussions, the family agreed on a system of semi-prepared mixes.
These semi-prepared mixes were created in central manufacturing centers and transported to outlets where
they were fed into semi-automatic machines. The confectioner at the outlet would choose the quantity and the
type of mithai required; the machinery would then combine the semi-prepared mixes for each mithai in a fixed
proportion that was uniform across all outlets. The mithai mix was then cooked or baked in uniform casts at
the outlet to produce mithai that had the same shape and taste across all outlets in the country.
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Bikanervala’s next challenge was standardizing the outlets’ appearance and service levels. The family
realized that service consistency affected customer experience of the brand and eventually won customer
loyalty. They decided on a third-party audit system, where an independent team, kept outside the influence
of any family member, would conduct surprise visits to every outlet, rating them on food quality, hygiene,

10
Interview with Sanjay Aggarwal, conducted by the authors on January 20, 2020.

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and food presentation. These standardization reforms were followed by setting up electronic billing systems

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in each outlet linked to a central server, aiding in the quick replenishment of materials at outlets.

It was in 1996, when fast-food chains such as Pizza Hut entered the Indian market,11 that Shyam Sunder’s
dream of taking the Bikanervala brand global began to take form. Amazed at the popularity of a food chain
serving Italian cuisine in India, he began to dream of taking Bikanervala to the global stage. Knowing that

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selling products with such a short shelf-life on a global scale required advanced skills and technology,
Bikanervala looked outside the company to learn the best practices in the industry. PepsiCo had recently
entered India12 and was looking for a manufacturing partner.13 Bikanervala seized the opportunity and
formed an exclusive agreement to manufacture namkeen for Lehar, PepsiCo’s brand, in 1995.14 It was
during this time that Bikanervala realized the importance of packaging, a lesson that later proved extremely
useful in the growth of Bikano.

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BIKANERVALA IN 2019

Industry and Competition

Domestic competition

For many decades, Bikanervala’s largest competitor was Haldiram’s, another Marwari15 family business
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chain (see Exhibit 2) that had started around the same time. The two businesses had similar origins—both
started by selling their region’s specialty namkeen and gradually expanded to restaurant-cum-stores that
had similar offerings, including vegetarian fast food, snacks, and mithai. While the jury was still out on
who led the mithai segment, Haldiram’s was way ahead in the packaged food segment, with the highest
brand share in the market, even displacing PepsiCo’s popular brands (see Exhibit 3).16

Although Haldiram’s was the market leader, it had not been able to grow without family disputes.17 Years
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ago, the founder had sensed discord between his sons and split the business into three areas: Eastern, Northern,
and Central India.18 This separation led to each branch of the family managing and growing its business like
an independent entity, without any interference from the others.19 In the competitive environment of 2019,
Haldiram’s found it easier to grow and expand without facing the problem of keeping all family members
from four generations in agreement. Fewer stakeholders in their respective family businesses had made it
possible to make decisions much faster when it came to partnerships, innovations, and product launches.
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11
Sabharwal Punita, “Savoring the Sweet Taste of Success,” Entrepreneur, October 17, 2016, accessed January 6, 2020,
www.entrepreneur.com/article/283853.
12
Surajeet Das Gupta, “How India Became Pepsi's Right Choice,” The Business Standard, March 28, 2014, accessed May
14, 2020, www.business-standard.com/article/companies/how-india-became-pepsi-s-right-choice-114032701308_1.html.
13
ICRA Limited, Bikanervala Foods Pvt Ltd, February 22, 2019, accessed May 14, 2020,
www.icra.in/Rationale/ShowRationaleReport/?Id=77828; ICRA Limited, Bikaji Foods International Limited, April 5, 2019,
accessed May 14, 2020, www.icra.in/Rationale/ShowRationaleReport/?Id=79371; Surabhi Kedia, “From Streets To A 1000-
Crore Company: The Inspiring Success Story Of Bikanervala,” The Marketing Mind, November 20, 2019, accessed July 15,
2020, www.marketingmind.in/from-streets-to-a-1000-crore-company-the-inspiring-success-story-of-bikanervala/.
14
Punita, op. cit.
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15
Marwari refers to India’s famous trader community belonging to the region of Marwar (refer to Exhibit 2).
16
“Savoury Snacks in India,” Euromonitor International, August 2019, accessed May 14, 2020.
17
R. Sivaraman “Kolkata’s Haldiram Bhujiawala Stripped of its Trademark,” The Hindu, April 27, 2013, accessed January 13,
2020, www.thehindu.com/news/national/kolkatas-haldiram-bhujiawala-stripped-of-its-trademark/article4658595.ece.
18
Sagar Malviya, “Haldiram Sales Cross $1 Billion,” The Economic Times, February 6, 2020, accessed May 14, 2020,
https://economictimes.indiatimes.com/industry/cons-products/food/haldiram-sales-cross-1-
billion/articleshow/73978454.cms?from=mdr.
19
Pavitra Kumar, “Greener Pastures: The Orange City,” Bhujia Barons: The Untold Story of How Haldiram Built a 5000-Crore
Empire, Digital Edition (India: Penguin Random House India, 2016), 1011–1039.

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However, the family split had given birth to a public legal battle over the Haldiram’s brand,20 which was a red

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flag for otherwise enthusiastic investors looking to invest in Haldiram’s. The market speculated that this had
led American breakfast cereal maker the Kellogg Company to back down from a deal formed earlier in 2019
after months of discussions regarding a majority investment in Haldiram’s.21

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International competition

With the entry of the world’s largest MNCs into the country, the competition for Bikanervala was at its
peak. For example, Bikanervala’s mithai, which had always been neck and neck with Haldiram’s, now
competed with Mondelez International Inc.’s (Mondelez’s) “Cadbury Celebrations” range of chocolates.
Mondelez was keen to tap into the pattern of the consumption of sweets on auspicious occasions in India.
It launched the “Celebrations” range of chocolates as a substitute for traditional sweets for such occasions

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and even enlisted famous Bollywood actor Amitabh Bachchan as its brand ambassador in the 2000s.22 Such
chocolate packs became increasingly popular. They were economical, more easily available, and less likely
to get spoilt than were traditional mithai.

Similarly, the snack brand Bikano, under which namkeen was sold, now competed not only with Haldiram’s
but also with Kurkure of PepsiCo;23 in addition, its restaurant chains competed for a share of the customer’s
pocket with McDonald’s Company and Domino’s Pizza, Inc., which were leading the market.24
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The Business

By 2019, Bikanervala was a ₹20 billion25 business house. As one of the two largest players in the mithai
sector, its namkeen business, under the Bikano brand, had gradually been gaining market share (see Exhibit
3). Bikanervala’s key strength was the customer’s trust in its taste and quality, a result of a no-compromise
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approach to raw materials, reinforced by its jealously guarded reputation as a family business. The family
was particularly proud of Bikanervala’s secret traditional recipes, which had been closely guarded for
generations, and the company was now using new styles of automation and technological advancements to
maintain the same taste across its retail outlets around the world.

By December 2019, Bikanervala had 85 domestic outlets, operating mostly in Northern India, with 26
international outlets operating in United Arab Emirates, New Zealand, Nepal, Singapore, and the United
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States (US) catering to the expatriate communities there as well as a budding local fan base. Bikanervala
had opened its first franchise in Nepal approximately 20 years prior, and later expanded to Dubai, the US,
New Zealand, and now Singapore. The journey had not been smooth, as nuances in international laws in
each country had exposed Bikanervala to multiple unforeseen risks. After initial failures with the franchise
system, it had decided to stick with a joint-venture structure for all international expansions. However, risks
such as fluctuations in exchange rates as well as the unpredictability of trade regulations remained, and
international operations continued to be a source of concern for Bikanervala management.
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20
Sivaraman, op. cit.
21
Debjyoti Roy, “Why Kellogg’s Called Off Planned Deal with Haldiram’s,” The VC Circle, July 29, 2019, accessed January
13, 2020, www.vccircle.com/why-kellogg-s-called-off-planned-deal-with-haldiram-s/.
22
Saumya Tewari, “70 Years of Cadbury in India: Dairy Milk Ads, Then and Now,” Live Mint, July 24, 2018, accessed May 14, 2020,
www.livemint.com/Companies/eJNeDPiZg6v9FGfTrq57ZK/New-Cadbury-Dairy-Milk-ad-celebrates-its-70-years-in-India.html.
23
“Savoury Snacks in India,” Euromonitor International, August 2019, accessed May 14, 2020.
24
“Limited Service Restaurants in India,” Euromonitor International, April 2020, accessed July 14, 2020.
25
Manish, op. cit.

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The Organization

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The ownership and governance structures had also evolved quickly with the changing industry. The
company was supervised by a board of directors, comprising all the owners from the first, second, and third
generations of the family. The operations were mostly run by about 15 members from the third generation,
each of whom had a dual responsibility: Each headed a functional department for the company and was

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accountable for the performance of a number of outlets. Geographical clusters of outlets were usually
owned and managed by separate branches of the family (see Exhibit 4). Each functional department was
supported by a deputy manager who had a team of management professionals for support. Bikanervala
benefitted from the range of professional expertise available. However, decisions about the assignment of
outlets and functions to family members were made only by the family council. If an outlet was not
performing, it was common to call in a family member running a different outlet for assistance before the
council reallocated its management to a different person for a longer period.

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Family Values

Kedarnath’s clan now had 130 members, with members from the fourth generation beginning to join the
family business. The business saw active involvement across generations, including the involvement of
Kedarnath, the only surviving member of the first generation, 14 family members from the second
generation, 17 from the third, and 2 from the fourth who had just started.
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Sanjay attributed the economic success of the 65-year-old fourth-generation family business to the values
of a Marwari joint family. Marwaris were known for their conservative approach to debt, aversion to giving
up the majority stake in the company, focus on cash flow, and avoidance of high risk. These values were
also reflected strongly in Bikanervala’s financial statements (Exhibit 5). One of the most defining values
continued to be frugality. The headquarters of Bikanervala still lay in the noisy, crowded area of the old
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city of Delhi, right where it had been established. The offices and meeting rooms showed no signs of
ostentation but were neat and functional. However, not all traditional Marwari values were equally
favorable. Traditionally, women were not involved directly in the business, as the focus remained on their
role of running the household and keeping the joint family united26 (see Exhibit 2). Historically, this had
resulted in all senior positions in the business being occupied by the men of the family. However, among
the many changes that new generations had brought in was an expansion of the role of women in the
company. As outlets under each brother’s management increased, it was common for their spouses to help
run operations and take meetings in their absence.
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The family had always believed in the inseparability of the business from the family and had always kept
their focus on the long-term legacy of the family. In any conflict between family and business interests,
Bikanervala had always chosen family; Sanjay remarked candidly, “In our decisions, we give a weightage
of 100 points to family and 99 to business.”
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26
Pavitra Kumar, “Greener Pastures: The Might of the Marwars,” Bhujia Barons: The Untold Story of How Haldiram Built a
5000-Crore Empire, Digital Edition (India: Penguin Random House India, 2016), 695–711.

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CHALLENGES OF GROWTH

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Professionalization of Skills and Competencies

Entry-level staff

Bikanervala had always placed a high importance on the trustworthiness of its employees and, thus, relied

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on employing staff through referrals or distant relatives; however, the high-paced growth no longer
afforded that luxury.

As Bikanervala had begun looking outwards for its requirements for factory workers and kitchen staff, it
sensed a deficit in the available skilled labor in the industry. The Bikano Trust, the corporate social
responsibility (CSR) arm of Bikanervala, was entrusted with setting up a training institute in the food
industry to conduct vocational training programs for rural youth. An example of such a program was a

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contract with the Government of Delhi to provide training in the preparation of mithai and namkeen. This
let Bikanervala give back to the society in terms of creating employability while also helping the company
in its recruitment of skilled labor with a set of standardized skills.

Bikanervala was proud of its low attrition rates as compared to those of the industry. Employees who
worked for long periods in the company were rewarded for their performance and loyalty with more
responsibility. Traditionally, proximity to the owners led employees to form strong bonds with the family
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business. Sanjay remarked, “Some employees have been in the organization for even longer than I have,
and their loyalty to the welfare of the family business sometimes takes even us by surprise.”

With the entry of a professional workforce, would these informal ties with employees become weaker?
How would this impact Bikanervala’s competitiveness?
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Management positions

As Bikanervala’s growth demanded more middle-level managers, more professionals were hired to fill
these positions. Now, there was a new layer between the junior employees and the owners, making it more
difficult for older employees to accept “outsiders” as their leaders. This put pressure on the professionals
to understand and fit into the company culture.
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As the family grew, there was an expanding pool of talent available within the family, but it was ensured
that family members did not enter the business with a sense of privilege. From the beginning, the family
had held a strong belief that everyone should earn rather than inherit their positions in the business.
Although there was an attempt to assign family members to their area of interest, they were encouraged to
start at the bottom and work their way up. For instance, those interested in marketing were asked to go
through a few months of door-to-door selling to understand customer preferences firsthand. When Shyam
Sunder sent his son Manish Aggarwal abroad for higher studies in food science and hospitality
management, Manish worked as a dishwasher in a restaurant to earn his living. When he joined the business
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in 2000, he worked his way up from the factory and the production department before he joined his father
at the corporate headquarters. Sanjay himself had worked for two and a half years in production before he
was assigned a branch outlet to manage. All promotions were on the basis of performance reviews and were
decided by consensus at family meetings. “Family members are also promoted on the basis of merit,”
explained Sanjay, “it’s just that they are promoted on a faster track compared to the professionals.” There
was also an increased focus on retraining family members across age groups through participation in

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conferences, training programs, and leadership sessions, to keep them up to date with contemporary

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production and management trends.

In 2012, Bikanervala hired a chief executive officer (CEO), Suresh Goel, who brought years of experience
in law and finance to the company. He was entrusted with handling expansions and partnerships. The
greatest need for professional skills remained in top management positions and policy making. While

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professionals were encouraged to bring ideas for new methods of working to the decision makers, all major
business decisions were still made by the family council.

Was Bikanervala relying too much on family for strategic business decisions? Was it in the interest of the
business? Was it scalable?

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Tacit knowledge

A lot of knowledge about the mithai/namkeen business could be gained through active field experience, as
it required an understanding of the Indian customer’s palate. This advantage had kept MNC competitors at
bay. Bikanervala continued to leverage the experiential wisdom of its elders, who had seen numerous
business cycles and had a deep understanding of consumer behavior. During Indian festivals, which were
especially crucial times for Bikanervala, sales forecasting at outlets was not left to analytical software alone
but also often banked upon the intuitive insights of family members who had been running the outlets for
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decades and who could judge the pulse and mood of the market, sometimes many months in advance.

How could Bikanervala retain the advantage of this valuable tacit knowledge as growth and
professionalization increased?
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Decision Making

There had always been a conscious effort to promote consensus-based decision making within the family
at all levels in Bikanervala. In the beginning, there had been little need for meetings because the joint family
lived together. Over time, the size and geographical distribution increased, and multiple platforms were
created for both formal and informal purposes.
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Weekly operational meetings

Every Tuesday, a core committee of 10–12 directors and 4–5 functional heads met to discuss business
decisions ranging from new product ideas and promotional schemes to market insights. By tacit agreement,
these meetings were attended mostly by younger directors to promote aggressive decision making based on
a better understanding of market realities. No personal or family matters were discussed at these meetings.
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Weekly family council meetings

A family-only meeting was held every Wednesday, where matters such as the performance of the outlets
under each family member and family expenses were discussed. At Bikanervala, family members did not
draw salaries but rather presented their expenses for reimbursement at the family council meetings. The
family typically raised no objection to expenses such as family vacations or celebrations but had little

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tolerance for what the group perceived as needlessly wasteful expenses. All strategic decisions regarding

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business growth and expansion were made at the family council meetings.

Young director’s meetings

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All young directors met socially once a month to relax and have fun together. There was no talk of business
at these meetings. “It allows us to strengthen our social bonds,” said Sanjay. According to Sanjay, these
meetings helped in resolving any residual conflicts or animosities left over from business differences.

When asked about arguments and debates at the meetings, Sanjay candidly remarked that conflicts and
arguments were not strange to any family, but they made it a point not to carry any grudge to the next
meeting. Arguments were considered healthy as long as they did not affect relationships. “We have many
fights and arguments,” said Sanjay, “but at the end of the meeting, everyone gets together and has lunch

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together.” “Ya to samjho, ya samjhao” was the often-used slogan in these meetings; literally translated, it
meant “Either convince, or be convinced.”

The multiple-platform-led decision-making process had proved extremely effective in keeping the family
together, but consensus slowed at decision-making time, making the company somewhat risk-averse. The family
realized an impending need for a faster boardroom-to-branch execution and a faster reverse feedback cycle from
branch to boardroom. Was it possible to speed up the current family decision-making style, even while keeping
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it within the family? Was it in Bikanervala’s business interest to continue with the current system, where
professionals were inducted to bring new ideas but decision making mostly remained within the family?

Innovation

True to its Marwari origins, Bikanervala encouraged innovation in the family. Innovation had worked for
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the company in the past, when Shyam Sunder had first proposed the idea for a packaged-snacks business;
soon after, his brother, who had taken a baking course, had proposed starting a bakery-cum-restaurant chain.
The former became a huge success, and the latter turned out to be so popular that it was later added as an
extension to every Bikanervala outlet. Ears firmly to the ground, Sanjay had sensed an elite market for
exotic mithai, which was purchased by high-end customers on special occasions or for gifting. Calling the
initiative “Saugaat,” or “gift”. Sanjay and his wife, Renuka Aggarwal, had recently started a new line of
fusion mithai, enlisting chefs who had worked with leading French bakeries, such as L’Opera. Envisioned
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as a gifting boutique for the wealthy, Saugaat used exotic ingredients such as Valrhona chocolate to produce
new, innovative variants of mithai. This was also the first time a woman in the family would be at the
forefront of managing and leading a venture within Bikanervala. Humble about the support Sanjay and
Renuka had received from the family, they explained that years of accumulated wisdom about the business
within the family had helped them improve their idea as they went through multiple rounds of recalibration
and discussions with the elders.

With the increasing consolidation and formalization in industry practices, how would the family still be
able to support innovative ideas?
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THE ROAD AHEAD

Kedarnath emerged from his musings and started making a mental list of decisions to be made at the next
family council meeting.

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Competing effectively with large MNCs and an aggressive Haldiram’s demanded technical expertise in supply

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chain management, distribution, advertising, and contract law. Expanding to new locations meant that the family
would have to look beyond family and friends when filling senior positions. Moreover, quality professionals
were not as easily available in smaller cities. Attempts at international expansions and a fair share of setbacks in
international franchise relations had also led Bikanervala to realize that it needed more professional help with
cross-border legal contracts and international business laws. All this would mean recruiting more professional

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managers in addition to family members as branch managers and functional heads.

More professional staff in senior management also meant offering compensation and perks per global fast-
moving consumer goods (FMCG) industry standards, some of which were excessive when compared to the
current standards of family members’ compensation in these positions. How could Bikanervala maintain
parity in compensation? Was the Marwari principle of “seniority” in terms of age and experience in conflict
with the principle of “merit” when it came to promotions and financial rewards? As it hired more
professionals, how could the valuable tacit business knowledge of the family be leveraged and built further?

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How could Bikanervala ensure that the professionals would fit into the business and understand the culture?
If it did decide to hire professional senior management, how could it ensure they would understand the
business and the family? Alternately, Bikanervala could invest more in upskilling family members through
formal on-the-job training or through higher education and classroom training. Was there scope within the
organization to institutionalize a comprehensive training program for the family?

As Bikanervala grew in size, scale, and scope, it had to consider business partnerships and, perhaps, private
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investments. Should it also consider inducting independent directors onto the board? A lot of decisions continued
to be made around the dinner table rather than in the board room. How would the presence of a stranger impact
the space for open arguments amongst the family members? Would an independent director be able to
understand and appreciate family priorities? There was also the looming question of succession planning in the
room. How should the family decide who was best suited to lead Bikanervala’s next phase of growth? It had to
be someone who had the family’s trust, as the challenges that awaited the company required making tough
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decisions. At the same time, the decision had to be perceived as fair to all members of the family.

With the fourth generation, it had become practically difficult to live together, and some siblings and
cousins started moving out. Members entering the business included many who had not spent their
childhoods together nor spent time in the traditional household, as had earlier generations. While the
business was administrated by their uncles and grandfathers, they did not have the same exposure to implicit
family rules of consensus, deference to seniors, and frugality. The group was expanding geographically and
found it increasingly difficult to attend all family functions and gatherings. How could the family keep its
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values intact with the increasing size and geographical spread of its members as well as the absence of
homogenizing factors such as a common family upbringing?

There were also traditions that needed to be urgently revisited. Traditionally, the business had been
dominated by men in the family, but with changing times, it was now imperative to establish gender equality
in the business. Kedarnath thought about how his family had stayed together and survived so many
challenges. It could have been because of the open family meetings, growing up together in the same
household, or consensus-based decision making. It could also have been a combination of all these factors.
Kedarnath was worried that the power of these informal norms would be diluted with time. How could he
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ensure these rituals continued in both practice and spirit? Could there be a family rulebook or constitution?

Kedarnath opened his eyes and sighed—so many decisions, so little time.

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EXHIBIT 1: TRADITIONAL INDIAN SNACKS AND SWEETS

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Mithai refers to traditional Indian desserts typically prepared using thickened milk, dry fruit, and sugar,
among other things. Mithai is used on multiple occasions and for multiple purposes, such as for post-meal
desserts, as offerings to gods, as gifts on festivals across all religions, and before/during important events
for good luck, such as inaugurations or family weddings.

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Most of the annual sales of mithai in India take place during the week running up to Diwali, the Hindu festival
of lights, marked by the exchange of gifts between friends and family.

Namkeen, literally translated as salty, are usually deep-fried or roasted small crisp snacks sold by weight
and very similar to wafers. Namkeen is strongly ingrained in the Indian culture of hospitality, as they have
long been considered a must-have in a household to serve to guests. Indians also have a strong culture of
snacking, a trend that is expected to grow. While namkeen, just like mithai, varies in taste and raw materials
from state to state, western regions in India dominate the industry with their variants.

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Sources: Paul Armstrong, “Mouthwatering Mithai: The Sweet Treats That Define India,” Forbes India, February 28, 2017,
accessed May 18, 2020, www.forbes.com/sites/armstrongpaul/2017/02/28/mouthwatering-mithai-the-sweet-treats-that-
define-india/#5e010bfe7f89; Pavitra Kumar, “The Black Sheep: Tragedies and Triumphs,” in Bhujia Barons: The Untold Story
of How Haldiram Built a 5000-Crore Empire, Digital Edition (India: Penguin Random House India, 2016), 1841 –1849; Patrina
Sarkar, “Namkeen Is Hindi for Savory Snack Foods,” The Spruce Eats, January 6, 2020, accessed May 18, 2020,
www.thespruceeats.com/definition-of-namkeen-1957494; “Top 10 Bikano Namkeens for Welcoming Your Guests,” Bikano,
September 7, 2018, accessed May 18, 2020, www.bikano.com/blog/top-10-bikano-namkeens/.
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EXHIBIT 2: MARWARI – THE COMMUNITY OF BUSINESSMEN

Marwar refers to the central and western region of Rajasthan, which is also the most infertile part of the
country. India has historically been a primarily agricultural country, deriving most of its produce from North
India’s fertile plains, which are starkly different from Rajasthan’s barren deserts. The people born in Marwar,
called Marwari, traditionally learnt to survive in the harsh living conditions of the desert. The desert also
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offered little opportunity to make money, which led to a tradition of leaving their family in their ancestral
villages and venturing to other parts of the country to make money. Once settled, they would call upon their
community to work with them and expand their business. Gradually, Marwaris have grown to be recognized
as a community of skilled and resourceful businesspeople.

Marwaris remain very traditional in their approach towards life and family, and they still hold on to outdated
traditions in which women are not seen as equal participants or stakeholders in family businesses. Marwaris
also follow a joint family system wherein all generations of the family live under the same roof, as male
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children do not leave the house after marriage but bring their spouse to live in the same house. Members
of a joint family also traditionally share all the tasks of cooking, cleaning, and taking care of children.
Marwaris also have strict traditions and values, which include considering the word of the elders of the
family to be final in all decisions.

Source: Pavitra Kumar, “Greener Pastures: The Might of the Marwars,” Bhujia Barons: The Untold Story of How Haldiram Built
a 5000-Crore Empire, Digital Edition (India: Penguin Random House India, 2016), 695 –711.
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of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
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EXHIBIT 3: BRAND VALUE SHARES IN THE PACKAGED SAVORY SNACKS CATEGORIES

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(INCLUDES WAFERS AND CORN PUFFS, AS WELL AS NAMKEEN)

Brand Company Value Share (2019)

Haldiram’s Haldiram Foods International Pvt. Ltd. 9.9%
Bingo! ITC Ltd. 9.2%

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Balaji Balaji Wafers Pvt. Ltd. 7.0%
Lay’s PepsiCo India Holdings Pvt. Ltd. 6.2%
Parle Parle Products Pvt. Ltd. 5.2%
Kurkure PepsiCo India Holdings Pvt. Ltd. 4.7%
Yellow Diamond Prataap Snacks Pvt. Ltd. 3.2%
Bikano Bikanervala Products Pvt. Ltd. 2.6%
Bikaji Bikaji Foods International Ltd. 2.6%
Britannia Britannia Industries Ltd. 1.8%

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Source: “Savoury Snacks in India,” Euromonitor International, August 2019, accessed May 14, 2020.
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EXHIBIT 4: BIKANERVALA ORGANIZATIONAL STRUCTURE

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Kedarnath Aggarwal
Chairman
Bikanervala Group

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Board of Directors

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Shyam Sunder Aggarwal
Managing Director
Bikanervala Foods Pvt Ltd
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Functions Outlets

Member,
Third- Research &
Outlet 1
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Development
Generation
Brothers

Member,
Third-
Finance Outlet 2
Generation
Brothers
No

Member,
Third-
Public Relations Outlet 3
Generation
Brothers

Member,
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Third- Purchasing Outlet 4

Generation
Brothers

Source: Created by the author using information collected through company interviews.

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EXHIBIT 5: FINANCIAL PERFORMANCE OF BIKANERVALA AND ITS COMPETITORS

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Operating EBITDA/
Total Debt/ Total Debt/
FY 2018 Income Operating
Total Net Worth EBITDA
(in ₹ bn) Income
Haldiram Snacks Pvt. Ltd. 26.19 21.4% 0.20 0.41
Prataap Snacks Ltd. 10.37 8.4% 0.01 0.09

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Bikanervala Foods Pvt. Ltd. 7.75 11.4% 0.22 0.51
Bikaji Foods International Ltd. 7.83 12.7% 0.50 1.40

Note: FY = fiscal year; EBITDA = earnings before interest, taxes, depreciation, and amortization; bn = billion.
Source: Compiled by the authors from the following rating documents from ICRA Limited: ICRA Limited, Haldiram Snacks
Private Limited: Rating Reaffirmed, January 31, 2020, accessed May 14, 2020,
www.icra.in/Rationale/ShowRationaleReport/?Id=92121; ICRA Limited, Prataap Snacks Limited: Ratings Reaffirmed at
[ICRA]A+(Stable), August 30, 2019, accessed May 14, 2020, www.icra.in/Rationale/ShowRationaleReport/?Id=88132; ICRA

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Limited, Bikanervala Foods Pvt Ltd, February 22, 2019, accessed May 14, 2020,
www.icra.in/Rationale/ShowRationaleReport/?Id=77828; ICRA Limited, Bikaji Foods International Limited, April 5, 2019,
accessed May 14, 2020, www.icra.in/Rationale/ShowRationaleReport/?Id=79371.
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No
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of copyright. Permissions@hbsp.harvard.edu or 617.783.7860