Case Study 13

Group 3
Name of case

Mayank Pareek
Shivani Chhalotre
Heena Kumari
Marisha Pimenta
 Harvest Gold: Origin
• Harvest Gold Industries Private Limited was set up in 1991 by Mr. Adil Hassan

• Company’s brand includes Harvest Gold and Harvest Selects

• Product portfolio- Breads and bakery products

• Turnover of more than Rs.1.2 Billion with “One plant, One city, One product
Industry overview
• The product was an instant hit with a Rs. 400 million turnover in just
five years
• They further diversified into related products like hamburger buns,
pizza
• Earlier there was a domination of two manufacturers Modern and
Britannia
• Demand was high and supply inadequate; hence whatever was
produced was sold
Market Scenario
• Bread was sold in wax papers

• Stand in queue-Britannia and Modern breads.

• Other competitors-Taaza and Bakemans

• Short shelf life of bread-Perishable

• Fall in Britannia’s market share

• Britannia acquired modern foods

• Reason behind crisis and success

Turning Point
• Harvest Gold-distributors of Britannia and Modern

• Harvest Gold bread-demand for it

• Nirulas and overwhelming response

Size of the Indian Bread Industry

Unorganized sector Organized sector

• Contribution • Contribution
• Consisted • Consisted
• Total production • Total production
Packaging

• Highly perishable item

• Government norms

• Introduced transparent sheets

• Tangy dollops of plagiarism pervaded the bread market

Marketing
• Used funny tone and consumer understandable language

• The campaign

• The advertisement even made a dig at itself: "Bakwaas Advertising. First Class
Bread”

• Humor worked in this case because it used the lowest common denominator
Distribution
• Marketing system

• Harvest gold success and tough times

• Fast moving professional

• Various supply chain workshops

• Empty shelves- overall

Handling and logistics
• Harvest gold used trucks and tempos for transportation, and in case of smaller
deliveries to retail shops the producer uses small bicycles and tempos. Temperature
should be maintained in the tempos
• The Bhiwadi plant was the only plant and the product was distributed from there
• The products were loaded in trucks and unloaded at various depots in Delhi
• From the depots, the products were carried by the outsourced trucks to the various
corners of the city as per the demand of the customers
• The retailers of the suburbs in Delhi demanded 400 gms of the white bread the most
whereas the retailers in the posh localities like Vasant Vihar, Vasant Kunj, Greater
Kailash, Defence Colony, and demanded different variants of Harvest Gold bread
• The mode of revenue collection was cash on delivery from the retailers by these
outsourced truckmen.
• “PERFECT”
Competitors (1993) – manufacturing premium bread
• “MODERN FOODS”(1965) – 40% market share in India's market share
• The MFIL merged with HUL in 2006, which strengthen the manpower of HUL.
• HUL turned away from MFIL :-
1. lack quality standards
2. Does not have its own distribution channel
 The strategic move
• Grupo Bimbo is Mexico’s largest food and bakery company.
• Harvest gold sold its 65% of stake in Mexican based entity “Grupo Bimbo”.
• Being harvest gold’s high volume and low margin business it was not
possible to grow with the existing internal resources
• Harvest Gold was left with acquisition as the best strategic move
Issues and future Challenges
• Managing the distribution of fresh bread.
• Fulfilling the need for a good quality product involving low cost
techniques that the customers could trust
• As after acquisition they are left with limited choices
• It is estimated that due to time constraint, demand will increase as
bread products will give them more convenience.
Franchisee and contract manufacturing seems to be a good option.
Firstly, this will provide the advantage of localized production and
distribution
Secondly, throughout the year, proper planning of procurement of raw
materials (especially wheat) is required so that the firm is not subject to
seasonal price rise or artificial short supplies
Thirdly, as the company assumes quality to be its key competitive
advantage over the competitors, the focus of its promotional messages
has to be on the quality related attributes of the brand and not on silly
cartoons and comics