Tour rural Punjab and you can see the top-loading washing machine being used to churn out litres of lassi – a usage of the appliance that makes the world laugh and also marvel at our jugaad .

But visit Gutersloh, a tiny town in the North Rhine Westphalia region of Germany, which is the headquarters of domestic appliances company Miele, and the Punjabi farmer's lassi innovation no longer appears funny. For here, at the Miele appliance museum you see how the washing machine of today actually started its life as a butter churn over a hundred years ago.

“When Miele was founded in 1899 by my great-grandfather Carl Miele and Reinhard Zinkann, their first idea was to improve the butter churn,” says Markus Miele, managing director and co-proprietor of the €3-billion family-owned company. (The Miele family owns 51 per cent stake while the Zinkann family owns 49 per cent.)

“He was working on a farm and saw how the butter churn was always breaking down. He had a technical mind and started working on how to improve the gadget,” describes Miele. Teaming up with Zinkann, who had a shrewd marketing brain, he formed a company that produced and sold superior-quality butter churns.

But just two years after Miele was set up, seeing how the butter churn tub resembled a washing tub, they converted it into a gadget that could wash clothes.

Since 1901, Miele has been producing washing machines without a break, and in Germany, where the penetration of the appliance is over 90 per cent (by comparison barely 13 per cent Indian homes use washing machines), the company is today synonymous with caring for clothes, even though it diversified its product lines into many other areas. It's also a mass brand in Germany. Globally, though, Miele's positioning is as a luxury brand that produces very high-end built-in kitchen appliances.

Indeed, as Miele points out, as a percentage of turnover, the washing and drying appliances business contributes only 40 per cent, built-in products (kitchen appliances such as dishwashers, coffee makers, wine coolers, refrigerators) contribute 40 per cent, services 10 per cent and a fast growing new line is Professional (large commercial washing and cleaning units for hospitals, hotels, restaurants, camping grounds and so on). In India, Fortis is a major new client for the professional business.

Miele's inheritance

The washing machine legacy is not the only enduring inheritance from the early 1900s for 43-year old Markus, who joined the family enterprise after a degree in industrial engineering, a PhD in organisational transformation from Switzerland, and an apprenticeship with auto parts manufacturing company Hella. (“I actually applied and was interviewed for the job at Miele and had to write an essay on why I wanted to join the company,” he claims.)

The first marketing tag line used to sell Miele products – Forever Better – still endures (though in the era of innovation the tagline the company says could be ‘Forever Different'.)

And so does the dream of making Miele a well-known global player. “Way back in 1912, my great-grandfather had a vision of making Miele an international brand,” says Markus Miele, describing why the company was so quick to move out of its original home of Herzebrock to more industrial Gutersloh, which was on the railway track. “Even at that time they had a farsighted vision of wagons carting Miele products to faraway shores,” says Miele.

Today, just 30 per cent of Miele's business is domestic, and 70 per cent is exports. So getting the global strategy right is very important for the company.

That's why every year the company flies in to Gutersloh all the managing directors from the 47 other countries that Miele is today present in for a high-powered powwow. There are both formal and informal sessions where the new product lines for each country are decided, future targets set, and strategies discussed. One of the highlights of this mega get-together of global heads is a walk into the neighbouring woods. Sometimes ideas for new product innovations germinate during these sessions.

Take Greece, for instance, where the ovens were being used to make oily dishes such as moussaka – the engineers developed a special coating for the ovens meant for that country.

Growing like the human body

In a hundred years, the country has reached about 50 countries – roughly a country every two years, but that's the pace that Miele is comfortable with.

“I always say a business should grow like the human body. There has to be growth always, but not too fast. If the cells grow too fast, then it's like cancer and not good,” says Miele.

Which is why, he says, the company has adamantly refused to be financed for its expansions, using wholly internal funds. “We don't have any bank debt, and always like to take it step by step.”

Before the War, he points out, it was only exporting to Switzerland. After that came the real growth as Miele products started going out to neighbouring European nations. “In the Seventies, we looked to Australia, then the '80s was the turn of North America, and then since the '90s, we have been focusing on Asia,” he says.

Miele India was set up three years ago, and Malaysia is the latest addition to the Miele family with a small subsidiary. “Brazil is our next target,” says Miele, pointing out how emerging economies are where the big growth is coming from – although home Germany has been delivering surprising growth as well.

“Once you open in a country, you need to also keep feeding their wish list, and the wish lists are getting longer and longer,” jokes Miele.

Miele's India Outing

Why the luxury positioning in India? Is India ready for it? There is a German saying “Once seeing is better than hundred times reading,” says Miele.

And so although he had read up enough about the attractiveness of the Indian market, he arrived here to see for himself about four years ago.

What he saw on Delhi and Mumbai's roads – the number of German cars – convinced him about the rightness of launching here. “If you can afford our Audis and BMWs, then there is enough money in the country to buy Miele products,” he says.

Talking to trade in India helped Miele firm up its product line for the country – there were already German kitchen manufacturers present with whom Miele had a relationship. (One of the product lines that Miele entered and exited was building kitchens since many of the kitchen makers who bought Miele appliances felt threatened.) “The modern kitchen with built-in appliances was invented in Germany,” claims Miele, pointing out one of the reasons why globally the country's brands are sought after. The other is the sleek European design.

Miele's own growth story has come from the kitchen line (over the years it has entered and exited many businesses - including bicycles, bikes, cars (it made 146 cars - and one vintage model is still preserved in its museum, discovered and brought back to Gutersloh with great effort). “We grew with our other products - hoods, hobs, ovens,” says Miele.

Setting and Service

In India, while setting up shop, Miele followed the model it had adopted in Singapore, which was to put the “right service” and “setting” in place. “One wrong brick is enough to pull down a wall,” he says, pointing out how good service is so important to keeping the brand image.

So he points to how in India, much like Singapore where stewardesses from Singapore Airlines were hired to showcase products at the Miele experience centre, in Delhi too former Jet Airways air hostesses who had the requisite soft skills were hired. “That has paid us rich dividends,” says Dhananjay Chaturvedi, managing director, Miele India pointing to the annual three-digit growth in the country.

Miele says he is fascinated to see how despite the cultural differences, the built-in kitchens – so much more suitable to dry cooking – is being lapped up in India. “What we see in Asia is the emergence of the wet and dry kitchen (the butler's pantry backdoor where the messy cooking takes place and the show-off kitchen up front where things are just mixed and served).”

What about the current economic climate in India? The various restrictions in retailing – aren't they discouraging and frustrating?

Miele points to their stint in South Africa, where through the turbulent years post-apartheid the company resolutely stuck on. “You can always gain new ideas from restrictions,” he says.

Gutersloh and global businesses

Gutersloh is a tiny German town that has a population of barely 96,320. But it is an industrial powerhouse, with one of the highest per capita incomes in the world.

Miele is not the only hundred-year-old family-owned company operating out of Gutersloh – there are two more and with strong India connections to boot. The biggest behemoth of Gutersloh is the 175-year-old media giant Bertlesmann (the owners of properties such as Amerian Idol and X Factor , record label BMG and publishing house Random House) founded by the Mohn family. Bertelsmann has been in India for four years but set up its corporate office at Noida just a few months ago, signalling its growing interest in the country.

There's also the over 100-year-old food company Dr Oetker founded by Dr August Oetker in 1891, which has acquired Fun Foods in India.

And their lives are certainly interconnected in both business and personal spheres. As Miele is in the kitchen business and Dr Oetker in the food business, there's a lot of synergy and cross-promotions that take place.

(The writer visited Miele's facilities in Germany at the company's invitation.)

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