Mumbai: India’s highest paid consumer product CEO is not a man known to grace magazine covers. But he is visually familiar to a vast swathe of the population. The 94-year-old Dharampal Gulati is the sprightly old man with a turban promoting masala brand MDH on television commercials and on every packs.
The fifth grade school dropout took home more than Rs 21 crore as salary last fiscal+ , higher than Adi Godrej and Vivek Gambhir of Godrej Consumer, Sanjiv Mehta of Hindustan Unilever and ITC’s YC Deveshwar. His company Mahashian Di Hatti, popularly known as MDH, posted a 15% jump in revenues to Rs 924 crore with a 24% increase in net profit at Rs 213 crore.
Gulati, who is also called Dadaji or Mahashayji, is the man who diligently makes his daily round of factories, markets and dealers including on Sundays until he is satisfied everything is in order in the company where he holds 80% stake.
“My motivation to work is being sincere in product quality sold at affordable prices. And nearly 90% of my salary goes to charity in my personal capacity,” said Gulati, the second-generation entrepreneur who joined MDH nearly 60 years ago.
What his father Chuni Lal started as a small shop in Sialkot, Pakistan, way back in 1919 is now a Rs 1500 crore empire which runs the masala company, about 20 schools and a hospital. After the partition of the country, Gulati moved to a shop in Karol Bagh in Delhi and has since opened 15 factories supplying 1000 dealers in India.
MDH has offices in Dubai and London and exports to about 100 countries. His son manages the overall operations now and six daughters handle distribution region wise.
The company attributes its success to its supply-chain – from contract farming and sourcing spices from Karnataka and Rajasthan to Afghanistan and Iran. But the segment has been attracting newer players.
S Narendrakumar, who owns Everest brand, is the market leader with 13% share followed by MDH with 12% share, according to Euromonitor. Sales of sauces, dressings and condiments grew 16% to reach Rs 13,200 crore in 2016, as urbanization sees consumers increasingly switching from unpackaged to packaged variants.
Within masala, herbs and spices, domestic players including DS Foods, Ramdev and Eastern retain the upper hand in India, unlike table sauces where international players, like Nestle and Hindustan Unilever are strong due to their focus on international cuisines. In addition, Kerala-based Keya, Baba Ramdev’s Patanjali, and Mother’s Recipe have also ramped up their portfolio with spices in convenient and ready-to-use packaging.
“Entering exports market is easier than launching within India as masala composition changes depending on local communities taste and region even as the basic ingredient remains the same. That’s a huge challenge,” Future Group’s FMCG president Devendra Chawla said. “Also there aren’t enough options Indian companies offer new age consumers and global cuisine such as Chinese, Thai or Italian.”
MDH, that has more than 60 products, gets a bulk of its sales from three variants – Deggi Mirch, Chat Masala and Chana Masala – each selling roughly a crore packets every month. But global cuisine is not a focus yet.
“There is scope to widen the Indian spices market and converting consumers from unbranded products,” said Rajinder Kumar, executive vice-president at MDH.
“We dictate the prices in the market as rivals follow us to make their pricing strategy. Since we want to keep our business low margin, it helps the overall category grow due to affordability.”