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From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses

The younger generations of family businesses are expanding into new markets, while introducing innovative technology and marketing ideas

Published: Sep 11, 2023 10:37:31 AM IST
Updated: Sep 11, 2023 03:55:04 PM IST

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses(Clockwise) The Desais of Wagh Bakri; Aakanksha Gandhi of the Vadilal Group; The Shahs of Symphony Fabrics; The Mehtas of Aava Water

Gujarat is full of family businesses that were founded over 100 years ago, when priorities, approach towards innovation and business models were very different. With the country’s evolving landscape came new opportunities and challenges, thus changing the game for every generation. But what has remained constant with most family businesses is the core value system.

“The next generation’s role is that of renewal and to be the voice of the new generation, modern customers and competition. We believe they understand the legacy because they are family, but they can be change agents to make sure the family enterprises continue being successful,” says Rajan Vasa, office managing partner, Gujarat, KPMG in India.

The challenge for the next generation has been to find the right balance between sticking to the core values while still implementing much-needed changes to create value for their business. Forbes India looks at some Ahmedabad-based next generation entrepreneurs

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses (From left) Priyam, Parag, Rasesh and Paras Desai have expanded their brand slowly and steadily

Wagh Bakri: Carrying on the 131-year-old legacy

By Naandika Tripathi

For more than a century, Wagh Bakri has been in the sole business of selling tea. The company dates back to 1892, when first-generation entrepreneur Narandas Desai started it by leasing 500 acres of tea estate in Durban, South Africa, only to come back to India in 1915 after facing racial discrimination. “Today we are the largest family-run packaged tea business in the world,” says Parag Desai over a cup of Darjeeling tea. The main operations of the 131-year-old business are managed by Parag, Paras, and Priyam, the fourth and fifth generations of the family. Veterans Rasesh and Piyush, from the third generation, have taken a back seat and mostly look after corporate social responsibility (CSR).

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businessesAfter pursuing his master’s degree from New York’s Long Island University, Parag joined the business in 1995, when it was less than Rs 100 crore. “Our revenue is more than Rs 2,000 crore now.” He took charge of expanding the business outside Ahmedabad and introduced the ecommerce platform buytea.com 20 years ago. The brand has a presence across 24 states in India, exports to over 60 countries, and sold 48 million kg of tea last year. It took the approach of expanding slowly and steadily. For instance, after spending a good 10 years in Rajasthan and Madhya Pradesh, the brand moved to Maharashtra and Delhi. The main concern was to test the waters and develop a robust distribution network.

“I don’t know how good or bad that is, but it has worked for us because our needs are also limited. The business has been growing well,” says the 48-year-old executive director. Parag and Paras look after product innovation, growing their brand awareness, ecommerce, and international business.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses

Crediting the earlier generation, Parag acknowledges having had the freedom to run the business and introduce changes. From foraying into newer regions to launching the first tea café, “our decisions were never questioned as long as we took complete accountability for success and failure”. The unlisted brand runs over 70 tea lounges and tea worlds across India. The third-largest packaged tea company in India after Tata and HUL, it is also looking to expand in the eastern region. Parag also credits their professionals for running the brand smoothly. “For the last 20 years, we have been a family-owned but professionally run company.”

Strong value mechanisms, ethics and morality are some of the values carried forward by all the generations till now. “We hope our kids pick up this from where we left it and take it ahead,” says Parag.

Also read: From Vikram Sarabhai to BV Doshi: People who shaped Ahmedabad - Part 1 

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businessesFourth gen at Vadilal Group Aakanksha Gandhi is in charge of marketing and brand efforts nationwide

Vadilal: Reinventing a 100-year-old brand for Gen Z 

By Naini Thaker

Growing up, Aakanksha Gandhi’s dinner table conversations only revolved around the ice cream industry and the day-to-day challenges her father faced at work. “It was always my dream to eventually work with the family business,” says Gandhi, the fourth generation to have joined the family business, as president-branding and parlours at Vadilal Enterprises.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businessesThe company dates back to 1907. From a fountain soda shop in Ahmedabad to making traditional kothi-based ice cream (using a hand-operated machine to churn milk with other ingredients), Vadilal is one of the most popular ice cream brands nationally.

Ranchod Lal Gandhi set up a small retail outlet in 1926. After its flagship cassata ice cream was introduced in the 1950s, there was no looking back. By the 1970s, Vadilal was a household name, with eight to 10 outlets in Ahmedabad and the third generation; this was when Ramchandra and Lakshman Gandhi had joined the business. By 1989 the company became a listed entity.

Since then, the business has grown manifold. After some reported tiffs within the family, the business is being led by Ramchandra’s son Rajesh and Lakshman’s son Devanshu.

The new generation is trying to bring in a lot more innovation while keeping the family’s core values intact. Vadilal has two separate entities: Vadilal Industries, which looks at manufacturing, and Vadilal Enterprises, which is in charge of marketing and distribution. Devanshu’s daughter Aakanksha joined the business in 2018, and is in charge of marketing and branding efforts nationwide.

“Being in a generational family business, there is always an opportunity to add value to the legacy. Since becoming part of the brand, my primary goal has been to ensure continued relevance among the Gen Z and Gen Alpha demographics,” she says. The 26-year-old has been spearheading efforts to elevate Vadilal’s presence in the ecommerce landscape and has been collaborating with influencers. “All of this has been achieved while maintaining a delicate balance with the company’s existing values.”

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses

A year ago, she spearheaded the launch of a dessert café, Vadilal Now For Ever. “The idea behind this was to connect with the young generation, to build lifelong loyalty,” she adds. Even the standalone ice cream parlours, Vadilal Scoop Shops, have expanded to 30 locations across Gujarat, and four locations in Delhi. Vadilal is gearing up for a franchise-based, pan-India launch soon. The manufacturing business clocked in a net revenue of operations of Rs 896 crore, whereas the marketing and distribution business’s net revenue was Rs 930 crore in FY23.

With a lot more innovation on the marketing and branding side, Aakansha is all geared up to transform Vadilal. But how different is her leadership style? “I don’t want to change the core essence of the corporate culture that has been built over the years. But, we are encouraging a more democratic style of leadership, allowing more opportunities to engage with team members and value their insights,” she says.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses(From left) Father and son duo Jigesh and Abhishek Shah have been working on introducing newer fabrics, including hemp, bamboo and hemp corduroys

Symphony Fabrics: Betting big on sustainable textiles

By Naini Thaker

After studying textile materials technology in the US, Abhishek Shah wanted to return to India to diversify his 80-year-old family textiles business. Given that he studied biomaterials and sustainability, he suggested focussing on sustainable textiles. Along with his father Jigesh Shah, they launched Symphony Fabrics.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businessesAround 2017, sustainability wasn’t a new concept, but sustainable textiles were still at a relatively nascent stage in the Indian market. “We started R&D for hemp fabrics, and invested more than Rs 40 lakh in it. It was very difficult to run hemp on the looms,” says Shah. The existing business has been manufacturing corduroys for massive industry players such as BVM, Arvind, M&S and other export houses for years.

The 29-year-old is working closely with his father on introducing newer fabrics, including hemp, bamboo, hemp corduroys and more. The father-son duo has also started catering to many new industries, including medical, technical textiles and tyre cord fabrics.

But before joining the family business, was there never a thought to set up a startup? Shah says, “Textiles are in my blood. I was always certain of two things: Working in the field of textiles and expanding the family business.”

‘Quality over quantity’ has been a core value in the family, and Shah has ensured he sticks by it. Earlier the business only catered to large multinationals. “Now, when we produce any of our fabrics, we keep a few extra metres in stock. This allows us to not only cater to MNCs, but also startups and mid-size companies across the globe at a short notice,” says Shah.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses

Earlier the business was very India-focussed. With Shah’s entry, he started focussing on digital marketing, “We started participating in trade shows across the globe, which allowed us to connect with international brands directly. We are working with many of them directly now, without any agent presence… this has helped grow our revenue as well,” he says. This strategy also allows them to offer better prices to customers. “For instance, at a recent trade show in the UK, our competitors were selling hemp fabrics at significantly higher rates, and we were offering better quality and rates,” he adds. This has been a game-changer for the company. Currently, Symphony Fabrics exports to about 14 to 15 countries, across sectors. Being a textile engineer has helped too. “Often customers reach out to us, wanting to custom-make certain fabrics. We ask them to send across a swatch, and then we reverse engineer and create the fabric as per their requirement,” he says.

Shah soon plans to launch a new gifting and lifestyle brand called ‘SUMORE’. “We are hoping to sell HEMP-Bamboo bed linens, tote bags, table runners and more—all made using our fabrics—for gifting. Our products will range from Rs 500 to Rs 10,000,” says Shah. Symphony Fabrics is hoping to make the most of the large margins that can be made by selling products directly, while still keeping the B2B business as the core. Apart from diversification plans, the company is investing heavily in adding more machinery to increase their monthly capacity from 200,000 metres a month to 3 lakh metres a month. Going forward, the company hopes to find strategic partners and investors in India and across the globe to expand their offices and presence globally.

Also read: Ahmedabad: Family business destination to startup hub

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses(From left) Behram, Shiroy and (seated) Avanti Mehta, have divided their duties at Aava Water

Aava Water: Working together to step up their B2C game

By Naandika Tripathi

Inside Ahmedabad’s cantonment area in Hansol is a 50-acre campus, where, 63-year-old Behram Mehta points out, “We inaugurated Aava Water in 2005. Every element illustrated on our labels is from this protected ecosystem, which is home to thousands of indigenous flora and fauna.” In the cluttered sector of packaged drinking water in India, Aava claims to offer water in its natural state, without any artificial processes. It is also western India’s first brand to sell natural mineral water that originates in the Aravallis, the world’s oldest mountain range.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businessesAava Water, which is run by two generations, has been focussed on its B2B business and is now aggressively expanding its B2C reach. “When I joined in 2011, we were a completely different outfit, with 90 percent of our sales coming from B2B clients like Jet Airways, Air India, Four Seasons and so on, with a heavy dependence on a few clients,” says Shiroy (33), Behram’s son. After taking a call to change the client mix, 50 percent of the business is now generated from B2C.

While Shiroy looks at operations and logistics, his younger sister Avanti (30) wears the hat of brand manager and creative director. When it comes to strategy, legality, and firefighting, Behram takes the lead. “We as a family have divided our duties, which enables growth and synergy. I still supervise quality, taste, testing, laboratories, and manufacturing processes, among other responsibilities,” says Behram.

Around 90 percent of the business is in the domestic market, with only 10 percent coming from exports through airlines and flight kitchens. “We see exports playing a significant part in our growth over the next three to four years, beginning January 2024,” says Shiroy.

When different generations of the family run a business, there are bound to be clashes of opinions. “Differences are inevitable. But they don’t hold us down in any way. Even if it’s a disagreement, it’s voiced, discussed, and put to an end,” says Avanti, who joined the business in 2019 and is also India’s youngest water sommelier.

From Wagh Bakri to Vadilal: How Gujarat's next-gen is reshaping family businesses

Within the natural mineral water space, Aava has been on top, claims Shiroy. The Ahmedabad-based company manufactures, distributes, and sells more than 4 lakh PET and glass bottles a day. The price of Aava Water is higher than other market players’, which makes it a premium product.

Post-Covid 19, the company has seen an upward growth trajectory and is growing 30 percent year-on-year. The natural mineral water brand is currently valued at Rs 1,000 crore. The brand is now focusing on building a basket of products, which includes sparkling water and some unique beverages, which will give them an entry into the retail segment.

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