Book review: Broke to Breakthrough

Priyatosh Kumar of Fujifilm reviews Broke to Breakthrough: The Rise of India's Largest Private Dairy Company by Harish Damodaran

17 Dec 2021 | By PrintWeek Team

The story of a push cart ice cream vendor, going on to build India’s largest private sector dairy company is replete with risks, passion, aspiration and a sound strategy. However, what comes out evidently in Harish Damodaran’s Broke to Breakthrough is an indigenous spirit of the local Indian entrepreneurship — the fragrance that is all-pervasive. To quote the famous essayist of our times, Nassim Nicholas Taleb, “In academia, there is no difference between academia and real world. In the real world, there is.”

People like RG Chandramogan are the men of the real world whose immense value creation has brought in a revolution in not just their business but also society.

The structure of the book has predictable leanings of starting small then building the blocks, relearning and unlearning in course of the journey and quickly course correct where required. Any story of an underdog who started with a meagre capital of Rs 13,000 to build what is today a Rs 5,400-crore enterprise will always attract attention but what appeals to the readers is the simplicity of the story, the overcoming of the stumbling blocks that come in the way of every business and the value that finally gets created.

Chandramogan’s entrepreneurial journey starts in 1970 with three employees and 15 pushcarts and a meagre capital, selling stick and cup ice candies with a brand name of Arun. He then progressed to selling genuine milk-based ice creams in different flavors and varieties in early 1980s, finally moving into liquid milk marketing in 1995.

In the course of this journey, you can find many incumbent business strategies getting challenged.

While most companies focus on bigger markets with larger populations, Arun Ice-cream tapped into smaller towns and urban centers outside of Chennai, addressing the aspirational customer segment. His need for volumes made Chandramogan dabble into institutional sales rather than retail sales. which gave him his first large order which kept the company in good stead.

His was one of the companies that eliminated middlemen in milk procurement, where sourcing was done directly from farmers, paying them in time through electronic transfer (when it was not very prevalent), and it helped the entire value chain. He also implemented the efficient use of modern technology of chilling milk at source and moving in refrigerated trucks to maintain cold chain integrity.

In Chandramogan’s words, the company’s success hinges on three factors. One, differentiated products, two, thriftiness and focus (very early in life, his grandmother gave him a lesson on the value of a drop of water) and finally, creating economic moats to gain competitive advantage. Brand building plays a big part there, like any big FMCG company.

Finally, the role of serendipity, which is a reality of every business, has been well captured in the book. The move from value (ice creams) to volume (dairy business) to adding high value (premium sit and eat retail ice creams) makes for an interesting read.

In the times of unicorns and IPOs, where wealth gets created in a short span of time, RG Chandramogan’s business took 18 years to clock the Rs 1-crore mark, 13 years to cross Rs 100-crore mark, then eight years for Rs 1,000-crore, four years for Rs 2,000-crores and another four for Rs 4000-crore and three years for Rs 5,000-crores. That’s a big lesson in scale and strategy, largely driven by investments in production capacity and brand building. The book throws light on the entire business transformation in detailed manner with painstaking research. For this, the credit is due to the author Harish Damodaran.

Finally, HAP’s success is a story of the triumph of capitalism. Where lakhs of people get employed, farmers get the right prices and the entire belt of Tamil Nadu gained from this entrepreneurial initiative. The dairy business in India sees all types of companies thrive and do well. While HAP is the largest private sector dairy company, Amul is the largest cooperative, processing millions of liters of milk daily and so is Nestle India, a multinational that is extremely successful in India. A lesson that companies can compete and cohabitate. And a lesson in privatisation of Agriculture. 

Book: Broke to Breakthrough: The Rise of India's Largest Private Dairy Company

Author: Harish Damodaran

Publisher: Penguin Viking  

Pages: 224 

Price: 699

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