Pop It Up
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O f late cinema-goers could only catch a whiff of the smell of fresh popcorn popping out of the popcorn-maker at multiplexes and single screen-theatres. Indeed, without the 'good old' bucket of popcorn, the experience of immersing oneself in the cinematic world up on the screen remains incomplete. But that’s passé.
Popcorn now has become one of the most popular snacks, no longer a complementary companion to be munched whilst watching movies, sports or your favourite show. It is thus, one can find this humble snack everywhere around — from Indian kiraanawaalas, fancy stores in malls to various online platforms. And it’s not about sweet and salty anymore, popcorn comes in different types of flavors. A testimony to the growing popularity of popcorn is the emergence of a slew of popcorn businesses. What more? The snack even found a place in Oprah’s famous list of favourite things she releases every year.
Globally, brands like Garrett’s popcorn have actually inspired many Indian popcorn brands. Other brands like Doc Popcorn, Popcorn Shed have also made it big with multiple franchises spread across America. A lot of credit for the rise of popcorn business in India can be attributed to Garrett’s, which changed the image of popcorn from a snack meant for binge-watching movies to a great gift you can give your loved ones. With holiday specials and Christmas tins flashing the festive spirit, their packaging itself declares it. The same concept for packaging has flowed into the Indian market as well, where colourful and quirky tins reign supreme.
According to a report done by Allied Market Research, the global popcorn market is projected to reach $15billion by 2023, registering a CAGR of 7.6 percent from 2017 to 2023, with ready-to-eat leading the segment. While established FMCG businesses have either launched a popcorn product or are looking to launch one, startups too have built ready-to-eat or ready-to-cook popcorn brands in the domain. It would be futile to undermine the potential this industry has.
THE GOURMET SAGA: SWEET AND SALTY NO MORE
So, what’s got everyone interested in the popcorn industry? There’s one answer – Gourmet popcorn, which evolved to be the “it” snack, one that also finds a place in the elite group of the snacking business. One of the first businesses to set the love for gourmet popcorn rolling in India was 4700BC Popcorn — co-founded by Chirag Gupta and Ankur Gupta, who studied to be engineers but ended up being entrepreneurs. The duo after travelling abroad, did market analysis of products that did well globally. They found it surprising gourmet popcorn topped that list and even more surprising that it had no presence in India! So, they brought gourmet popcorn to India, but it wasn’t an easy task. They had to import the machines from the US and set up a small “mini-kitchen” in Delhi. It took them one and a half years to perfect the product and launch their first store.
Today, 4700BC Popcorn has presence across India with 22 stores. The business has evolved and grown, the brand has introduced multiple new flavors. They have a production facility of 25,000 sq ft in Sonepat, Haryana, where they produce 35-40 tons of popcorn in a month.
Both founders come from different backgrounds – the former comes with an experience of handling traditional business while the latter has experience in consulting business. “That became the perfect balance — I manage the front-end while Ankur who has experience of doing traditional businesses of managing the Indian labour brought in the on-ground expertise,” says Chirag, while adding, “The initial reaction was great. We hit the savoury and sweet category evenly. The trick was that we kept everything, which would be closer to Indian tastebuds yet sounding very international. So, we made the product sound exciting and premium yet best suited for the Indian taste palette.”
Diksha M Rai, co-founder of The Crunch Box, is another entrepreneur who was lured by the love of popcorn to start a business of her own. She took a sabbatical from her job at American Express and tried her hands at running a travel agency. She travelled a lot and discovered her love for caramel and gourmet popcorn. Then she decided to get into the business, her co-founder Priyankar was the perfect fit for he came from the movie distribution business.
Rai says that popcorn sales are much higher now than other snacks in the industry as it is a versatile product and comes in many flavors. The Crunch Box has partnered with Indigo Airlines, at the cinemas with Cinepolis, in hospitals with Fortis, at Coffee shops with Barista, and is on the in-house menus of many premium hotels like Hyatt, Taj, Lalit, Marriott,Cidade-de-Goa etc. “This huge volume of work within six months of our launch in December 2014 meant we had to increase our production capacity to almost three times to cater to airlines, cafes and hotel businesses,” says Rai.
Gourmet is also what got everyone hooked to the snack even on the eastern side of the country. Childhood sweethearts Rahul Pandey and Sonal Bhotika started Batcaves Popcorn when they were just 24 as they wanted to introduce something new to the city of Kolkata. To keep up with the trendy snack of today’s age, they started their business and today, they are supplying to theatres in the North East too. “We have an edge in the eastern market as we were one of the first brands to launch gourmet popcorn,” says Bhotika.
Even family businesses like Modi Naturals, which has had a good run in the gourmet business is experimenting with popcorn, albeit with a ready-to-cook product. Traditionally, a B2B company and once one of the largest processors of rice bran oil in the country, it began a B2C vertical by launching Oleev, with which they took olive oil from the gourmet olive oil shelf to the everyday use shelf. Now, they aim to do the same with popcorn. Starting-off with a ready-to-cook brand called Pipo. Talking about the product, executive director, Modi Naturals, Akshay Modi says, “Of course, ready-tocook and eat are different products. Ready-to-eat is more convenient snacking. Ready-to-cook has a great potential to grow. You have the likes of the instant noodles of the world – which have almost become staple food at some places. Now, ready-to-cook popcorn can replace the instant noodles of the world, as it’s a healthier snack too.”
They piloted with Pipo a few months ago and their sample research showed that parents let kids have popcorn as a snack more often than they are allowed to eat other ready-to-cook products.
THE HEALTHY WAY
The snack’s ability to be guilt-free because of its health appeal has brought it a lot of fans. And it is this health quotient that brands are latching on to. Rai explains that the snack industry has seen a massive growth and upshift in its consumption patterns. “There are many types of snack categories for shoppers to choose from. There is an overall demand for ready-to-eat and on-the-go foods. However, popcorn being a totally natural product is a much healthier option than most things available. It is whole grain, gluten free, full of fiber and packed with antioxidants,” she says.
When Prashanth Gowriraju of Timla Foods started Popicorn, he knew that it was this health potential that will lead the popularity of popcorn. Gowriraju explained that eating popcorn is one of the healthiest snack habits as it fills you with fiber, and has more antioxidants than fruits and vegetables. “It's the perfect dieting snack. High-fiber foods take more time to digest than non-fibrous foods, so they keep you fuller longer. Snacking on air-popped popcorn in between meals canhelp you crave less for sweets and fatty foods. Just don't load up on butter and salt,” he says.
Today, Popicorn is producing more than 200 tons of popcorn every month and selling all across India in over 10 different cities, with presence in major retail stores like Hypercity, Metro, Trent, D’Mart, Reliance, Heritage, Future Retail, Food World, ABRL, Future Retail etc.
The popularity of popcorn as a snack is growing across the country and can be seen as more and more retail stores are increasing the number of ready-to-eat popcorn packets kept in their shelves. Gowriraju says, “There is a massive untapped opportunity to gain market share in the nutritious, portable and easy-to-eat meal alternative market that snack manufacturers could fill.”
Investments too have been pouring into the sector. 4700BC Popcorn made news when the massive movie theatre chain PVR decided to pick up a 70 percent stake in the business. Meanwhile, Popicorn is backed by Kae-capital and recently raised $2 million in debt financing.
So, what’s got the investors interested in the business? For 4700 BC Popcorn, the investment from PVR seemed like a natural step where the startup was looking at expanding its base and PVR was obviously interested because popcorn and cinema go hand-in-hand. “There’s no better favourable snacking product than popcorn and it’s rated higher than chips too. The investors know that the consumption pattern is really good, but what they really want to see is the execution of the product. There are a lot of great products out there, but execution is what matters,” says Chirag.
Asked why Popicorn interested his firm, Navin Honagudi from Kae Capital says, “Our investment thesis was twofold. Firstly, popcorn category requires least customer education since they are aware of the product and secondly, this was a large whitespace in the market as no one offered popcorn at convenient distribution points and affordable prices.”
Honagudi believes that there is a large potential for the popcorn business in India given this could be a strong alternative to the existing chips and snacking market. He adds that the market is still nascent in India while globally there are several unicorns in the space.
KEEPING UP WITH THE KERNEL
The business, however, is not bereft of challenges. Keeping up with the consistency of the popcorn is one big challenge that the industry faces. Popcorn has great health benefits but it would only sell if it has the right crunch and texture. When you are building a brand, packaging becomes an important task. From funky and quirky names to colourful packaging boxes, being in the popcorn industry means serious business with a fun twist.
“We really had to work hard and think out of the box to design a liner carton. Any liner carton is generally associated with very expensive and premium products because of its cost factor and designing,” says Rai.
Another challenge in the industry is to find the right price point. Modi explained that as the import duty has gone up and good quality kernel is imported from South America, it is a task to keep the pricing at a minimal range. The trick now lies in introducing more occasions for popcorn. A box of popcorn in a festive hamper is an idea that’s selling like hotcakes now. Pandey says that popcorn as a gifting idea was not popular two years ago but it is all the rage now. The duo take in corporate orders that are going up in numbers and say that it’s only set to increase. “We are creating a parallel between popcorn as a snacking essential and popcorn as a gifting product,” says Pandey.
The Crunch Box also has tie-ups for events and gifting with Corporates like Japan Airlines, Make my Trip, Spice Jet, WeWork, ICICI Bank etc.
The popcorn industry in India is on the road for fast-paced growth, moving across barriers. Withmost businesses looking at expansion in the country, it’s not long before popcorn becomes the new 'chips' of the snack industry.
(This article was first published in the December 2018 issue of Entrepreneur Magazine. To subscribe, click here)