Marketing

Hatching the Keggs

Chitra Narayanan | Updated on January 12, 2011

Mr Vinod Kapur, Chairman Keggs Farm. - Photo by Ramesh Sharma   -  BusinessLine

How Vinod Kapur made the faceless egg a branded, packaged item!

Don't ask for eggs, but ask for Keggs.' This tagline was hatched back in the mid-1960s. But it was only 40 years later, in 2005-06, that Vinod Kapur actually began selling branded eggs. With Keggs eggs now a recognisable brand — at least in North India — Kapur's dream of making the commodity item move like a packaged and labelled FMCG product has finally come true.

Back in the 1960s, when Kapur was progressing very rapidly in his MNC job — he was already the country head of matchstick major Wimco (then owned by Swedish Match) — his dream of entering poultry farming appeared like an idealist's whimsy. Especially considering that he knew nothing about the business and the primary motivation was that he loved eating eggs for breakfast! He and his wife would sit and talk about what they would call their business, until they came up with the name Keggs (Kapur + eggs = Keggs) and the famous tagline. The egg literally came before the chicken in Kapur's case!

Now that he sells 6-7 crore of the premium Keggs eggs annually and demand is picking up faster than he can meet supply, and the other side of his business — the rural poultry programme — has become a model case study, the 76-year-old Kapur can afford to sit back and smile proudly.

“Suddenly, my whole value has changed in society. Earlier, when I met people at Delhi's parties and said I was into poultry farming, they would look strangely at me, but now they seek me out as the man behind Keggs,” says Kapur.

‘Happy eggs'

That's what a good strong brand does for your own equity, he says, as he describes the Keggs eggs' attributes of high quality and trust, built painstakingly through word-of-mouth and usage. No advertising at all. The tan-coloured eggs, which are slightly larger than the normal commercial ones, come from cage-free birds raised in humane conditions, reared on near-organic feed with no growth promoters. “Happy birds lay happy eggs”, is Kapur's ruling motto.

Packed in batches of six in green eco-friendly boxes, the Keggs eggs are priced at Rs 50 as opposed to Rs 25 for the other eggs in the market. Each Keggs egg carries a hologram to prevent counterfeiting — necessary now, as they have spawned copy-cat products.

If a product is good — especially a food product — it will speak for itself and need no advertising,” says Kapur, describing how chefs from the premium Four Seasons Hotel in Mumbai came knocking at his farm in Gurgaon, asking for a daily supply of Keggs eggs. “At that time, my distribution was restricted to the NCR and I told them there was no way I could reach the eggs to Mumbai, but they were willing to fly them out every day,” he says.

Today, Keggs eggs not only reach 500 retail outlets in Delhi/NCR but have also managed to penetrate Chandigarh, Lucknow, Kolkata and Mumbai. “Every day a man from Keggs farms boards the Rajdhani to deliver the eggs in person to select stores in Mumbai, ensuring freshness,” says Kapur.

This year, he says, “we have peaked at 6.5 lakh eggs per month, while the demand for our eggs stands at 7 lakh .” Next year, Kapur's intention is to take the production of branded eggs to 9 lakh.

Diversified business

Of course, branded eggs are only a small part of Kapur's business. From breeding to vaccines to feed, the group addresses all the niches in the poultry business.

In the last 40 years, Kapur has had to keep rejigging his business model to keep pace with the changing economic realities, from the Socialist era to liberalisation to the competitive consumption era. Along the way, he has had to take some calculated risks, especially when he changed from conventional poultry to a radically different model. “I lost a lot of money in re-engineering the business — but luckily for me the poultry vaccines business (Indovax) made up for Keggfarms' deficit so I could afford to keep on at my experiment,” he says.

Today, Kapur's rural poultry experiment touches a million below-poverty-line families, and has aroused interest in the UN and other development circles, with the model now being replicated in Africa. “Today, I feed both the bottom of the pyramid and the top,” says Kapur.

From 1967, when he set up, till 1991, Kapur went about his business more or less dictated by the conventional wisdom — though he claims to have had his share of differences with B. V. Rao, the big daddy of Indian poultry and the man behind Venkateshwara Hatcheries, on the issue of importing poultry stock rather than creating our own desi poultry lines. Kapur claims to be the pioneer in creating indigenous poultry lines and not depending on US stock.

But it was only in 1991 when the first wave of liberalisation was shaking India that Kapur was faced with a major decision - to sell out or to hold on. “I must confess I was seriously tempted,” he confesses. But finally, he decided to stay on, and drastically change the model. At a time when everybody was going into the industrialised route of production, Kapur decided to go backwards and adopt the village model of cage-free birds. Describing the risk, he says, “I just jumped off the cliff. Everybody thought I had gone crazy.”

The model was simple as Kapur explains in his travels into the interiors, he found that it was the women who raised hens in villages. If only he could give them an acceptable desi-looking scavenging breed but with a far better yield! Some smart genetic engineering resulted in the dual-purpose Kuroiler breed that could produce far more meat and eggs (200 as against the 40 that the village hen used to lay) and yet survive in Indian villages in free-ranging conditions.

The common thread in the rural model and the high-end premium branded model he created, says Kapur, is that he found a gap and stepped neatly into it. “As somebody who enjoys eating good eggs, I knew there was space for truly high quality variety eggs and thinking that there was a market for such a product, I started to work on it.”

The Kensington Golden variant — again a breed that Kapur's company created — gets a diet of maize, spinach and lots of greens. The result: it lays 250 eggs during its cycle that are not only larger than normal eggs but have a rich golden yolk.

Kapur innovated on the distribution model as well. Typically, eggs move the commodity cycle route — they are sold to middle-men who, in turn, sell to retailers and by the time it reaches the shops, they are 10 days old.

“Ninety-nine per cent of commercial egg production is traceless and without freshness,” says Kapur.

At the Kegg farms no egg is stored for more than three days and if eggs go unsold in the shops for 10 days, they take them back. “You can't get fresher eggs than that,” he says.

Riding on the popularity of his Keggs brand, Kapur says he is building a foods division. “The long-range plan is to move beyond eggs. I have some ideas and will only launch products that are very exceptional and fall into the consumption pattern of existing consumers,” he says.

Finally, how does Kapur himself likes his eggs? “I am a fried egg man or like it boiled the classic four-and-a-half minutes,” he says.

Published on January 12, 2011

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