An interview with Dr. Hadi Shahbazi, CEO of Kilos Food Industries Complex, with Trends magazine has been published, covering the ongoing processes at Kilos, the partnership with Anadolu Efes, the state of the beverage market in Iran, and more.
Trends is an international business magazine focused on the MENA region (Middle East and North Africa), with particular emphasis on Iran, Turkey, and the UAE.

From investing as an entrepreneur to leading a growing beverage manufacturing complex — please tell us a bit about yourself and the path that brought you to this point:

I was born in 1981, and while pursuing my bachelor's degree, I began working in my family business in the auto parts sector. After studying industrial engineering and earning a master's degree in MBA, I later completed a doctorate in business from the University of Lisbon. I spent 15 years in the auto parts industry, then in 2005 joined Golrang Industrial Group and began working in the field of pharmaceutical supplements, which led me to found Abyan Daru Company. We designed and launched supplement products that turned out to be a very successful experience, and within a short time the company became one of the leading players in Iran's supplement industry.

Abyan Daru being listed among the top 30 employer brands in the country, and the launch of the Abyan Daru factory as one of the top solid pharmaceutical production sites nationwide (located in Hamadan province), are among my other achievements in the pharmaceutical and supplement field.

In 2023, at the invitation of Golrang Industrial Group, I entered the beverage industry and malt beverage production. Golrang Industrial Group has made a substantial investment in this field. This holding company intends to become one of the leading players in the country's beverage industry. Backed by Golrang, we have begun this endeavor and continue to pursue it.

Golrang Industrial Group is one of the largest producers and distributors of FMCG products in Iran. Kilos Food Industries Complex is also considered one of the most important beverage production companies with advanced facilities; tell us about these two organizations. How did Kilos become part of Golrang?

Golrang Industrial Group is the largest private-sector holding company in the country, with more than 50,000 employees across Iran and various other countries. Golrang has designed a well-defined strategic plan to be among the world's top 500 companies in the coming years and is actively moving toward that goal.

The Golrang Group includes around 150 active companies across various sectors and has several sub-holdings, one of which is the Hasti Food Industry Sub-Holding, of which Kilos is also a member.

Kilos Food Industries Complex was established in 2004, with substantial investment made toward producing malt beverages and carbonated drinks; however, the original founders were unable to complete the launch and finish the investment, and the process of opening Kilos was halted due to financial difficulties. Later, in 2020, Golrang Industrial Group acquired a majority stake in the company.

Our plan is to leverage Golrang Industrial Group's infrastructure — its distribution companies, chain stores, logistics systems, financing capacity, and, most importantly, its management and entrepreneurial model — to bring this complex to its rightful position as the largest malt beverage producer in the Middle East. Alongside malt beverages, producing other carbonated drinks, malt grain, and malt extract is also part of our plans.

Kilos has a complete malt beverage production chain; in fact, from the earliest stage — receiving barley from farmers — all the way to the final product, every stage of production can be carried out at Kilos.

The complex is equipped with a malt production factory. Kilos's Malting Tower is unique in the Middle East. Alongside it, the full Brew House process is carried out on-site at the factory. Kilos is also equipped with a concentration unit, where malt extract is concentrated after brewing and then sold or exported to other beer-making companies. The syrup room and various packaging lines — including can, glass, and PET — are also located within the complex. It should be noted that some parts of the factory are still being commissioned and expanded.

Currently, a significant portion of the various energy drink brands available on the market are produced by Kilos Industries Complex through contract manufacturing.

Manufacturing in Iran is a very difficult field — from rising operating costs and barriers to importing raw materials, to the regulatory environment and an increasingly competitive market. How do you deal with the numerous challenges in this market?

Golrang Industrial Group has years of experience and managerial expertise, which has effectively trained its subsidiaries in core business principles, and on the other hand, we also have access to the group's resources. Issues and problems that various companies have struggled with for years have already been tested and resolved through trial and error within the group, and we continue to follow that same model. In other words, even though companies within the Golrang Group operate independently, leveraging best practices across the group provides significant help in overcoming various challenges.

Please explain the challenges related to importing raw materials and import-related issues in general.

We don't have any particular problems with importing raw materials. Among the biggest challenges of this business, I would point to branding and the need for substantial investment to operate the largest brewing complex in the Middle East. I consider these two the biggest challenges; we have solutions for both, and the path forward is clear to us. In terms of investment, we are connected to Golrang Industrial Group, and we have done branding many times before and are familiar with that process.

Beyond planning and quality control, what key factors do you see as essential for success in manufacturing? People generally don't trust or respect domestic manufacturers as much as foreign ones. How can domestic manufacturers assure consumers that their products are as good as their foreign counterparts?

The most important part, in my view, is product development: designing a good, high-quality product under a strong brand. That is essentially the foundation of our work.

Consumers have proven that they trust products, provided they are given quality goods. Proper branding, appropriate value creation, and building a clear brand image in the customer's mind will earn consumer trust.

I believe we are capable of producing goods on par with global markets and ranking among the best in the world. What matters is that we want to and that we follow through. If quality, suitable products are delivered to domestic consumers, they will certainly embrace them.

In addition to producing its own brands, including Matador, Kilos is now a partner of Efes — the ninth-largest brewing holding company in the world and the fifth-largest beer producer in Europe, based in Turkey. How is production of Efes-licensed products progressing? Given that millions of Iranians travel to Turkey every year, is there enough brand awareness for this project to become a major success?

In fact, producing under the EFES license serves as a starting point for a partnership between two large international holding companies: Golrang Industrial Group and Anadolu Efes.

We see this as a collaboration between two large holdings, since Anadolu Holding is also active in a variety of sectors — including the Migros chain stores, automotive, beverages, and various other fields. This is the beginning of a broader joint collaboration between the two large holding companies.

With a presence in more than 80 countries, Efes is a globally recognized brand — the ninth-largest brand in the world in the malt beverage category. But that's not the whole story. These products are actually designed and customized to meet the needs and preferences of domestic consumers, something Efes has done very well, and we must be able to deliver that created value to consumers without compromise, and compete in the domestic market against traditional competitors — which of course comes with its own particular challenges.

Iran is the largest per-capita market in the world for non-alcoholic beverages. What is the current state of the malt beverage market in Iran, and what opportunities and challenges exist in this sector?

Beer around the world is actually quite different from what has become established in Iran as flavored malt beverage. In other words, the Iranian market is such that we can't really draw on successful global models. The Iranian flavored malt beverage market is very unique and self-derived. So it depends heavily on creativity, and we need an innovative approach — we can't rely on the world's successful models for this particular market.

Efes is a multi-billion-dollar company operating in more than 60 countries. What are the advantages of working with such a large organization? Are there any disadvantages or challenges?

The biggest advantage of Efes for Kilos is precisely this transfer of knowledge. After all, the experience they've gained over many years of production is something we can learn and implement quickly; this is extremely valuable to us.

What plans do you have for the future of Kilos? Are there development plans on the horizon? Do you intend to export? Is the partnership with Efes expanding to include new products?

Kilos Food Industries Complex has development plans in several areas, part of which relates to malt grain and malt extract, which falls under our B2B business segment. In the beverage sector, we are focused on the B2C segment. We have a variety of brands in the pipeline. In terms of exports, our focus will primarily be on Muslim countries, which can confidently receive halal goods from us. We will also draw on the capacity and resources available through Golrang Industrial Group along the way.

Currently, we export the Matador brand to Lebanon, the UAE, and Afghanistan.

We are very interested in attracting foreign partners for the Iranian market in the carbonated soft drinks sector. We are also ready to collaborate in global markets when it comes to malt grain and concentrated malt extract.

How do you feel about the overall economic situation in the year we've just entered? Are you optimistic about the business outlook for 2024? Why?

I think that if we set aside the political conditions prevailing across the Middle East, the domestic situation in the country will remain relatively stable, and I anticipate a gentle, gradual development outlook. There is also a coordinated environment forming domestically, which I believe will help create stability at the level of the domestic economy.

Your colleagues at Kilos say that your leadership style and management approach will be an important part of your legacy at this company. Please share your thoughts on this, and tell us what you hope future generations of this company will remember about what you built?

Before joining Kilos, in the pharmaceutical sector, we created products that have remained as our legacy, and I hope that at this company as well, the brands we create will be well received by people and remembered for many years to come.