Under the “Success Stories – How it was done!” series, MMA organised a discussion with Mr V R Muthu, Chairman and CEO, VVV & SONS EDIBLE OILS LIMITED. Mr C K Kumaravel, CEO & Co – Founder, Naturals, led the conversation.
Muthu: As a child, I had been to Courtallam falls with my family and relatives. After taking bath in the falls, we came out. Seeing the water continuing to flow from the falls, I asked my father, “Can you ask someone to stop the motor? Water is getting wasted.” I didn’t know then that there was something called as a natural waterfalls. I was concerned that water should not be wasted and that was thanks to my parents’ upbringing. My father always would insist on switching off lights and fans when no one was in the room. My father had arranged tuition classes for me at Rs 100 per month. Once, the tuition master announced a day’s leave, as he had to travel to some place. I went and told my dad, “Today my master has declared holiday. So can we reduce the tuition fee?” These are just instances that showed that I had a natural business sense even as I was a young lad. I also recall taking a flight from Chennai to Madurai, paying just Rs 90 as the flight fare.
Kumaravel: In my family, we grew up as six children. When we finished eating, our plates would be clean. We were brought up with the message that nothing, including food should be wasted. They say that values are not taught, but caught. Can you recall about your school / college and teachers who made a difference to your life?
Muthu: I studied in Virudhunagar at the Kshatriya Vidhyasala (KV Sala) school. It was known for discipline. Mr George, the Principal, was very strict and everyone would dread his name. Thanks to that discipline, I passed SSLC with 75%, which was a very good grade then. Then I joined PUC at St. Joseph’s College, Trichy, which was then equally known for discipline and would be called more of a school than a college. There used to be ‘silence hours’ in the hostel. I passed PUC, again with 75% grade. Then, I moved to Bombay University and joined a college for my intermediate education.
At that time, the Tamil Nadu was witnessing continuous agitations against the introduction of Hindi in curriculum and the colleges were closed for almost 6 months in a year. That’s why my dad moved me to Mumbai to stay clear of the agitations. He also wanted me to pick up English and Hindi. The college I joined was not strict. It was very liberal and one could walk in and out of the classes at will. The hostel windows did not have a grill. So we could enter and exit through the windows.
Every Friday, a Hindi movie would be released and we would go to the movie. As a result of this transition from a disciplined to a very liberal setting, my studies suffered and I did not prepare well for the exams. I prayed to Lord Ganesha, yet I failed in the exams. This, in spite of my scoring well in my school and pre-university. The lesson is that Lord Ganesha helps only those who prepare well. Where there is discipline, there will be preparation. Where there is discipline and preparation, there will be success. If both are absent, there will be failure. I am a standing example for this.
Kumaravel: The problem and the solution are both within us. Can you tell us how your mom influenced you?
Muthu: My mom would recite many Tamil proverbs. Some of her favourites are: A patient person can rule the world; A mouth that tells lies will not get food; Stay far away from evil; Don’t step into the house of one who does not respect you. All these have influenced me. I also tweak many of them and come up with new proverbs to reflect the business context. For instance, one proverb goes, ‘A contented mind is a medicinal elixir.’ This will be apt when we eat or do shopping. Unfortunately, many business people in Tamil Nadu latch on to this proverb. According to me, for entrepreneurs, this is not applicable, as they should focus only on growth, growth and more growth. I have seen such a growth mindset in the people of Mumbai and Coimbatore.
The reason why companies like Idhayam succeed is due to lack of this growth mindset on the part of our competitors. We are No.1 in sesame oil sales in the country. We are in this trade for 80 years. We are No.1 in groundnut oil sales in Tamil Nadu, even though we started its production only 15 years ago. Credit for our achievement goes to our competitors who have a contented mindset. They confine their market to the towns in which they manufacture. They do not want to grow beyond that. When we want to market throughout Tamil Nadu or across India, we are able to succeed easily.
Another proverb goes as, “Would one offer wages for eating sugarcane?” When you eat sugarcane, it is so sweet. The very act of eating it by itself is a joyous act. So why would anyone demand a wage for such an act? It means that when someone does something that he/she cherishes, they don’t expect any other compensation. I have tweaked this one too as, “Eat your sugarcane and demand wages.” What I refer to is that one should take up a role or task that one is passionate about and still, make money doing that. For instance, AR Rahman loves music. For him, composing a song is his piece of sugarcane. Yet, he gets richly paid for his works. For PV Sindhu, playing badminton is her eating the sugarcane. Yet, she makes millions of dollars out of playing the game.
Whatever you do, you must do it to your best. For instance, I am a marketing person. I have been in marketing for 40 years. My brother Sathyam is in production for the last 30 years. We don’t swap our roles. Marketing is my passion and production is my brother’s forte. Do what you are passionate about.
Kumaravel: They say that rain fills the size of the vessel you carry. The larger it is, the more water you can collect. This refers to the growth mindset. Tell us how your family started this sesame oil business and the early days.
Muthu: My family was doing trade on a commission basis even before the 1940s. They had establishments in Colombo, Rangoon, Karachi and Mumbai of the British era. When they were in Rangoon (now Yangon), the World War II started and Japanese bombarded it. So the Indian business people were asked by the British to move to India. Our family members and agents moved back to India. The British government announced that the income from Rangoon operations need not be shown for income tax purposes for the reason that the books of accounts might not be available with people who were fleeing the war zone. But our elders had copies of the accounts of Rangoon operations in Virudhunagar and they voluntarily declared to the government that they would pay income tax taking into account their Rangoon business also.
Such was the tradition set by them—being honest and values-driven. When my grandfather died, my father put up his photograph in our house with the three letter mantra that grandpa had instilled in our family: Truth, Hard work and Growth. ‘Where there is truth and hard work, there will be growth.’ This philosophy guides us in all our businesses till today.
In the early days, we were trading agents, sourcing multiple types of grains from our principals based in North India. We sold exactly at the prices fixed by our principals. What was our revenue model then? When we received the goods, we would pay 80% of the value to the principals, for which they would pay us interest. For storage of the goods in our warehouse, we got rent. On sale of the goods, we got commission. So, it was a combination of interest, rent and commission. This was going on for several years.
At one period, sale of sesame seeds was going on very well. In Virudhunagar, there was a sesame oil producer, for whom we sold sesame seeds in large quantity. Suddenly, he ran into financial difficulties and was planning to wind up his business. My grandfather and his three brothers stepped in and discussed how they could overcome the loss of their business from their key customer—the oil producer. “Why don’t we get in to the business of producing sesame oil?”—They deliberated this model of forward integration—that is, producing sesame oil and thus we started producing sesame oil. This was in 1940. Since then, we are into this business.
All four brothers were together managing it till 1943. VV Dhanushkoti (popularly known as VVD) is one of them. The VVD Coconut Oil is the first brand launched from our family that became popular. Till 1986, we sold sesame oil under ‘Anandham Brand.’ Then there was a family partition and ‘Anandham’ brand went to my uncle. My father asked us to think of a new brand name. “Sakthi” was the brand name we first came up with, printed our labels and even created jingles, using popular female playback singer Vani Jayaram, but we learnt that someone else was selling sesame oil under that name in Erode. So we scrapped that idea and all the labels and thought of another brand name.
At that time, we had a tag line for ‘Anandham’ brand. It was: Friendly to the Heart (Idhayam in Tamil). We decided to use the word ‘Idhayam’ as our new brand name. On December 1, 1986, Brand Idhayam was born. At that time, there was only Roopavahini (Sri Lankan TV Channel) broadcast in Tamil Nadu. On 14 January 1987, DD Tamil TV Channel was offered to people of Tamil Nadu after the installation of a TV Tower in Kodaikanal. On the day of Tamil TV launch, we launched our TV ad, featuring actress Chithra. In the commercial, she would tell her husband, “I didn’t ask you to cook or wash clothes. I only asked you to buy Idhayam Gingely Oil,” to which the husband would ask, “What is so special about Idhayam?” She would highlight the taste of the oil and say, “This is a ladies’ subject. Why don’t you just go, get it?”
This commercial became a super hit for many reasons. It had its share of controversies too. Men objected to it saying that the wife in the ad demanded her husband to just go, get it, without asking questions. Women objected to it asking if cooking and washing clothes were purely in their domain. The net result was that the sales of Idhayam oil increased. A person from Madhuranthagam claimed that he would walk all the way from his place to Doordharshan (DD) building in Chennai and break the television set if DD did not stop airing the ad. DD ignored that threat and continued to broadcast the ad.
One major reason for the huge success of the commercial was that it was conceived in Tamil and written in Tamil. Most of the ads would be produced in Hindi in Bombay and then dubbed in Tamil. Also, director and actor Bhagyaraj was popular at that time. Our ad’s dialogues had a flavour of his style. Added to that, TV remote was not in vogue at that time, so people could not switch channels during an ad! After remote came, we have gradually moved away from TV commercials.
Kumaravel: When you were about to lose a major customer of your sesame seeds, it was a major challenge. But you converted it as an opportunity by starting sesame oil production. This tells us that entrepreneurship is all about converting challenges and threats into opportunities. One can look at a glass that it is filled to its half either as half-empty or half-filled. Can you tell us about Leka Ratnakumar who created that ad for you?
Muthu: Leka Advertisers and Film Makers have been designing and printing our labels since beginning. All our ads are being done by him, right from the first one. Leka Ratnakumar is a very creative artist. All his works have been commercial hits. He did a commercial for us featuring actress Jyotika. Within a year or two of this ad release, the hugely successful Tamil movie, ‘Dhool’ was released which featured actors Vikram, Jyotika and comedy actor Vivek. In three places, Vivek had made a comedy, linking Jyotika and Idhayam gingely oil. Even if Vivek had asked us ten lakhs to use our brand name in the movie, we would have paid him. But he did not demand anything from us and thus it became a free publicity for us. It is true that free publicity is the best publicity. All the credit for that commercial must go to Leka Ratnakumar and his team.
The song in that commercial was rendered by Srilekha Parthasarathy. After the release of the ad, she got many offers and became very popular. Chandramohan of Hatsun Foods and I are close friends for 50 years. Hatsun did an ad with actor Simran. So we roped in Jyotika. She is such an amazing and wonderful actor that the director will say, ‘Start’ to commence shooting her but would be very reluctant to say, ‘cut’ when she is performing. I have heard of actors asking, “Are we done with the shoot?” But Jyotika will continue to perform, totally immersed in the role that she does. We use her photo in our labels. In fact, in the US, we tell our customers to see if our sesame oil carries Jyotika’s image and if not, it is not a fake. There is one more Idhayam brand sold in the US without Jyotika’s image. We are fighting a long legal battle in the US against our brand name being misused by another company. Team Leka is totally committed to Brand Idhayam.
Kumaravel: Tell us about meeting our late Chief Minister Kamaraj who revolutionised school education in Tamil Nadu by starting numerous schools and introducing the noon meal scheme that brought many children to the schools. Thyrocare Velumani would recall his school days saying, “I went to school with a slate in one hand and a plate in another hand.”
Muthu: Next to our school was the Travellers’ Bungalow. I was doing seventh standard and Kamaraj had stayed there in 1965. As school students, we went and met him. His gigantic figure is still fresh in my mind. He asked us what we were doing. When we told him that we were studying in the nearby school, he asked us to get back to the school immediately. Kamaraj was known for being austere. I can proudly tell you that our town Virudhunagar played a big role in instilling this austerity in him.
Before he introduced free education in Tamil Nadu, Virudhunagar town already had free education in place. He saw and was inspired by that model, which he then scaled up in Tamil Nadu. Even before India got independence, Virudhunagar had a college and built good buildings for the educational institutions. Every household had a tradition of saving a handful of rice everyday, which would then be collected by an association. This rice was shared with the teachers, thus making free education possible, even in those days.
Also, the Virudhunagar traders followed a system called ‘makamai,‘ of contributing voluntarily a tax, proportional to their sales. This would be pooled by the community and used to run the educational institutions. In fact, earlier, Rajaji (Rajagopalachari), then Premier of the Madras Presidency visited Virudhunagar and was impressed by the educational institutions and their infrastructure. When he asked the people how they ran them, our town people explained to him about the voluntary Makamai system. This thought sank in him. When he went back, he introduced the sales tax for the first time in India. So fortunately or unfortunately, the traders of Virudhunagar have played a part in the introduction of sales tax.
Kumaravel: Can you take us through the women empowerment in your family…
Muthu: My wife runs a boutique ‘Thozhi’. They stitch designer blouses and have customers from as far as Seattle. My daughter-in-law supported by my wife manage a concept called ‘garbage bank’ in Virudhunagar, collecting non-biodegradable household waste from 700 houses, some schools and the General Hospital. It is segregated into 45 categories. Recyclers are identified and the waste is sold to them. We pay the residents for giving us the waste. It is managed very well. From 700 houses, they have plans to scale it up to 7000 houses. For the last 5 years, no waste from our house has gone to the municipality.
Insights from the Q&A Session:
A Premier Customer
One of our distributors in Mumbai had gone to the night show to watch a movie. He got a phone call. The caller wanted 2 litres of Idhayam gingely oil immediately. Irked by the call, the distributor disconnected it. Again he got the call. The caller repeated his request and pleaded not to disconnect. He said, “If you can deliver now, it will go by tonight’s flight to New Delhi and from there, by an early morning flight to Moscow, where in two days’ time, it will be used for our Prime Minister Mr Narendra Modi’s breakfast, for mixing it with chilli powder and serving with idlis.” The request was made by a caterer from Mumbai.
Our distributor was taken aback by the request and its importance. He rushed out and immediately delivered the gingely oil to the caterer, which reached in time to Moscow for the PM’s breakfast. This anecdote was shared by our distributor. The message I want to tell you is that if you deliver a quality product, even the Prime Minister can become your customer.
There is a proverb which says, “Search and you will get it.” I have tweaked it as, “Search and you will get even what you didn’t search for.” Columbus set on a voyage to discover India but he ended up discovering America. We focussed on marketing our products only in the region between Chennai and Kanyakumari. But our market has grown not just in India but beyond, right from Toronto in the North West to Sydney in the South East. This has happened as our satisfied customers in Tamil Nadu have spread their wings, all across the globe. The market that we searched for was Tamil Nadu but the one we got is the global marketplace.
Usage of Technology
In oil production, press, rotary, expeller and refining are the evolution of technology. We are using expeller. If we use refining, we may not get the taste and flavour of gingely oil, which is mainly preferred for its special taste. We follow the best process for cleaning the raw materials using latest technology and deploying machinery imported from Germany, apart from sourcing high quality raw materials.
We may not have the best smell and that is because of the high tech cleaning process that we follow. When cleaning is not done perfectly, you get a good smell. I invite you to visit our factory in Virudhunagar and see our production process. I promise you that we will serve you lunch which will include idlis served with chilli powder and our own Idhayam brand gingely oil.