These 7 Entrepreneurs Tell the Secret to Build a Consumer Brand
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.Ever wondered why VCs are so keen to put their money behind consumer startups as opposed to others? Simply because it’s easy to sell differentiated products. Entrepreneur spills the secret sauce of building a great consumer brand and why it would emerge as the biggest trend of 2019. The following pages feature some of the leading consumer brands sitting on billion dollar opportunities.
The Fresh FMCG Seller (PC Musthafa, CEO and Co-founder | iD Fresh Food)
When the whole world was talking about increasing the shelf life of food, there was one company that didn’t believe in it. It was focusing on selling fresh food. When all the tech food delivery startups' core focus is to enable you to eat food from outside, this company takes you back to the kitchen. It does’t let you find ingredients in your kitchen and spend hours getting the recipe right but it offers you options, which are ready to cook and that too without preservatives — all natural. Started in 2005, as a little establishment in the bustling streets of Bangalore, iD Fresh Food has come a long way. Today, the company is funded by Premji Invest and Helion Venture Partners, and has a presence in 24 cities across India and overseas, with a team of more than 1500+ employees.
The company provides 55,000 kgs of Idli/Dosa batter per day, with other yummy products like Parotas, Vada batter, Chapati and filter coffee among others. Musthafa PC, CEO and co-founder of iD Fresh Food shares, “From day one we decided to give the unbranded pouch a brand name. Our packaging stands out in the market. We cover 20,000 stores everyday with our own 300 vehicles on a daily basis.” Being a fresh FMCG company is not enough, we realized it after speaking to iD as it’s a company run on IT. To sell fresh, they have to deliver fresh. They geo track every store to plan their supply chain.
Musthafa says, “Idli business is no rocket science without entry barriers. Innovation is the key to build a large business and stay ahead of the competition. To create best idli, you need the best batter. If you skip that you don’t get the right product.” The company invested not just in great grinders from Germany but also bought ERP solutions from SAP. They began with a 50 sq ft kitchen selling 100 packets in 20 stores and then there came a time when they were not able to scale it up neither to other cities nor to other products. Cash flow was getting tough. It was difficult to pay salary to employees.
“When we started expanding business in Chennai we started making losses,” shares Musthafa. That’s when they received their first round of funding from Helion in 2014 that helped them scale up. Today, the brand has diversified into new markets like Mumbai, Pune, Hyderabad, Dubai and brought professionals to run operations. The core team, which are all in the family continue to focus on innovating newer products. After its first funding iD Fresh started spending on marketing. “Our last year marketing spend was less than Rs 6 crore. You can’t build a brand through advertisement. Our product is our hero,” claims Musthafa.
In fact, for its newer products like filter coffee the company spends almost 12 percent of product cost only on packaging so that aroma remains intact. After receiving funding from Premji Invest for Rs 150 crore, the company started setting up a bigger manufacturing unit. Its aim in the new year is to spend on operations in north India. Talking about its revenue, Musthafa says, “We will be closing this FY at Rs 250 crore and aim to do revenue of Rs 1000 crore in the next 4-5 years.” The next extension for the brand would be organic foods, super foods and multi-grain.
Taking Baby Steps Towards a Toxin-Free World (Varun Alagh- Co-founder | Mamaearth)
The combination of consumer tendency and the advent of certified safe brands like Mamaearth have caused ripples, compelling MNC brands like Johnson & Johnson to completely reformulate their products and launch a toxin-free range without sulfates, dyes, and parabens. However, their products still continue to have talc, mineral oil and artificial fragrance.
Founded by husband and wife duo Varun and Ghazal Alagh, Mamaearth is Asia’s first Madesafe certified brand that offers 100 percent toxin free and natural baby and mama care products. The idea of founding Mamaearth came from the duo’s personal need of finding chemical-free products. With Mamaearth’s innovative product line, Varun and Ghazal have solved a common Indian parenting problem. In a country where most of the baby products available are not safe due to the lack of safety regulations, Mamaearth offers products, which are safe by international standards and are filled with the goodness of nature.
The year 2018 saw Bollywood actor Shilpa Shetty Kundra come on board as an equity investor for Mamaearth. Alagh, says, “With her personal involvement in Mamaearth, we expect to take our brand’s message of toxin-free parenting to a much larger audience. We already have more than 100K happy consumers across 121 cities and we expect to reach 250K consumers by the end of this year.”
Varun's five pointers:
1 . Have a clear brand purpose. It's the era of purposeful brands and a good brand purpose will not only attract the right consumers but also act as a compass to make the right business decisions. Ask yourself ‘why do we exist’ and ‘why will consumers miss us if we are gone.’
2. Start small, always try and choose a smaller impact area or TG to first ascertain product market fit and once you are confident invest in scaling up.
3. Fail fast and fail often, do not be afraid to experiment. Always allocate some expense in your head for experimentation without expecting any returns from the same.
4. Use e-commerce and digital before you think of any investment in the offline space. It's more targeted and has clear ROI metrics.
5. Always have a clear unit economics for your product. You must know your P&L and key ratios like GP, CM1 by heart for all product lines.
The Vegan Beauty Trendsetter (Shankar Prasad- Founder and Director | Plum)
While there are some who believe that everything is a commodity and brands are passé, Shankar Prasad belongs firmly in the pro-brand camp. The consumer experience goes beyond the physical aspect of what the product offers — it's the emotional connect with the brand that separates great experiences (and hence great brands) from the rest. Having said that, the story of “Plum” and “Phy” brands is still very much work in progress.
Prasad says, “To me the first step in brand-building is consumer understanding. You have to learn as much about your consumer as possible and not just about how they interact with your product. How they think, what they value, what they like and don't like — there are so many dimensions one can think of, that are not product-related. Identifying our target audience and understanding them deeper is what counts - and this is not a one-time activity, it is an everyday task.” The ideation part is both challenging and rewarding. Every aspect of the product has to fit and go along with the brand and the concept.
He claims, the formula, packaging, fragrance, photography, the name — when all of these fit with the overall brand promise and what the product claims, only then things fall into place and you see magic happening. And that is extremely difficult to achieve. Plum is a digital-first beauty brand, featuring a fresh line of award-winning 100 percent vegan beauty products that’s all about “being good” - to your skin, to your senses, to others and to the environment. The startup has raised an undisclosed amount to further accelerate its growth in India’s burgeoning beauty and skincare market.
This investment by Unilever Ventures will help the company scale up its operations both in the online and offline spaces and is in line with its vision to transform the way India looks at skincare and beauty products.
Brand that is Raising the Bar (Ankur Jain - Founder | Bira)
Groomed in the US to take up challenges faced while establishing a business enterprise, Bira’s founder Ankur Jain after selling off a fairly successful healthcare startup in the States, joined the Reliance retail team in 2002, in a bid to take the stock of the Indian market. But his masterstroke came when he pitched the idea to his colleague at Starbucks in 2015.
Ankur decided to enter the Indian market with The Beer Café. Since the company did not have any reputation, he could experiment with the image of the brand. “We did not have a legacy to preserve like Kingfisher. Thus, we imported 20-30 flavors that were not available in India and tried to assess the taste of consumer. We had a lot of room for experimentation since we had started with a clean slate,” Ankur says. Since the millennials account for a major chunk of beer consumption, Ankur had plans to tap the most uncertain consumers.
“Apart from giving the normal kick from the liquor content, we tried to associate the brand that consumers could relate to as their own — a brand of modern India,” he says. Bira as a brand name has that ring to it, which makes it synonymous with beer and has a ‘cool’ tone to it. Also, Bira in Punjabi means elder brother and in Bengali it means the brave one. Moreover, it has become the go-to brand for many, ever since it hit the market. A computer science graduate, he knew the advantages of being tech-savvy and used his knowledge to tap the millennials. He subsequently inked a pact with food tech giant Zomato in order to market the beer.
“The packaging of the product was a bit distinct, which could break the clutter and be youth-friendly. It represented a unique, modern India,” he states. This was done to dissociate the brand from the stereotype that comes with the beer brand. “We were just trying to figure out the taste that would gel well with the consumers,c he adds. He promptly responded to the feedback he received from consumers and tried to incorporate their suggestions wherever necessary.
The Right Blend (Bala Sarda- Founder | Vahdam Teas)
The Delhi-based Vahdam Teas was founded by tea entrepreneur, Bala Sarda, in 2015 with a vision to provide garden fresh teas directly to consumers across the world. The brand procures fresh tea from over 150 plantations across Darjeeling, Assam, and other parts in India, including Nepal. It ships over 100 million cups within 24-72 hours of production to over 85 countries through their online portal.
Bala strongly believes that consumer brand building in today’s age is about authentic storytelling. And consumers, especially the millennials, love a brand with which they can strongly connect with. Their brand building story has been built on three key elements. The first being unique brand story and values. Bala says, “I think the origin, vision and mission of the brand is the single most crucial thing to create a long-term connect with your potential customer in today’s age. If you as a brand care about the environment, your potential customers too have a similar concern, then there will be a better connect.”
For Bala, brand building is personal. Consumers today are bored of perfect brands. And mostly, end up distrusting them. They trust a brand, which talks about the personal story of the founder or the team and humanizes the entire experience. The third is the direct consumer approach. Millennials strongly believe in the entire farm to fork, factory to doorstep, garden to cup story. They absolutely hate middlemen and they love great customer experiences. “I think in today’s age, every brand needs to focus on creating a shorter supply chain, create supply chain transparency and ensure an absolutely seamless customer experience across channels,” Bala explains.
Keeping the Freshness Intact (Anuj Rakyan- Founder | RAW Pressery)
Honesty is the best policy. A simple adage, yet effective for Anuj Rakyan, founder of beverage brand RAW Pressery. His simple ideal expanded his business from suburbs of Mumbai to 14 Indian cities with operations in the Middle East on the anvil. Showcasing an exponential annual growth of 100 percent, Rakyan has managed to ensure that the product maintains its quality. Rakyan says that he was able to grasp what millennials want and that is what makes his brand stand apart from other FMCGs.
Rakyan was struck by the model of dabbawallas reaching out to consumers and handing them food personally. “Following a similar pattern, we reached out to consumers at their doorstep. It is a subscription-based business model, where we worked with dabbawallas. This instilled a feeling of trust in our delivery mechanism unlike the food-tech delivery sites like Zomato and Swiggy,” he says. Rakyan has personalized the design of the packaging. “Millennials enjoy that,” he chimes in. His mantra of success is thinking from the perspective of consumers rather than laying emphasis on sales. “We surveyed close to 5,000 people about what they wanted in a juice — they all wanted fresh juice,” he firmly says. Rakyan emphasizes the after-sale experience and weaving a story around the product are both important aspects of brand-building. “The consumer should get a user-friendly experience as they spend a lot of time on Internet,” states Anuj. There are certain products in the stream of eco-friendly and sustainable arena that appeal to the millennials. The distribution is carried out directly to consumers’ homes, which brings about a personal touch. They reached them digitally through online platforms or apps. However, the founder admits that the brand is at the nascent stage, but with multi-growth prospects. “Our brand comes under the purview of serving directly to homes,” he adds. The secret of his product is pure science.
“Food items go stale due to bacterial attack. We can avoid it by pasteurizing the product. During the process food item loses taste and nutrients, so we eliminated the process and pressurized the bottle at pulsating frequency to avoid the growth of bacteria,” he claims. RAW Pressery manufactures an array of products ranging from juices, smoothies to coconut water. “We have green juices, which are made of vegetables. Sugarcane juice is nostalgic but the consumers avoid it because of hygiene issues. We worked on these problems,” he says.
Dairy Entrepreneur's Sweet Success (Rohan Mirchandani- CEO and Co-founder | Epigamia)
Epigamia is an upcoming new-age FMCG company in India, which markets branded fresh consumer products. With innovation acting as its fuel, they are constantly pushing boundaries by crafting contemporary versions of traditional foods. With its first launch, Greek yogurt, they managed to bring out curd’s full potential by straining it to boost the protein content and infusing it with real fruit to stimulate the taste buds. “We pride ourselves on the fact that despite Greek yogurt being a global concept, Epigamia has a very Indian DNA: all our ingredients are sourced locally from India – mangoes from Ratnagiri, strawberries from Panchgani and so on,” says Rohan Mirchandani.
Since then, they have launched many products that have pushed boundaries, be it the amazing burst of taste and texture, when crunchy granola meets yogurt in Epigamia Snack Pack or launching the first-ever lactosefree range of curd and Mishti Doi in India or even the lactose-free Greek yogurt smoothies. Currently, the company is selling approximately 3.5 million units per month with presence across 10,000+ outlets in 20+ cities. Currently, it’s selling through e-commerce websites like BigBasket and Amazon, and retail chains like Godrej Natures Basket, Future Group, Reliance Retail, D-Mart; also through hotel chains such as Taj Group, Crown Plaza, Marriott and Westin.
(This article was first published in the January 2019 issue of Entrepreneur Magazine. To subscribe, click here)