Mahashian Di Hatti Private Limited, infamously known as MDH is the second-largest player in the spices industry with a 12% market share next only to Everest. MDH currently operates 15 factories that together produce and sell 64 different kinds of spices. In the year 2020, the company reported a net income of Rs 420 crore. This brand is an interesting tale of how one man built an Rs. 2000 crore brand starting with scratch.
The Modest Beginnings
The story starts in 1919, when Mahashay Chunni Lal Gulati started a spice company in Sialkot, India (now in Pakistan). Post Partition, Chunni Lal along with their family migrated from Pakistan to India. His son Dharampal Gulati brought a “Tanga” with the money his father gave him. Eventually, he sold the Tanga and rented a shop in Delhi’s Chandni Chowk to sell spices. In 1959, he started his own factory which ultimately led to the formation of MDH Pvt. Ltd.
Organizing the unorganized sector
In those times, the packaged spices market in India was largely unorganized with housewives preferring to grind spices at home. The paradigm was such that even those who bought spices from outside wished to see them being grinded in front of their eyes. The major deterrent was convincing people to buy MDH packaged spices. This was a formidable challenge before Dharampal Gulati which needs to be addressed if he wants to expand his business.
Building the brand
Back in Sialkot, his father was once the biggest buyer of red chilies from the growers. Even in those days, there was a trader indulging in adulteration of red chili but Gulati’s were known for their honesty and zero adulteration policy. They were infamously called Mahashian di Hatti where Mahashian means ‘gentlemen’ or The shop of the Gentlemen!
Despite already having such a positive perception, Dharampal realized that word-of-mouth publicity would not be enough for selling his products. At this point, he formed a brand called MDH and himself became the brand ambassador. To reassure the public of the authenticity of the brand, he got his own face printed on every MDH product pack.
This strategy proved fruitful and demand increased. The packaged spice market was slowly opening up but this also meant fertile soil for competitors. Though many tried entering the market, the quality and purity of MDH stood the test of time and MDH was at forefront of the industry.
Today the company has a network of 1,000 stockists and 4 lakh, retailers. The company processes more than 30 tonnes of spices each day. The products of the company are not just popular in India but also in countries like the US, Canada, Japan, U.A.E, etc. The company also operates a state-of-the-art manufacturing unit in U.A.E. The company has a portfolio of 62 products available in more than 150 types of packaging to cater to different segments of consumers.
How packaging made a difference
In the 1950s, when everyone was selling spices in loose packets, MDH sold spices in cardboard boxes which was a much-needed differentiation in the cluttered spices industry. The challenge to create a niche in the Indian spices market seems to be solved. To enforce the promise of hygiene and non- adulteration, the photo of Dharampal Gulati was omnipresent on almost all products.
Dharampal Gulati: The men, The Brand, The Legend
Though a school dropout, the business acumen of this man was so strong that entire marketing activities of the organization were looked over by him personally. So much so, he never outsourced any marketing activity to an outside organization.
He believed that since he is the person behind the success of the brand, he is more suited than any other celebrity for endorsing the brand. His understanding of customer behavior was astonishing. In Indian culture, elders are respected for their wisdom and experience and this elderly touch in their marketing communications struck a chord with consumers.
Their tagline ‘Asli masala sach sach..MDH MDH’ became so popular that every form of their communication included it. The brand elements of MDH, be it the face of Dharampal or their tag line, resulted in a very high brand recall.
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Giving back to the society
MDH group was one of the very few companies doing CSR activities even before the Indian Laws made it mandatory. While most companies still do CSR activities but MDH has made a substantial shift from CSR to CSV (Creating Shared Value). The MDH group is guided by the philosophy “Give to the world the best you can, and the best will come back to you automatically”. He established a trust called Mahashay Chunilal Trust, after the name of his father. The trust runs hospitals, schools, and dispensaries for the poor. In fiscal 2017, Dharampal was the highest-paid consumer products CEO, when he took home a salary of Rupees 21 Crore. Interestingly, 90% of this was donated towards philanthropic activities. Even the Government of India has recognized the philanthropic activities of Dharampal Gulati and honored him with Padma Bhushan.
Was their Marketing Department Myopic?
There are no reservations about the fact that featuring Dharampal Gulati in every marketing communication by the company helped the brand gain high recall value. But the most pressing question remains that whether their marketing team failed to realize that human life is mortal and relied on one man only for decades for their marketing activities. Dharampal Gulati died at the age of 97 and even in his last days, he was featured in their advertisements. Their marketing department must be night oils to find a source to convey the marketing communications who is as credible as Dharampal Gulati.
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