Spoilt for choice

If you walk into a Nature’s Basket outlet in Mumbai, or even the Food Hall at Palladium, you will most likely find little tubs of Epigamia Greek yoghurt lining up the dairy section. It catches the eye. In trying to catch more eyes, Drums Food, the makers of Epigamia Greek yoghurt and Hokey Pokey ice cream, are increasing their reach and tweaking their flavours to suit Indian palettes. With people moving towards a healthier lifestyle, “The Snack Pack was conceptualized keeping in mind a legacy of oily and fried snacks in the face of shifting consumer patterns towards seeking healthier lifestyles,” says Rohan Mirchandani, CEO.

Drum Foods, was started by two childhood friends, Rohan Mirchandani and Milap Shah. Other friends were asked to join – Chef Ganesh K who was working in India and Uday Thakker from Los Angeles. The duo’s initial exposure to the food industry was Hokey Pokey ice cream, which was launched in 2008.

rohan_1 copy

“We are not in the dairy business. We are in consumer and branding,” says Mirchandani.

Later, in 2015 the company entered the retail market with its ice cream tubs available in nine flavours. With business growing, it was important for Mirchandani to be more hands on. Hence, he moved to India from New York, USA.

Ice cream has a seasonal market in India. Yet, if one goes by industry figures, the per capita consumption of ice cream in India is amongst the lowest compared to developed countries. Ice-cream, which was considered an indulgent category in the past, has now evolved to being perceived as a snacking option by consumers. This change in perception has come about due to increasing disposable incomes and greater discretionary spending. The change in the perception of consumers has allowed the category to grow in volume. Also, with investments made, cold chains are getting better and hence contributing to the category’s growth. In fact, ice-cream, as a category, has been growing at a compounded annual growth rate of 10-15 per cent. “If small players come with flavours appealing to the Indian taste buds, they will find a space of their own,” says Randhir Kumar, DGM marketing (dairy products), Mother Dairy.

A shift in consumer patterns towards healthier eating has now started taking place. Already having their dairy sources in place, as well as the infrastructure to support a cold chain supply product, Drums launched the Greek yoghurt in 2013, in four flavours.

Greek yogurt is strained more excessively than regular yogurt in order to create a thick and creamy texture that has high protein and low fat content. This process of straining the yogurt to create a thick consistency comes from Greece, hence the title Greek yogurt. In India, Greek yogurt is a very nascent market. Nestle is the big competitor for Greek yogurt in India. “Greek Yogurt was a totally alien concept to the Indian market, and educating them about the product itself was a great challenge. So far we’ve had an incredible response from the Indian market,” says Mirchandani.

Epigamia1Keeping in mind a legacy of oily and fried snacks in the face of shifting consumer patterns towards seeking healthier lifestyles, a Snack Pack, priced at Rs 50-60, was launched recently. The Snack Packs, which consist of 100g of yogurt, along with a mix-in pack of chunky granola is an ideal on-the-go snack. It’s available in three flavours, including jalapeño. The Indian palette is an interesting one. For years we have been having dahi. As a consumer palette, Indians are comfortable with savory. According to Mirchandani, the jalapeño is their version of the raita. A move that industry watchers feel the company is using to differentiate itself from other players.

Since the last four years, Hokey Pokey ice cream and Epigamia Yoghurt are available nationwide. Epigamia is available at about 4,000 distribution points across India, with the widest distribution in Delhi NCR, Bengaluru, Mumbai, Hyderabad and Chennai. The recently launched Epigamia Snack Pack should eventually be available in most of the retail outlets. And Hokey Pokey ice cream is available in 250-300 retail outlets across the same metros mentioned above.

Production of both, the ice cream and the Greek yoghurt is out-sourced from third party manufacturers in Maharashtra and in Karnataka. Soon a third facility in Jaipur will be added to cater to the northern regions. The way Mirchandani looks at the business is “We are not in the dairy business. We are in consumer and branding,” he says.

Dairy products are extremely temperature sensitive, especially ones that do not contain any preservatives. As a result, the focus is on optimizing its in-house cold chain supply, and ensuring retailers understand the importance of keeping its products at the optimum temperature.

For now the company is tight-lipped about their revenue numbers, but are happy to share that in six months, Epigamia sales are up 140 per cent. Funds are coming in. The company raised Rs44.5 crore in its Series-A funding round in July 2016 from Verlinvest, the Belgian marquee consumer investor, and DSG Consumer Partners, an early-stage venture capital fund. Drums is also backed by angel investors such as Shripad Nadkarni (founder, Fingerlix and ex-CMO, Coca Cola India), Fireside Ventures (led by former Helion Ventures co-founder, Kanwaljit Singh), Vish Narain (Partner, TPG Growth), Kunal Kapoor (Bollywood actor) among others. To date, the company has raised Rs65 crore. “The raised funds are being utilized for talent acquisition, enhancing our supply chain and increasing production capacity,” says Mirchandani.

There is a lot of buzz in the category for sure. Young boutique players such as The Butternut Co., White Cub, Bono, The Parfait Co., to name a few, are also taking up shelf space. In the face of the big players, it’s the value proposition of the new players which which help them stand out.

 

A serial entrepreneur

 

curocarte1

(L) Kanupriya Verma, COO and Ananya Birla, CEO & founder (R)

Ananya Birla, Kumar Mangalam and Neerja Birla’s eldest daughter,  launched her second venture, CuroCarte on September 11. Completely different from her first venture, Svatantra Microfinance, a micro-finance company she started in 2013, CuroCarte will provide rare, handmade, high quality, home accents and accessories, sourced from nine countries.

Kanupriya Verma an IIM (Indore) alumni, and also a team member from the Svatantra team, has been brought in as COO at CuroCrate. An initial investment of Rs6 crore has been made. Essentially an unorganized market, Birla is trying to bring some method to the creativity with the help of technology. The charm of CuroCarte lies in the fact that the company will work directly with the makers, or artisans of the products, from all around the world. The idea is to provide consumers with utility as well as decorative products for the home. The brand will be presenting 1,500 products across 70 categories. “Through the brand, we aim to revolutionize the e-commerce space by bringing inaccessible, aesthetically appealing products from all around the world to the people in India and also to a global audience,” says Ananya Birla, founder and CEO, CuroCarte.

Priced at between Rs7,000 – Rs10,000 per item, the site will sell products from India, as well as from Thailand, Spain, Portugal, France, Morocco and Vietnam. According to Birla, a lot of focus will be given to digital marketing. Plans are to launch an app soon. “We don’t have any competition. We are very different from what’s out there,” says Birla.

Her first venture, Svatantra Microfinance, is estimated to have a portfolio of $20 million and 80,000 borrowers in three years since its inception. According to Birla, though CuroCarte is a completely different line of business, some things remain the same. “I have realised that your team, a high EQ, a sound business model and revenue model is what matters,” she says.With her second venture in place, Birla is making herself out to be a serial entrepreneur.

The tea way of life

Chai Diaries2

From a public relations executive in Mumbai, to a tea lady in Los Angeles, USA, Ami Bhansali has found her calling. Coming from a family that owns tea estates in the Nilgiri Hills of southern India, Ami launched Chai Diaries, a brand of specialty teas, in the American retail market in 2014. Two years later, she is launching Chai Diaries in India.

Two things Bhansali wants to do in India – one is tap the gifting market and second, open a tea shop. Over the past two and a half years, she has been able to get a sense of the Indian market. People are obviously interested, so even when she was doing her samples, she was selling a lot of tea. Bhansali aims to be number one in the gifting market (especially weddings) and hotels (she wants the rooms to carry her teas). The focus is on the white tea, and 10 flavours that are the same as the US. Everything

Chai Diaries8

Ami Bhansali: building Chai Diaries into a lifestyle brand

will be sourced locally and blended locally. The US packaging is to be replicated here. “India is really big on gifting and when you have something exclusive and something exciting then people don’t mind paying money for it,” she says.

Chai Diaries is a small start up. In one and a half years of operations, the company has sales of $150,000. From 21 specialty blends that she launched in 2014, today Chai Diaries has a portfolio of 45 varieties of tea based on blends including black, masala chai, green, infusion, Oolong, Pu-Erh, Rooibos, White and their own signature blends. All Chai Diaries tealeaves are imported directly to the US from the tea-producing countries of India, Sri Lanka, Japan and China and blended with fruit, botanical ingredients and all-natural products. The most recent addition is the instant chai, essentially a premix.

The Indian tea industry hasn’t seen much change in the last few decades. In fact, according to insiders, many things are still the same as when the British introduced tea to India. Buying tea is still done mostly through auctions. It is the third generation of plantation owners, who have grown up on tea estates, such as Ami and Teabox’s Kaushal Dugar, amongst others, who are helping change the industry and connect the consumer directly with the farm.

The opportunity for the tea sector is huge in the US, where tea has found new consumers. According to a report by Market Realist, a research and analytics firm, though the per capita consumption of tea in the US is quite low compared to countries like the UK and China, there has been an impressive growth in tea consumption in recent years. According to the Tea Association of the USA (USTA), the total wholesale value of tea sold in the US grew from less than $2 billion in 1990 to over $10 billion in 2014. Further, according to the USTA, the US has emerged as the second largest importer of tea in the world, after Russia. In 2014, the country imported 285 million pounds of tea, representing an estimated retail value of $10.8 billion.Chai Diaries6

The USTA claims that about four out of five consumers drink tea in the US. The preference for healthier beverages is driving consumers away from soda, and boosting the demand for tea. US tea sales are also growing due to the innovative products and flavors that the industry has brought to the table. The convenience and options across the ready-to-drink tea category have also attracted consumers. And everyone wants to be on the bus. Seeing the growth potential, biggies like Coca-Cola, PepsiCo and Dr. Pepper Snapple have introduced several flavors under their popular tea brands. With all this action, many young energetic brands are working alongside more established companies in changing the tea drinking culture within the country. It is this opportunity that Ami is tapping.

Bhansali started her career as a public relations executive in Mumbai. She went on to head the marketing function for various luxury fashion brands that had entered India in 2006-07. After spending a decade in the PR sector, her interest in tea piqued. “PR was becoming too small. I wanted to do something that challenged me. I didn’t know tea and retail. That’s (retail) the most challenging business in America. I’m glad I took the risk,” she says.

Bhansali moved to New York, USA, in2013.  Needing an excuse to continue staying there, she would register herself for short three-month courses. At the New York University School of Professional Studies, as part of the curriculum for the course ‘Starting your own Business (including submitting a business plan)’ fellow colleagues, who knew of her growing interest in tea, encouraged her to present a plan for the tea shop she wanted to launch. However, the teacher didn’t seem to think the plan would work in reality. That was enough for Ami to want to take it on as a challenge.Chai Diaries5

While the determination was enough to get going, there was a lot of learning to do. In 2012 when she was walking her first trade show – World Tea East in Philadelphia, a chance meeting with Charlie Cains, then tea operations head for Starbucks (he no longer works there) who asked her “What grade is your tea?” made her realize that there was a lot of learning to do. (In the tea industry, ‘what grade’ refers to the size of the leaf.) The next dilemma was ‘what should the tea taste like?’ Her brother’s advice was to go with what she likes as there would be people who would like exactly the same thing as her. Ami closed down on a range of 21 specialty blends.

Chai Diaries (as the brand is called) is a business built on passion. It is insp

ired by Ami’s childhood spent on Mahavir Plantations, her family’s tea estates in the Nilgiris. Started by her grandfather, Tarachand Bhansali, Ami is the third generation. Ironically, tea she wasn’t fond of while growing up. Yet, today, she has built Chai Diaries, on all the feelings, memories and aromas from her childhood. “There are acres of natural beauty. The smell of spices, cardamom, eucalyptus the minute you enter. You see these tea fields, and the women waking up at five in the morning, along with the sunrise and they are just laughing and going about their work. It’s such a happy environment. Growing up as a kid with my brothers all our adventures were based out of this. I have used all of these feelings, memories, and aromas in Chai Diaries,” she says.

The whole idea is that, while you have coffee when you are meeting people, chai is something you have on your personal time. It’s something that helps you to go back to who you are. So, the word ‘chai’ in the brand name has been used as a talking point, to educate people that Chai is tea. “In Starbucks they serve chai latte and people don’t understand `chai’ means tea. They think `chai’ means `chai latte’. I want Chai Diaries to be that. It’s a long goal. It’s a huge PR exercise,” she says.

In the US, Chai Diaries’ is available at larger retail chains in the US, such as Bed Bath & Beyond (BB&B), Southern Season in South Carolina, and at HEB and Central Market in Texas. Its presence in a store like BB&B may appear strange. However, what made this possible is when BB&B bought Cost Plus / World Market in 2012. Through this association, BB&B set up a World Gourmet section in select stores to sell wines, food, health chips and health teas, etc. Hence, Chai Diaries has a presence in 13 BB&B stores. Chai Diaries’ top four markets are New York, Los Angeles, Texas and Florida. While CD retails at $10 – $12 in the US, Ami chooses to do a direct conversion of dollar: rupee for the Indian market, which in fact makes this an expensive tea for India. She isn’t letting that get her down.

Ami wants to build Chai Diaries into a lifestyle brand, and promote the tea way of life – #teaworld. Besides tea, the company’s portfolio includes tea sets, yoga bracelets, stationary, pens, t-shirts, yoga leggings, yoga mats. “It’s gifting. It’s fun; and people are getting more health conscious and quirky things have always been a thing in India. The scope in India is definitely huge,” she says.

While the US market is more mass, India as a customer base is more exciting. As tea has the ability to go for a global expansion, there is demand from Dubai to meet. Yet, this is the tip of the iceberg for tea. With growing awareness, tea is no more this random tea lying in your kitchen. A whole new universe has opened up for this ancient drink.