Mr. Gopal Gupta (Chairman, Gopal Group) and Mr. Apoorv Gupta (managing Director, Gopal Corpco Ltd.) describe how they achieved success across the sectors with the support of their values, innovative strategies and farsightedness, in conversation with Ankit Singh and Surendra Maurya
Q. Share your story with us, starting right from your childhood days to your professional accomplishments.
A. Gopal: This company was established by my father in 1942 in a crowded area of old Delhi. After completion of my graduation in 1966, I joined the venture, and within three years, I took over the reins of business from my father. And, this all happened when I was just 23 years old.
Q. From being a tobacco venture to becoming multi-crore conglomerate, share legacy of the Gopal Group. Tell us about its victories that made it reach new heights.
A. Gopal: In 1969, there was just one tobacco brand BABA, which was manufactured for the elite class. I found a loophole in this strategy and soon, tasted success when I started developing my product for masses. They have different taste and preferences from the upper classes. I ensured my product was affordable for them by reducing my cost of production. We did a successful TV commercial with Govinda, and were the first brand to promote tobacco through TVCs in the late 1980s. Our hard work reaped results, and we faced no competition between 1969 and 1990 in the market. I am proud to state that we had a fruitful journey till date.
We tried to make our product a premium-quality and offering it at affordable price. We put less tax or lifestyle pressure on consumer while not compromising on quality and taste. We invested heavily in promotion. Unlike now, chewing tobacco was packaged in iron containers but we initiated the change by introducing pouch packaging. Going against the tide, GCL broke the tradition of adding silver in chewing tobacco as silver doesn’t have any taste or impact on tobacco but it was included by tobacco providers for nearly 70 years.
We have always looked for opportunities to reduce the price of our product, so that the maximum number of users can afford and consume it. These were the distinct steps taken by GCL. In addition, we also paved way for sachet packets available Rs. 1, 2 and 5. These innovations helped us in leading the
tobacco industry.
Q. After creating a mark with tobacco business, what inspired you to enter hospitality and power sectors? What challenges did you face in managing these businesses?
A. Gopal: Between 2005 and 2008, I came across opportunities pertaining to hospitality and power businesses. The real estate industry was booming and I intended to coin this rise by investing in this industry. This happened when I bought a hotel that was under construction. This was a good experience for the company and encouraged me to further create my mark in tourist towns and cities, like Shimla, Goa and Mussoorie.
A party was setting up a power project but they could not complete it. They offered me to buy it. We faced a lot of challenges and losses while constructing 5MW project. We lost 40 crore, and had to change our team twice. Fortunately, I constructed this 5MW plant in Suman Sarwari, Kullu. Receiving success after facing challenges gave us immense experience and exposure to face another.
Giving back to the society, we took several steps to improve the conditions of villages located in vicinity of power plant. In addition to providing schooling to children, we ensured villagers received medical facility at free of cost. We have a tie-up with AIIMS, ensuring cancer patients gets free treatment and medicines till the time they get well or are alive. Some of the patients have been treated for 6-8years. Upholding our cause high, some pharmaceutical companies gave us discount of up to 50 per cent on medicines as well.
Apoorv: Today, GCL stands for its commitment – what GCL starts, it completes it as well. After completing our first power project, people started offering us new power projects to establish. Now, we are all set to construct power plants with capacity of 50MW within three years. Next year, we will start working on our 25MW project.
Q. Entering the arena of FMCG with the launch of Tat-O chips, what strategies would you invest in to break the clutter of competition?
A. Gopal: My Tat-O product is for the families. I applied two strategies to compete in the market. First, using children’s favorite cartoon character ‘Chota Bheem’, so that my product can easily gain entry into houses, creating awareness about my product. Now, entire family consumes my products. Secondly, I pioneered new products in the market to capture more market share.
Apoorv: When we entered into the sector, there were regular flavors available in the market, like tomato, salted, plain, and masala. My plan was to launch new flavors, like pudina, chatkila, cheese, along healthy variants for health-conscious consumers. This helped us in creating a niche for ourselves. Our idea was to offer new taste to end-users and open more avenues for growth.
In Himachal Pradesh, the government has banned the use of plastic bags, and we are the first and only company to launch paper bags in the state.
Q. You have led the group on to a path of diversification, what opportunities did you see while foraying into new markets and how did you capitalise on them?
A. Gopal: The food sector grows 30 per cent every year. When you start selling your product with 30 per cent growth, you will definitely come across some opportunities in the market.
Apoorv: We were already working in the confectionary segment and introduced mouth fresheners like Gopal Elaichi. We are coming up with Dil Cool, which is based on chhuhara. We will use modern and statistical approach to promote new products in the market. In future, we have plans to enter the domain of supermarket and grocery stores. We intend to provide our consumers with numerous varieties that will encourage them to buy our products.
Q. How important is the role of HR in an organisation’s growth?
A. Gopal: HR is the backbone of the company and plays an important role in its growth. Initially, the Gopal Group was a family business. Today, we are giving it a corporate look with name Gopal Corpco Ltd. (GCL) and have started hiring professionals with varied experience. The HR division of our company is an independent department. Heads of different departments don’t have to wait for the permission of chairman to take decisions. Being a businessman, I can’t think beyond a point. Packed with new ideas, it is entirely their responsibility to take the right decision to stir the company ahead.
Apoorv: The environment of employment has changed drastically. We cant grow in isolation, we have to involve our employees in our growth. Apart from giving them facilities, we need to motivate them from time to time.
Q. Brief us about the group’s innovative HR policies.
A. Apoorv: We need to give power to employees so that they perform and get rewarded. If you are not performing in the market then you will be de-motivated as well. So, in both ways it is a give-and-take relationship. If I have six people working with me, I’ll give them authority to find distributions. They have to give their best and then review their incentive plans. But, first give me results, then we’ll talk about something else. It is same for every department. My strategy is first perform then get rewarded. In every company, we need a reward system for employees, stakeholders and retailers. It could be a certificate or some other benefits so that they can be motivated all the time. I think, these HR initiatives will definitely help us in the future.
Gopal: In our HR policies, employee engagement plays vital role. We ensure employees are involved in every activity through their performance. To benefit our company’s personnel, we offer them leave and encashment policy. If an employee has met with an accident, we provide them monetary help as well. We feel, if our employees are satisfied and happy, it will ultimately impact our customers in a positive way and this will further influence my organisation’s performance.
Q. As the brand defines its future roadmap, what milestones can we look forward to?
A. Apoorv: We already have etched our indelible mark in the tobacco industry. The next big thing for us is food. Today we are entrants in the food industry. Going forward, the vision of the company is to be known as the leading player in the sector in the next five years. Secondly after launching new products, we intend to ensure that people recognise our brand. Another milestone will be to expand our production capacity. Today, we have a factory in Himachal Predesh; in future, we plan to have a bigger production factory to increase our production capacity. Next goal is to have a pan-India presence within three years. When we would capture domestic market, we will take a step ahead to go beyond the boundaries. Our next aim is to diversify internally and externally. Search is on for a business investment option in Kolkata.
Gopal: Apoorv expects minimum 300 cr turnover in the next 3-4 years. Next year, we will enter in the confectionary segment, and five years down the line, our milestone will be 500 cr. In power, we are constructing small projects and with time, will add more projects to the systems that range between 10 and 15MW. We plan to set up 150 MW plants in 10 years and this will require an investment of 1,000 cr. We will follow same strategy in the food industry as well.
Q. Passing the baton to the younger generation, what advice did you share with your son Apoorv Gupta to manage this group as successfully
as you?
A. Gopal: Always remember, consumer is our god. While working honestly, we need to focus on the needs, affordability and cost impact of our end-users. You would be surprise to know that I am the highest and 100 per cent tax payer in the tobacco industry. I feel, money has limited use. Once, you have earned the money you require, and then next task will be to serve your consumers and employees. I am fortunate to have employees who have been working with GCL for 30-40years and their children are also working with us.
Q. What is your leadership style? Who inspires you to go extra mile to achieve your objectives?
A. Gopal: Leadership is not external; it has to be an internal part of the company. It is important to discuss problems with your employees. I have never shouted on any employee at the office. We are not god. We all make mistakes, but we all work together to solve the issues.
Apoorv: Leadership style is all about how you make your team work, and how effective it is. I have been a part of the retail market and have to remember that when I am sitting with my team. If they are accountable to me, then so I am to them. I try to give them power to perform. You always have to be on your toes in the retail business. It is very essential to motivate your employee from time to time. In addition, unity within the organisation helps it in scaling new heights.
Q. Any advice for the budding entrepreneurs of the country?
A. Gopal: Whatever you do, do it with honesty and focus. It not just about earning money; value creation for the company, dedication, hard work, and team work will help you set benchmarks in the industry. You can’t achieve success without believing that your consumer is king. You might make money in a short span of time, but your success will not last. If you focus on the consumers’ needs then no one will be able to replace you in the market.
