across the country from Kashmir to Kerala, and also through various importers in the country.
In the last fiscal, the chain grossed a turnover of Rs. 82 crore, which is impressive taking into account its Rs. 57 lakh revenue in the first year of operation. “We are quite bullish on our offline model for at least another decade or so. But simultaneously, we are also ramping up our online presence and would also like to grow in that segment if it is commercially viable,” reveals Sanklecha. “We do not include other products (in e-commerce). The margins are limited and it become a little difficult for us to manage the entire supply chain as logistics is already very expensive,” he explains. He confides that he receives multiple enquiries on franchising his brand, but says he has no plans of venturing into it.
In a nutshell, please share the exciting phase of the growth journey of Nuts ‘n’ Spices over the years and how you see its growth trajectory going forward?
The journey of Nuts ‘n’ Spices started with its first store of 600 sq.ft. opening in Nungambakkam, Chennai, on 16th June 1999. Today, there are 33 Nuts ‘n’ Spices stores – 32 in Chennai and one in Coimbatore. Another store is scheduled to open in Pondicherry by this month’s end. With a mere INR 57 lakh as the first year turnover, we clocked INR 82 crore in the previous financial year. I see both the turnover and store count increase appreciably going forward.
Which are the elements that have become the identifiable hallmarks of your brand?
The concept of Nuts ‘n’ Spices is its strongest element. The kind of product mix that we carry is our USP.
What is the brand positioning of your stores?
The brand positioning of Nuts ‘n’ Spices has been in the premium segment from the beginning. We never wanted it to be recognized as another supermarket. Hence, all our marketing strategy has been geared toward strengthening the premium brand positioning of Nuts ‘n’ Spices.
The store’s value addition comes from its gourmet range of imported food products – pastas, noodles, sauces, fruit spreads, juices & syrup, frozen foods and ice creams. Also, the exotic range of imported biscuits, chocolates and confectionery tempts people from all age groups to visit the store again and again.
What is the location strategy for your stores? Which locations do you prefer?
As a premium brand, we always prefer to be located in places with a cosmopolitan character and with a mix of residential & commercial establishments.
What is the average store size? How much investment goes into setting up each store?
The average store size is about 1200 sq.ft., and a Nuts ‘n’ Spices store requires about INR 60-75 lakh in investment, depending on the location.
Which are the new and emerging categories at your stores and what do you think is driving the demand?
We deal only with food products and don’t carry any non-food products. Even in the food category, we don’t carry staples, groceries, fresh & other daily needs supermarket products. Our primary focus is on value-added products like dry fruits, nuts, spices and all other premium food products associated with health and wellness.
What are your processes and criteria for identifying new manufacturers, products and categories, and what are your benchmarks for tying up with new manufacturers and suppliers?
We entertain any product, whether Indian or International, only if it can add value to our product line. Our criterion for introducing a new product or supplier is that it should complement and gel with our product line. There are about more than 200 brands waiting to get an entry into our store. But since we are not interested in mass market products, and also due to the space constraint, we can’t place them in our store.
What is your private label strategy?
Ever since we started our business in 1999, on a principle basis we haven’t entertained any branded products in some categories where we already have our own presence. Dry fruits, nuts, spices, tea & snacks are a few categories where we have our private label products and they account for about 45-50% of our overall sales.
Our primary focus is on value-added products like dry fruits, nuts, spices and all other premium food products associated with health and wellness.
As a specialized retailer, what have been your valuable learnings and experience?
Some of the learnings based on my experience gathered over the years as a specialized retailer include:
• Identifying our core strength with right kind of product mix
• Not to underestimate or overestimate the market
• Right positioning of the brand without diluting the identification/strength of the brand
• Not to deviate/ diversify on the basis of any market temptations
Any noticeable consumption trends for the products in your store that you would like to mention?
The market is always prepared to pay a nominal premium if only we can deliver quality products consistently. Thanks to the country’s rapid economic growth till 2014-15, consumer spending and confidence was noticeably buoyant. However, we have observed, especially in the past three years that the purchasing power of the people has come down as the earlier pace of economic growth has slowed down.
Which are the interesting concepts or innovations you have introduced at your stores in terms of merchandising strategy, inventory management, etc?
Since our average store size is about 1,200 sq.ft. and about 30-35% of the products are private label, there is not much scope of innovation in terms of floor plan, merchandise and display. Our real innovation lies in the product mix and assortment that we sell. We always try to sell products that are normally not available in the supermarkets and we don’t stock the kinds of products that shoppers would find on supermarket shelves. We carry only products that offer a value addition to our customers and nor do we carry multiple brands in each category.
Can you share some insights about how you push the boundaries of price-value-quality equation?
Since our strength is retail, to a certain extent we know at what price bracket a product can sell volumes. From time to time we organize promos by giving a price off on products or undertaking wet sampling of the products.
Our real innovation lies in the product mix and assortment that we sell. We always try to sell products that are normally not available in the supermarkets and we don’t stock the kinds of products that shoppers would find on supermarket shelves.
What’s in store for the future by way of your expansion? Will you concentrate on growing online or taking your store count up?
We are quite bullish on our offline model for at least another decade or so. But simultaneously, we are also ramping up our online presence and would also like to grow in that segment if it is commercially viable. As far as our store count is concerned, we do have plans of going to Hyderabad & Bangalore later this year.
Tell us about your efforts and initiatives to beef up your omni-channel presence?
So far we haven’t spent even a single rupee on digital ads, but going forward we may start with some small initiatives and go for a few experiments and take a call on reviewing our online strategy.