Nuts Nutty Business: Growth Strategies of Family-Owned Business – Zantye Cashews
Introduction
For anything worth achieving one has to pay the price and the price is always sweat, grind and hard work. The factory christened M/s Achyut Cashew Factory (ACF), result of the untiring efforts of Achyut Madhukar Zantye (Madhukar) and his elder son Vasudeo Madhukar Zantye (Vasudev).
After a thorough SWOT analysis, Achyut Zantye (Achyut - grandfather of Madhukar) was aware of the opportunities in the business as cashew was the commonly found crop in western Maharashtra. He thought of starting a small scale business of cashew processing in his village, Tulas.
The strengths were easy availability of raw material and labour from the village itself. Weaknesses were that he was totally new to this market and did not have any knowledge about cashew processing opportunities. As cashew was an easily available crop in western Maharashtra, cashew industry had a bright future. Threats were other emerging competitors and inadequate availability of finance.
Achyut inspired his grandson with this idea. In 1979, Vasudeo started his first factory in Tulas and subsequently both the younger brothers, Achyut Madhukar Zantye (Madhukar) and Shrikrishna Madhukar Zantye (Shrikrishna), joined the business. After overcoming all the difficulties and having set up a good business they started four more new factories in the same district which were looked after by the entire family..........
Global & Domestic Industry Overview
India was the first country to bring cashew kernels in the global market and also pioneered cashew processing as an industry. India is also one of the largest cashew consuming countries in the world. In India, cashew was first introduced in Goa, then it later spread to other parts of the country. In India, cashew was grown in Maharashtra, Karnataka, Kerala, Goa, Tamil Nadu, West Bengal, Orissa and Andhra Pradesh. India and Vietnam were major producers and exporters of cashew accounting for 40% and 33% market shares respectively. India exports cashew kernels to over 60 countries. Cashew ranks third5 in world production of edible nuts that are traded globally. The other products and by-products of cashew are Cashew apple, Cashew apple juice, Cashew syrup, Cashew apple jam, Cashew apple candy and Cashew Nut Shell Liquid...........
Achyut Cashew Factory
The head office of M/s Achyut Cashew Factory is situated in Tulas, a small village in Sindhudurg district. In 2015-2016 they had a capacity of processing 10,000kg raw cashew per day which is much more than their rivals in Western Maharashtra.
Zantye cashews had segmented their retail markets on the basis of geography which are in Goa/ Sindhudurg and Mumbai region.............
Product Mix
The Company started the business with basic cashews as a category in 1979. In cashews there are two types NW (natural whole covered) and FW (uncovered). Under White Whole type, there are different grades like W180, W210, W240, and W320.........
Product Diversification
By the year 2004, the company had started the product diversification by taking up forward integration (Exhibit III).........
Innovation and Quality Control
The company had a strong presence in the market because of its quality, freshness and strong distribution channels, which it achieved through different processes involved in its operations. Initially, the processes like grading and peeling were done manually by hiring the workers but in due course of time the company has made these processes automated by installing color sorters, high speed cameras and peeling machine.........
Distribution
One of the major factors behind the success of the company was its sound distribution channel, which it had developed over the years. The Company had its own transportation to Goa. After keeping the product in the drying yard for 3 days the product would be transported to the warehouses..........
Corporate Social Responsibility
As a part of CSR, the company had shown its concern for environment and health in particular and donated 25,000 cashew plants/saplings every year........
Challenges Ahead
One of the major issues the company faced was related to labor, as this was a female-oriented job. Primarily the male members are involved in fishing and agricultural activities where in hard manual labor is required and these activities are also more rewarding hence the females are left for these jobs which does not involve much hard labor...............
Assignment Questions
I. Conduct a SWOT Analysis of the business.
II. Discuss the major issues surrounding the case.
III. Advise the company to create a sustainable competitive advantage.
IV............
Exhibits
Exhibit I: Matters that CEPC India Takes Care of
Exhibit II: Value-added Products of Zantye Cashews
Exhibit III: Forward Integration of Zantye Cashews
