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CASE STUDY
GOLI - MAKING OF A
CROREPATI BY SELLING
VADA PAV
Mr. Deepak Sharma
Assistant Professor (Selection Grade),
Dr. Gaur Hari Singhania Institute of Management & Research,
Kamla Nagar, Kanpur (UP) INDIA
Email id: deepak.sharma@ghsimr.org
Mr. Randhir Kumar Singh
Assistant Professor,
Dr. Gaur Hari Singhania Institute of Management & Research,
Kamla Nagar, Kanpur (UP) INDIA
Email id: [email protected]
ABSTRACT
The case is written on the leadership style in entrepreneurship.
Goli Vada Pav is a company founded by Venkatesh Iyer and
his friend Shivdas Menon in 2004. The objective of the Goli
Vada Pav is to provide the affordable food items which can be
eaten anywhere and at anytime. Venkatesh Iyer and Shivdas
Menon faced a lot of problems in establishing the business
but ultimately they are able to get success in their motive.
They compete with the international brands like McDonald
and others but ultimately they are able to make a position in
the market and customers. Now-a-days there business are not
only situated in Mumbai but also in other places. In order to
fulfill the demand, Venkatesh Iyer and Shivdas Menon have
decided to adopt the concept of franchising and they have
successfully implemented it.
Venkatesh Iyer and Shivdas Menon adopted various strategies
of marketing in order to increase the sale of the eatable items.
The various concepts of strategic management focusing on
competitors also adopted which leads to the success of the
organization.
It can be concluded that it is Venkatesh Iyer whose Charismatic
leadership style in entrepreneurship leads to the success of
Goli Vada Pav Company which is fully supported by Shivdas
Menon.
Key Words: Goli, Charismatic leadership, HACCP, Business
Model.
It looks like something you must not ingest, and savoring its
tantalizing flavors requires that you willfully abandon all basic
rules of gastronomy and hygiene. It is perhaps the least likely
item upon which to build India’s very own fast food chain, a
product that has the potential of becoming an international
brand as big and powerful as, McDonald’s or Burger King.
This product was vada pav, the Mumbai’s local version of
Burger. The product was being made and sold by numerous
small vendors in almost all markets of Mumbai. Challenging
the experienced local players, that too, for ethnic food, was
not easy. Yet two Mumbai entrepreneurs with a background
1
Crorepati is a person who resides in a household whose net
worth or wealth exceeds ten million rupees, Crore is unit of
measuring the money. 1 crore is equal to 10 Million Rupees.
2
Vara pav, is also spelled wada pav, is a popular vegetarian
fast food dish native to the Indian state of Maharashtra (for
further information pl. refer to annex. 04 given at the end).
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in corporate finance embarked on this quest seven years ago.
The competition was stiff and from both ends, as building a
brand for this home-grown version of the burger meant
competing with countless successful roadside rivals, and take
on big players like McDonald and Burger King simultaneously.
Goli Vada Pav, an ethnic fast food chain founded in 2004 by
Venkatesh Iyer and Shivdas Menon, changed the way this
popular snack is prepared and consumed. It took the snack
indoors into a more gentrified ambience and made it a sterilized,
upmarket version of its original self, without tinkering one bit
with the alluring taste that sustains vada pav’s mass appeal.
Goli offers a range of vada pavs including palak makai tikki,
cheese vada pav, etc. has proved to be big earners. Goli has
sold over 3.5 crore such vada pavs in the last six years, priced
between Rs.10 and Rs. 30(Indian Rupee).
Running a business selling vada pav might seem like a simple
idea, but entrepreneurs Venkatesh Iyer and Shivadas Menon
were planning a completely different vada pav manufacturing
and selling business unit. The scale of operations desired
required set up with capacity of 75,000 vada pavs per day, and
that is not all; they also wanted it with hands-free technology
with each of vada pav going through metal detectors and x-
ray machines to maintain hygiene and all this without
sacrificing the taste.
FAST FOOD
Fast food is the term given to food that can be prepared and
served very quickly. While any meal with low preparation time
can be considered to be fast food, typically the term refers to
food sold in a restaurant or store with preheated or precooked
ingredients, and served to the customer in a packaged form
for take-out/take-away. Outlets may be stands or kiosks, which
may provide no shelter or seating.
INDIAN FAST FOOD
Many of the traditional dishes have been adapted to suit the
emerging fast food outlets. The basic adaptation is to decrease
the processing and serving time. For example, the typical meal
which called for being served by an ever alert attendant is
now offered as a Mini-Meal across the counter. In its traditional
version, a plate or a banana leaf was first laid down on the
floor or table. Several helpers then waited on the diner, doling
out different dishes and refilling as they got over in the plate.
In the fast food version, a plate already arranged with a variety
of cooked vegetables and curries along with a fixed quantity
of rice and Indian flatbreads is handed out across the counter
against a prepaid coupon. The curries and breads vary
depending on the region and local preferences. The higher
priced ones may add a sweet to the combination.
INDIAN FAST FOOD MARKET
India’s fast food market is worth US$9.33 billion, registering
year-on-year growth of 9% in 2010. The market is stipulated to
reach US$12.25 billion, with CAGR of 7% in the next 3-5 years
(2010-2014).The moderate growth is primarily attributed to
higher regional and local penetration of fast food outlets in
Tier II and Tier III cities along with improved household
disposable income. Demographic segments aged between 25-
35 years are the largest consumers of fast food, with
approximately 35% eating out once a month in cosmopolitan
cities such as Bangalore, Hyderabad, Mumbai, Delhi, Kolkata,
etc. The fast food market volume sales stood at 455.9 billion
transactions, with year-on-year growth of 9.1% in 2010.
Mumbai being the business capital of India is the most
preferred destination for urban young business executives,
and is the leading fast food market across India, with average
eat outs of 6-8 times per month. India is the third largest fast
food market space across Asia-Pacific accounting for 12% of
the total market in 2010. The working culture and lifestyle of
Indians was drastically changed, with the opening of Indian
economy in 1990’s. The emergence of young working class
changed many customs, like eating home cooked food. One
major attribute of most young working professionals is lack of
time. Vada pav had always been one of favorite fast food for
the young population in Maharashtra, especially in Mumbai
(Bombay). LPG had made people more aware of food hygiene
issues and health has emerged as one of key concern.
SELECTING THE RIGHT PRODUCT
Venkatesh in his working with retails with Balaji Corporte
Services got hands on experience in running a retail chain,
became interested in food industry in 1995. He explored with
many food items but could not make up his mind for selecting
any one. The idea of ethnic food came out by chance when he
was discussing informally with a friend who was working with
Kellogg’s India. His friend claimed that ‘Indian prefer Desi
food’. This enlightened Venkatesh to consider Indian ethnic
food as his business. When he was studying the idea further
he decided to take up finger food, something that could be
eaten while on move. After evaluating various factors and
choices Venkatesh narrowed the choice to Idli and Vada Pav
as his product.
After careful analysis Venkatesh selected the Vada pav as the
sole product for its business innovation based on certain
advantages like this being a finger food i.e. no plates, no
spoons, no tables; no chairs required which saves the fixed
asset investment in the business. Vada pav is also a mobile
food which one can eat while walking, talking, standing,
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travelling, shopping etc., a universal appeal to it with the type
of ingredient like potato, wheat and spices and this being
food for the masses. Also this was among some of the fast
foods where the product is easy to prepare in a short span of
time. This product is made up of potato and wheat which has
a universal appeal and contains “besan” (Gram flour) and
spices as the other ingredient which adds the ethnic appeal to
the product. Product prices vary within the range of Rs. 10-25
(Indian Rupees) according to the variety of Vada Pav offered.
With this and whatever information that could be gathered,
Venkatesh stated the business planning and collected more
information of existing suppliers of vada pav, their taste,
demand, quality of pav, size and weight of vada, type of raw
material and ingredients used, price offered. He quickly
identified the basic characteristics of the vada pav business.
It was only because of this firsthand information, Venkatesh
was able to select the most preferred taste and could offer the
product with desired characteristics.
Traditionally, vada pav making is a small scale traditional set
up which could be started with minimum investment. The
traditional set up needed a gas/fuel based burner, a deep frying
pan, few utensils, and in majority of cases the vada pav were
made and sold on hand carts. The product is supplied in paper
plates or in paper bag. This traditional system had many
weaknesses, like-
• Frequent unpredictable changes in taste.
• Quality depended entirely on the Cook or person
making vada.
• The production was limited and capacity fixed.
• Unhygienic conditions of making vada, as most work
is done by hand and the utensils, cooking ware were
mostly open.
• Improper place to sit and eat vada pav.
In spite of all these problems, vada pav remained most
preferred all time fast food because it offered some unique
advantages like low cost product, easy availability, tasty to
eat, and any time food that could be substituted for meal. The
business plan was to offer vada pav in a hygienic and clean
environment, at an affordable price.
THE BEGINNING
Venkatesh developed the entire business plan by 2003. Now
he needed finance, he took some money from friends and
relatives and Shivdas Menon, his old friend decided to join
the venture as partner. Both of the promoters of Goli Vada Pav
come from corporate finance area and Venkatesh had
knowledge of food retailing.
Venkatesh & Shivadas Menon quit their regular jobs and
teamed up in 2004, and put huge chunk of their savings in the
venture and also borrowed money from friends and relatives.
They invested Rs1.0 crore to buy equipment and a van, and
build a 500-sq-ft kitchen at Dombivli. They hired 20 people to
handle the kitchen, eatery and transportation. For the next
one year, they visited every vada pav vendor to understand
the ingredients and to identify the impact of these on the taste
of product. They also collected data by visiting all the major
vada pav sellers in Mumbai (Bombay) and surreptitiously ask
them the number of pavs they sold every day to get an estimate
of the sales and demand. By the time Venkatesh erected his
small outlet, selling vada, tea and some other snacks like
samosas, he had logged a number of failed attempts to set up
Goli vada pav kiosks on the footpaths of Mumbai.
Initial response was satisfied, the sales and demand was
steady on rise, but Goli Vada Pav was nowhere close to
reaching its present scale of operations, even two years after
launch. They were churning out a few hundred pavs the
traditional way. But they faced huge wastage, pilferage and
quality issues. High footfalls at its outlets translated into high
sales, but the operations were fraught with unnecessary
wastage of its raw ingredients, which escalated costs, and a
lack of standardization of quality and taste. While the
traditional thelawalas would smash the potatoes and dip the
preparation in batter using his bare hands, at Goli each step in
the making of the vada pav is automated. Venkatesh was quick
to observe that in India, there is not much food safety norms
followed when it comes to street food. Consumer has no idea
when and how the potatoes are washed, where they are stored
and who handles them. Goli decided to offer branded and
quality food at comparable rates. The process involved is
similar to that of making a McDonald’s burger.
There are many hurdles in running a food business in India.
The major one being the price at which these food items are
sold tends to fluctuate on daily basis and second, the shelf
life of food stuff is short. India being a tropical country, the
micro-organisms multiply fast, diminishing the shelf life of the
food items. The vada standardization offered most complex
problem. It’s not that they did not try. To increase the shelf life
of its product, the firm tried various technologies used by
dairy and other perishable-product manufacturers: ultra-violet
rays, nitrogen gas chambers, and even blast-chill refrigeration.
But none of these methods produced satisfactory results.
The key problem was of vada, a vital ingredient, had low shelf
life.
Goli team after many experimental failures realized the limited
fund condition they had. They searched for financers; it was
not an easy journey for the entrepreneurs. After receiving a
funding of Rs 4.5 crore in 2007 from a high net-worth individual,
Goli was able to scale up the business Venketesh while
searching for solution of Vada shelf life came in contact with
Vista Foods, which prepares burgers for McDonald. Vista
Processed Foods, a subsidiary of the US company OSI, one
of the world’s largest food processing corporations, which
prepares burgers for McDonald’s. Goli Vada Pav outsourced
the manufacturing of the potato dumpling to OSI’s fully
automated plant near Mumbai. This plant has a global standard
for food safety, and can prepare 100,000 portions in five hours.
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The plant is certified for hazard analysis and critical control
point, a global standard for food safety. Right from slicing,
peeling, dicing, sealing, packing and delivering, there is a
quality check and control at every stage. The vadas or golis
as they are called are made at the OSI Inc Taloja unit, frozen at
18°C, packed and sent to our cold storage unit in Dombivli in
refrigerated vans. From Dombivli, these vadas are then
supplied to the cold-storage units in Nashik, Aurangabad,
Nanded, Nagpur and Bangalore. The standardized vada pav
has a shelf life of nine months.
Goli vada pav had have five refrigerated vans and each has a
capacity to carry 12 tonnes of vada, ie, one van can easily
store 800 cartons which comes to approximately two lakh
vadas. These are supplied twice a week to all outlets within
Mumbai; once in a week to Nanded, Aurangabad and Nashik;
once in 15 days to Pune and once in two months to Nagpur
and Bangalore. The regional manager audits the van regularly
and updates the log-book with details of the temperature
maintained, and the vadas. These packets are marked with the
date of manufacture and the date of expiry. If anything is not
correct, that packet can be identified and its origin and maker
can be identified. At the Goli outlets, these vada pavs are
unpacked, deep fried and served with various kinds of stuffing.
Goli, expanded the sales volume and has sold the product
purely through word-of-mouth publicity. Realizing the
enormous potential of business, Goli has been able to open
100 franchise stores in cities such as Mumbai, Bangalore, and
Pune. It was a gamble that paid off, thanks to rising incomes
and fast-changing dietary habits among Indians in a buoyant
economy. The response was good and Goli expanded to 10
outlets in 4 months. Venkatesh had brilliance of providing
uniform to his staff in red and white ties and they had large
pictures of Goli product on the walls, just like McDonald’s
and Burger King. Goli Vada Pav not only maintains the quality
and taste of the food but also ensures economical pricing of
it. Currently the customers are served the basic vada pav at an
affordable Rs.17 only, in addition to it, they offer ten different
varieties of vada pav including palak makai tikki, cheese vada
pav, and aloo tikki pav etc.
MISSION STATEMENT
To provide standardized ethnic fast food in clean and hygienic
conditions to mobile Indian masses at economic pricing.
VISION STATEMENT
1. To create ethnic Indian brand in fast food industry.
2. To create fast food entrepreneurs across the country.
3. To provide certified career opportunities.
According to company website, the aim of Goli Vada Pav is to
provide standardized ethnic fast food in clean and hygienic
conditions to mobile Indian masses at economic pricing. The
innovation made by Goli Vada pav in its product line and the
franchisee model are the key supporting factors which are
aligned to the vision of the company.
RESTRICTED ENTRY
Right from day one goli’s kitchen had restricted entry. Goli
Manufacturing has developed a set of rules to be followed in
its facility. These rules apply even to anyone visiting the plant.
One cannot enter the kitchen without wearing gloves and
safety gears; even the shoes are thoroughly washed with
chlorine. The Goli outlets have been carefully designed
keeping in mind the cleanliness and hygiene aspects.
“Stainless steel equipment is being used at the outlets because
they are rust-free and easy to maintain. Wooden equipments
are not hygienic and there is fear of insects like cockroaches
or termites which thrive in wood. Secondly, the uniform red
and white tiles in every outlet compel the franchisee to maintain
his premises clean and hygienic.
Besides the outlets, the maintenance at the godowns or store
houses is crucial. The ‘master franchiser’ and area manager
are primarily responsible for the maintenance of the godowns.
Most important in the maintenance schedule is the temperature
levels in the refrigerator. This is to ensure that the food does
not get stale or any kind of micro-organisms grow that could
spoil the quality of food.
BUSINESS MODEL
Starting with its operations in early 2004 with the concept of
single ‘Quick service restaurant’, it cashed in on business by
adding the differentiating feature in the India’s very own fast
food i.e. Vada pav with different fillings innovating the same
to provide enriched experience as well as nutritional benefits
of having a Vada pav in comparison to road-side vendor. Also,
the products are made in fully automated HACCP
3
certified
hands free plant.
3
Hazard Analysis Critical Control Point or HACCP
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The gram flour-coated dumplings are packed, sealed in cartons,
with manufacturing and expiry dates clearly stated, and
transported in refrigerated trucks to warehouses and thereafter
to franchises, where they are unpacked, deep-fried to order,
and served scalding hot to customers. Each outlet has a single-
touch fryer, designed specially for the company by engineers
at the Veermata Jijabai Technological Institute in Mumbai.
Goli Vada pav tried to bring in the consistent flavor to its
product by inspiring its supply chain from the McDonald way
of maintaining consistency. The filling inside the pav, better
known as Goli to its customers, is centrally prepared in Mumbai
and reaches half-baked to its various stores which are popularly
named as “Goli Vada Pav No.1” across Maharashtra to provide
the same taste to its customers wherever they might be. The
Pav or the Indian bread is procured from individual city’s for
all the stores located in a particular city.
Goli Vada Pav’s franchise outlets have grown from 10 in 2004
to nearly 100 by 2010. Its turnover rose from 3 million rupees
in its first year of operation to 150 million rupees last year. The
chain is planning a massive expansion to 500 franchise outlets
across India in the next five years, with a more than tenfold
jump in turnover to 1.8 billion rupees.
Initially Venkatesh was earlier also considering idli, but then
he thought of vada pav as he wanted to give people food that
can be eaten on the go. The job profiles of most people today
requires them to keep moving, there it no time to sit down and
eat. For such grabbing a vada pav while commuting is the
best and cheapest option, but lack of hygiene is a concern for
most consumers, Venkatesh exploited this opportunity.
Goli, which offers a range of vada pavs including palak makai
tikki, cheese vada pav, veg cutlet pav, schezwan vada pav and
aloo tikki pav, has proved to be a big earner. Goli has sold over
3.5 crore such vada pavs in the last six years, priced between
Rs 10 and Rs 30. The company has tied-up with Vista
Processed Foods, a subsidiary of US-based OSI, to make vada
pavs. OSI also makes burgers for the McDonald chain
worldwide and around one lakh patties everyday in its plant
at Taloja, near Mumbai.
The fryer machine that Veermata Jijabai Technological Institute
engineers designed for Goli prepares pavs with the touch of a
button. Vadas made at fully-automated hazard analysis critical
control points (HACCP) certified hands-free plant are frozen
at -18 degree Celsius and packed and set to the outlets. The
standardized vada pav has a shelf life of nine months and can
be exported. At the Goli outlets, these vada pavs are unpacked,
deep-fried and served, with various kinds of stuffings.
Every Mumbaikar’s favorite snack which can be taken anytime
any where the one and only & our very own favorite — vada
pav; which is now machined made. It has shelf life of nine
months. The new machine made vada pav is known as Goli
vada pav. Right from slicing, peeling and dicing each process
is completely automated. The process involved is similar to
that of making a McDonald’s burger. These vadas or golis as
they are called after being prepared are frozen at - 18 degrees
Celsius and then packed. These packets are marked with the
date of manufacture and the date of expiry. Well after knowing
this fact, I want to ask every mumbaikar; not only the
mumbaikars but each and everyone whether they will prefer
eating machine made vada pavs or the delicious freshly made
hot ones at the vada pav centre. Will there lay a difference in
taste having a freshly made vada pav or will one prefer the
machine made vada pav in this machine age, where everything
is automated.
They serve 10 different varieties of vada pav ranging from
Indian onion bhajji stuffing to Chinese sauce stuffing
(Annexure 2 for product offerings). They have tied-up with
Vista Processed Foods; a subsidiary of the US based OSI Inc,
which supplies burgers to McDonald Chain worldwide, for
the last forty years. There is an automated process for every
step: slicing, peeling, dicing, sealing, packing and delivering
the vada pav. There is a quality check and control at every
milestone. The vadas are frozen at -18 degree Celsius and
packed and set to the outlets. At the Goli outlets, this vada
pav is unpacked, deep fried and served, with various kinds of
stuffing. The standardized vada pav has a shelf life of nine
months.
Venkatesh has followed economy pricing strategy for Goli
Vada Pav. The idea is to keep the basic vada pav for Rs 10.
However, there will also be some variations on the higher end,
up to Rs 22. The company also has mixed vegetables vada,
palak-makai vada, schezwan vada, cheese vada and sabudana
vada from now on in Pune. The pav will be made locally made
and the vadas will continue to be manufactured in Mumbai
with automated technology.
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For Venkatesh and his business partner, Shivdas Menon
maintaining the quality, scalability of their venture as well as
the shelf life of their product is important. Goli Vada Pav makes
75,000 vada pavs each day with hands-free technology and
each of them goes through metal detectors and X-ray machines
to maintain hygiene and taste. The vadas are made in Mumbai,
coated with besan and then stored at -18 degree Celsius. They
are then sent to the various franchise outlets, where after
quickly frying for five minutes they are ready to serve.
FRANCHISE EXPANSION
Goli vada pav was incorporated with the idea of creating an
ethnic snack chain offering the staple Mumbai street food
vadapav in standardized, yummy, hygienic manner at economic
pricing there by becoming an alternative to traditional fast
food. Goli Vada Pav is available in nearly 80 branches across
Maharashtra. It has come to Bangalore through Goli Vada Pav
No.1 outlet, which is located in 1st Block, Jayanagar. According
to M.C. Amarnag, the partner of Mysore Inc., which is the
franchisee of Goli, all the products are prepared in a Hazard
Analysis Critical Control Point (HACCP) certified plant in
Mumbai. So the level of hygiene of these products is
guaranteed. The company is planning a massive expansion,
with 500 franchise outlets across India in the next five years.
CENTRALISED BUYING OF RAW MATERIAL
The potatoes are from Punjab, the processing is done by the
specialist that works for McDonald’s and Goli Vada Pav turns
them into the Mumbai snack that was hot long before burgers
came to India. All this at 50,000 vada pavs a day, standardized
to the last gram. At the heart is the kitchen, where the potatoes
are turned into par-fried patties and then frozen before being
fed through a cold chain to 65 outlets in the state.
NEW MARKETS EXPANSION
Selling and eating vada pav may be a part of the street food
culture for the city, but for Venkatesh it was about dreaming
about competing with multi-national burger outlets. From a
small outlet in Kalyani, Mumbai, today he has gone to 27
cities and 75,000 vada pavs a day and is all set to expand to 30
more outlets in Pune and over 500 nationwide. At present,
Pune has two Goli Vada Pav outlets. The other locations in
Maharashtra include Nasik Dhule, Shirdi, Ahmednagar,
Aurangabad and Jalna.
The company is eyeing new outlets are in unrepresented
market place in the next five-years, adding its new outlets
would all be on the franchisee model (Goli vada pav calls for
franchisee (Annexure 3) . The vada pav-retailer offers a range
of vada pavs including palak makai tikki, cheese vada pav,
veg cutlet pav, schezwan vada pav and aloo tikki pav. The
company has tied-up with Vista Processed Foods, a subsidiary
of US-based OSI Inc, to make vada pavs. Vista makes around
one lakh patties everyday in its plant at Taloja, near Mumbai.
OSI also makes burgers for the McDonald chain worldwide.
On future plans, Venkatesh wants Goli product to reach every
city. Goli had signed with a Chennai Food seller, and
negotiation is on franchisees in Hyderabad, Delhi, Punjab
and Rajasthan.
Goli is now planning a massive expansion by opening around
500 outlets pan-India is eyeing a nearly 10-fold jump in its
turnover to 180 crore over the next five-years. It will also scout
for partners in Dubai, the UK as well as Singapore. Initially,
the plan is to raise a venture capital funding of 40 crore in next
few months to scale up its operations.
UNIQUE ADVERTISING & BRANDING
The company has branded Goli vada pav and has positioned
it as the local burger. For this the company used many
innovative modes like going to the masses, on Ganesha festival
‘Ganesha Chaturthi’, it made a huge Vadapav base over which
Ganesha idol was kept and huge procession took place and it
was called as ‘Goli Ganpati’. It also made some music
compositions with ‘Goli’ as the centre of attraction and played
the same at their stores so that people who come to those
stores to eat vada pav or pass by could associate with the
brand name ‘Goli’. Also, company gave CDs to auto drivers to
play it in their auto while they are driving and played CDs in
Ganpati mandals so as to spread brand awareness among the
masses. It also organized rock shows where it played its music
CDs and distributed prizes to the best dancers in the
competition. Company also started with putting slogans like
“Goli Goli Goli...Vadapav Goli” during the train schedule
announcements at Mumbai local railway station.
Company has relied on positive word of mouth for advertising
and has been using some latest media like face book and
twitter for its promotion. Goli has also used the innovative
technique of creating stories with goli vada pav as the key
place that attract many users, and post them on the company’s
web site.
UNIQUE PRODUCT DIFFERENTIATION
Goli product differentiation strategy was through the variety
of vada it uses to make the product, in comparison to its
competitors ranging from high-end food joints like
McDonald’s, Pizza hut etc. to low end competitors like local
Vendors, Railway Platform Vendors, Desi Vada pav, Joshi Vada
pav et al. The reason for the competition from High-end
International brand was the franchisee location of the Goli
stores where these players were found to be present and low
end competition was the high proliferation of road-side
vendors and more and more ethnic fast food chains entering
into this segment due to availability of market gap.
FUTURE PLANS
Goli Vada Pav plans a massive expansion by opening around
500 outlets pan-India and is eyeing a nearly 10-fold jump in its
turnover at Rs180 crore over the next five-years. Presently,
the company has a 78 outlets strong network and a turnover
of Rs18 crore. These 78 outlets mostly are concentrated in
Maharashtra and Bangalore. But Company has already entered
Chennai market. The company is eyeing Rs180 crore turnovers
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once its 500 outlets are in place in the next five-years, and
adding its new outlets would all be on the franchisee model.
The company has tied-up with Vista Processed Foods, a
subsidiary of US-based OSI Inc, to make vada pavs. Vista
makes around one lakh patties everyday in its plant at Taloja,
near Mumbai. OSI also makes burgers for the McDonald chain
worldwide.
Goli is also planning to get into small kiosks of size 75 sq. ft.
with one staff manning it and serving just one product – vada
pav. In the next five years, we plan to set up 1,000 to 1,500 of
such kiosks. Apart from that, Company has decided that would
be coming up with large outlets in the size of 1,000 to 4,000
sq. ft.
The company also harbors overseas plans, once they achieve
the target of 200 outlets; the company plan to scout for partners
in Dubai, the UK as well as Singapore. Trade enquiries are
already coming from these regions. The company is keen to
expand the company’s footprint in USA, Europe and Australia
and is scouting for franchise partners. The growing popularity
of vada pav, which is native to Mumbai, across India, does
not surprise them.
India’s food retail business, which accounts for 26 per cent of
the country’s GDP and is currently worth $70bn, is expected
to more than double to $150bn, according to the global audit
and advisory firm KPMG. According to a report - Indian Fast
Food Market Analysis - released in September by the market
researcher RNCOS, India’s fast-food market is growing at an
annual rate of 25 per cent to 30 per cent.
COMPETITION INTENSIFIES:
GOLI inevitably will face competition. Some chains have
already recognized that India’s big markets exist down the
price ladder. Domino’s Pizza has extended its international
Pizza Mania promotion to India. But while the cheapest pizza
on its United Kingdom menu costs £4.95 ($9.11), in India the
cheapest is Rs. 35 (75 cents). An innovation in India, Domino’s
has used the idea of free home delivery, if consumer order at
least four pizzas, they get free home delivery. But that works
out to just over $3.
Another U.S. chain, KFC, has launched a snack box for Rs. 49
($1.05) and a chana snacker for Rs. 25 (54 cents). Like the
Domino’s Pizza Mania fare, these are not targeted at the bottom
of the pyramid, but at middle-class customers seeking value.
Alongside the likes of McDonald’s, Subway and Pizza Hut, a
large number of Indian food chains are ready to give the foreign
giants a run for their money.
A prominent name in domestic market is Jumbo King Vada
Pav, which is Mumbai based business following cost based
promotional schemes.
REFERENCES:
1. Business Today /COVER STORY /May 16, 2010 ‘Burger
king’.
2. The Economic Times, December 31, 2010.
3. The Economic Times, March 7, 2011.
4. The Hindu, September 23, 2010.
5. The Indian Express, January 16, 2011.
6. Visit http://golivadapav.com/ on August 14, 2011.
7. Visit http://knowledge.wharton.upenn.edu/india/
article.cfm?articleid=4321on September 01, 2011.
8. Visit http://www.dnaindia.com/money/report_goli-vada-
pav-eyes-500-outlets-10-fold-turnover-jump-in-5-
years_1430359 on August 26, 2011.
ANNEXURE 01
Venkatesh Iyer on how he started the venture
The idea of having my own eatery had been simmering in my
mind for a decade, but it took me a year to refine and serve it.
Months of brainstorming and sweating it out paid off when I
opened my first outlet, Goli Vada Pav, at Kalyan, Mumbai, in
2004. I began my career as a management trainee, in 1989, in
what is now the Centurion Bank. After four years, I set up a
financial services firm, Balaji Corporate Services. Since one of
the services included raising funds for retailers, I got a chance
to study the trials and tribulations of running a retail chain.
During all these years, I knew I wanted to start my own
business, but it was only in 1995 that I decided which field it
would be—the food industry. I toyed with several ideas but
kept procrastinating as I didn’t believe the financial climate
was conducive for starting a business. The impetus finally
came from a neighbour, who was the then CEO of Kellogg’s
India. “No matter what we do, Indians prefer desi food,” he
once told me. This got me thinking about the vast opportunity
in ethnic food, especially if one were to consider the population
of more than a 100 crore.
If I could target even a fraction of this populace, the profit
could be huge. The important question was: what should I
serve? I wanted it to be finger food, something that could be
eaten easily on the move. I whittled down the choice to idli
and vada pav, finally settling on the latter. During the
incubation period, if I mentioned the idea to anyone, they
would snigger and ask, “Goli de rahe ho (are you pulling my
Venkatesh Lyer
44 Years
Age at starting current business : 37
years
Company Name : Goli Vada Pav
Headquarters : Mumbai
Seed Captial Rs 1 Crore (Indian Ru-
pee 10 Million)
Source of mony : Savings and loan
from family and friends
108
HSB Research Review January-June 2012Vol. 3 No. 1
leg)?” As a fitting response to this mockery, I named my
venture Goli Vada Pav. By January 2003, the blueprint was
ready. Besides my family, the only person who supported me
through this and eventually joined hands with me was Shivdas
Menon, an old friend and colleague (Source: http://
golivadapav.com/ on August 14, 2011).
ANNEXURE 02
Goli Vada Pav Product Range and characteristics of each
offering.
Goli Vada Pav
A unique blend of mashed potatoes and ethnic
Indian spices coated with beasen. To be served
with Sweet chutney, dry chutney and fried green
chilly.
Nutritional Benefits: Rich in Carbohydrates,
proteins, fat, dietary fibre and iron.
A combination of spicy Chinese sauce with hot
spicy vadas to be served with schezwan sauce.
Goli Schezwan Vada Pav
A combination of spicy Chinese sauce with hot
spicy vadas to be served with schezwan sauce.
Nutritional Benefits: Rich in Carbohydrates,
Proteins, Dietary fibre, fats and Vitamin C.
Goli Cheese Vada Pav
A perfect blend of cheddar cheese and spicy
hot vadas makes it a instant hit. To be served
with sweet chutney, dry chutney and green
chilly.
Nutritional Benefits: Product rich in Calcium,
Carbohydrates, proteins, fibre and fats.
Goli Sabudana Vada
Sabudana vada’s are a blend of potatoes, sago,
vegetable oil and exotic Indian spices.
Traditionally enjoyed during fast.
Goli Mix Veg Vada Pav
As the name suggests, this vada is a mix of
green peas, carrots, beans and mashed potatoes,
rice formed and coated with batter and crumbs.
Served with tomato chutney.
Nutritional Benefits: Rich in Carbohydrates,
Proteins, Vitamin A, Dietary fibre and fats.
Goli Tikki Vada Pav
Tomato flavoured vada pav renowned for its
tantalizing tangy taste. To be served with tomato
chutney.
Nutritional Benefits: Rich in Carbohydrates,
proteins, fibre and fats.
Goli Palak Makkai Tikki
This rich & nutritious product is an absolute
delightful blend of mashed potatoes, sweet corn
& spinach. To be served with veg mayonnaise
sauce.
Nutritional Benefits: This product is rich in
calcium, carbohydrates, Vitamin A, proteins and
fats.
Goli Masala Vada Pav
This product is a blend of fresh green peas,
carrot and mashed potato with exotic Indian
spice, hexagonally shaped bread coated making
it crispy and mouth watery.
ANNEXURE 03
GOLI CALL FOR FRANCHISE
Who can become franchise of Goli vada pav?
Enterprising men and women passionate about food industry
having access to prime commercial property admeasuring 350
sq. ft. with a minimum of 15 sq. ft. frontage along with power &
water connection in high traffic areas like railway stations,
market area, business, colleges & residential catchments and
ability to invest approximately 8 to 10 lacs.
Why Goli Vada Pav’s?
• Popular all time favourite convenient fast food
• Hygienic less oil fried snacks
• Output – 50 pieces can be fried in flat 6 minutes
• Universal appeal – Potato, wheat & spices
• Mobile food – Walking, talking, standing, travelling
• Finger food – No plates, spoons, tables & chairs
• Standard tasty food – 365 days a year products taste
‘YUMMY’ across locations
• Food for the masses – Economic pricing
What does the franchise get?
• Business model: A scalable time tested business
model
• Brand: 8 year old well established brand from
Maharashtra
• Standard operating procedures: in all aspects of
business
• Insulated against inflation: Franchise’s insulated
against inflation to a large extent
• Logistics: End-to-End logistics support & regular
replenishment of stocks
• Consumables: Oil for frying & packaging material
• Sourcing: Complete centralised buying & sourcing
(Oil to packaging materials)
• Continuous R & D: Seasonal as well as breakfast
menu on the cards
• Footfalls: Continuous Marketing Support to drive in
footfalls
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HSB Research Review January-June 2012Vol. 3 No. 1
• Operations: Complete Operational Support to
monitor & drive business
• Training: Initial & refresher training for business
owners and store staff
• Shelf life: Life of product increased to 9 months
• Wastages – Wastages reduced to nil
• Dry Kitchen – Ready to fry products; only mode of
cooking is frying.
In Goli Vada Pav, we seek passionate people and equip them
with essential support and assistance they need to achieve
and exceed their goals.
(Source: http://golivadapav.com/ on August 14, 2011).
ANNEXURE 04
MAKING VADA PAV
Place of origin: India
Region or state: Maharashtra
Course served: snack
Main ingredient(s): deep-fried
mashed potato pattie.
USP-
• Cheapest form of a meal
• Ever-green dish can be in breakfast, lunch, or dinner.
• Easy to make, needs minimum equipments.
• Can be eaten while travelling
Vada pav (Marathi: oM+k iko), sometimes spelled wada pav, is a
popular vegetarian fast food dish native to the Indian state of
Maharashtra. It consists of a batata vada (Boiled potato stuff
wrapped in chickpea flour, deep fried) called bonda in South
India) sandwiched between two slices of a pav. The compound
word batata vada refers in Marathi to a vada made out of
batata, the latter referring to a potato. Pav refers to
unsweetened bread or bun and may be etymologically related
to the Portuguese word for bread – Pão. Vada pav was
supposedly devised by snack vendor Ashok Vaidya outside
Dadar station in 1971.
Preparation of Vada Pav
Finely cut green chilies and ginger and a phodani (tempering)
of mustard seeds and turmeric are added to a mash of boiled
potatoes, and after dipping patties of the mash in an herb-
seasoned batter of gram flour, the patties are deep-fried. Vada
pav is typically served with a chutney (sauce) which is
commonly made out of shredded coconut “meat”, tamarind
pulp, and garlic.
Variations of the above basic dish include “cheese vada pav”
(where slices of cheese are added); “samosa pav” (where a
“samosa” is used instead of a vada); and “Jain vada pav”
(where vada ingredients do not include onions, garlic and
potatoes). Vada pav served in the nearby state of Gujarat is
usually fried in butter or edible oil. The pav is first fried in a
mixture of butter or oil and dried red chilly powder. After that
the chutney is applied in the hot fried Pav and the Vada is
placed in between. This is the only difference between Vada
pav in Gujarat and Maharashtra. In the state of Gujarat, the
original unfried Vada Pav recipe is referred to as “Bombay
Vada Pav”.
This dish was initially started as the cheapest form of a meal
for low income group, but due to its taste, this dish became so
popular that many sophisticated hotels also have started
dishing out this wonderful dish. Even today this dish has still
retained its charm as an evergreen dish, and many people
have it at breakfast, lunch or even dinner as well. Another big
reason of its popularity is that the dish can be made and
served in 1-2 minutes, and has only 2 or 3 ingredients (Source:
http://golivadapav.com/ on August 14, 2011).
