Start-ups line up food street with new-age menu

Smarter, health­ier prod­ucts help new food brands carve out a niche for them­selves

Business Standard - - FRONT PAGE - RANJU SARKAR

Call them mil­len­nial food brands.

Epigamia, RAWPressery, Pa­per Boat, Veeba Foods, Finger­lix, and Chai Point — these have all made a mark by at­tract­ing mill en ni a ls, who look for some­thing trendy, some­thing healthy. In­no­va­tive prod­uct and pack­ag­ing are the USPs of these com­pa­nies that have struck a chord with cus­tomers. Do­ing it dif­fer­ently is the mantra of these new com­pa­nies, claim ex­perts.

“En­trepreneurs are start­ing brands in cat­e­gories that didn’t ex­ist (Greek yo­gurt, for in­stance). We also see peo­ple start­ing brands in cat­e­gories that are com­pet­i­tive but there are no chal­lengers. Veeba Foods, for in­stance, has gone into a very com­pet­i­tive seg­ment (sauces), but has done it dif­fer­ently — health­ier and bet­ter,” said Deepak Sa­hada­puri, man­ag­ing part­ner, DSG Con­sumer Part­ners. His com­pany has backed both Veeba and Drums Food (mak­ers of Epigamia — a Greek yo­gurt), as well as Sula wines.

“Some want to en­ter a seg­ment that’s al­ready big but with­out very good prod­ucts. Veeba is do­ing this. They feel sauces in the mar­ket are medi­ocre and they want to make the best ones,” said Sa­hada­puri. “Oth­ers such as Ro­han Mir­chan­dani (founder of Drums Food) are keen to en­ter a cat­e­gory be­fore oth­ers.”

70% OF OUR SALES COME FROM THE GEN­ERAL TRADE UN­LIKE MANY OLDER BRANDS WHO ARE HIGHLY DE­PEN­DENT ON MOD­ERN TRADE” VI­RAJ BAHL Founderand MD, Veeba Foods THE CUS­TOMER IS LOOK­ING FOR FRESH JUICE, WITH NO CON­CEN­TRATE OR SUGAR. WE’VE DONE THIS AT THE DE­VEL­OP­MENT LEVEL” ANUJ RAKYAN MD, Rakyan Bev­er­ages

Some of these fledg­ling en­trepreneurs are rid­ing high on the ob­ses­sion of mil­len­ni­als with healthy food. For in­stance, RAW Pressery that makes health­ier and fresher cold-pressed juices.

Oth­ers are tak­ing a leaf out of the in­ter­na­tional mar­kets. Sleepy Owl serves cold-brewed cof­fee — a grow­ing seg­ment in the US (all Star­bucks out­lets serve it) but yet to take off in India. Finger­lix and iD Fresh Food serve freshly packed dosa bat­ter and other ready-to-eat dishes.

A few are even stick­ing to tried-and-tested prod­ucts. Chai Point’s vend­ing ma­chines serve chai (tea).

So what’s driv­ing these en­trepreneurs?

The big­gest at­trac­tion is the huge food and bev­er­ages mar­ket. Along with it is the fact that there has not been a lot of in­no­va­tion in the seg­ment. For in­stance, Maggi sauces have been around for decades with­out too many changes.

“A 25-year-old thinks dif­fer­ently and wants to eat new things. They want some­thing health­ier, with less sat­u­rated fat; they also want higher pro­tein. Very of­ten, they are in­flu­enced by global trends and what they see on Face­book or Twit­ter,” said an in­vestor.

There are quite a few chal­lenges though. Thanks to ecom­merce, it has be­come eas­ier to dis­trib­ute and build brands. “For these brands, ecom­merce is a ma­jor boost,” said Kan­waldeep Singh of Fire­side Ven­tures in an ear­lier in­ter­ac­tion.

The tough­est chal­lenge in con­sumer goods is dis­tri­bu­tion. Big, es­tab­lished play­ers can al­ways out­sell the foot-inthe-door en­trant. “Try and launch a ce­real and Kel­logg’s will out­sell you on me­dia and dis­tri­bu­tion,” said the founder of a new food firm.

But so­cial me­dia is mak­ing the field more even, he added. “There are smart ways of mak­ing your brand known. With BigBas­ket or Ama­zon Launch­pad, you have a chance to make your prod­uct avail­able across the coun­try.”

Dis­tri­bu­tion, how­ever, still re­mains a chal­lenge. For in­stance, Epigamia started man­ag­ing its own cold chain af­ter try­ing out third par­ties.

A few new play­ers have also man­aged to scale up.

Veeba Foods, which started by sup­ply­ing sauces to fastfood restau­rants such as KFC and Burger King, now re­tails its prod­ucts, which ac­count for a third of its sales. Its dis­tri­bu­tion net­work has ex­panded to 300 towns and cities.

So what did it do right? Founder Vi­raj Bahl claims Veeba has bet­ter prod­ucts to of­fer. “Our sauces are gen­uinely good and tasty. They are health­ier too. For ex­am­ple, most may­on­naise brands have 60-70 per cent fat con­tent; our mayo has only 20 per cent fat.”

Oth­ers have been able to ad­dress a de­mand. “Con­sumers are look­ing for fresh juices, with­out con­cen­trate or sugar,” said Anuj Rakyan, man­ag­ing di­rec­tor, Rakyan Bev­er­ages.

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