First-gen foodpreneurs
pack OLD VADA
IN NEW PAV
Barring a Haldiram or a Bikanervala, most desi snacks and
beverages
have stayed in the unorganized sector, sold by vendors using
ancient,
unstandardized methods.
Several entrepreneurs are trying to change that by using global practices
to sell Indian street food
Green
mangoes are hard.
And no
one knows this better than Neeraj Kakkar, co-founder of Paperboat.
Hector
Beverages, the makers of Paperboat, has been selling its aam panna
drink
(green mango juice flavoured with roasted masalas) for a while.
Green
mangoes are notoriously hard to process because they are tough,
and
Kakkar says his team had to innovate extensively to make Paperboat's
aam
panna flavour taste like its fresh, home-made version.
“So
our biggest challenge is today our biggest advantage. Nobody has done
this
kind of thing before and it is difficult to replicate,“ says Kakkar.
Paperboat
now boasts an array of 10 distinct beverages including jaljeera,
golgappe,
kokum and chilled rasam. Many more innovative products are
under
development including coconut water and the juice of purple carrots.
The
company, which opened its biggest factory in Mysuru a few months
ago,
works with agricultural universities and farmers across the country
to
figure out best practices, as they break new ground on products.
Across
the country , entrepreneurs are picking up traditional Indian food
and
beverage products to challenge Western imports like colas and
burgers.
In some cases they are reimagining the products and offering
innovative
variants. Mr & Mrs Idli and Idli Factory offer exotic stuff like
Idli
Manchurian, Kanchivaram Idli and Punjabi Idli. Faaso's, with funding
from Sequoia
and Lightbox, and Kaati Zone do a variety of Indian rolls,
including
Cheesy Corn Salsa and Chicken Mushroom.
In
other cases, they are using technology to make the products at scale
and
sell them around the country , the way McDon ald's and KFC do.
Ammi's
Biryani, with funding from Saif Partners, is doing that with
biryani,
as is the Hyderabad-based chain Paradise which is opening
outlets
in cities like Bengaluru at a fast clip. At Paradise, the self-service
counter
is clearly modelled after the McDonald's and Burger Kings of the
world,
with combos and packages and easy-to-select options.
Similarly,
Jumboking pioneered the organized vada pav business, and
was
quickly followed by Goli Vada Pav, which has received funds from
Ventureast.
Dheeraj
Gupta of Mumbai initially dabbled in the Indian mithai (sweet)
market. But the technology needed to keep
sweets fresh was expensive
and
since the venture wasn't very profitable, Gupta was finding the going
difficult.
He looked at India's streets and realized how disorganized the
vada
pav business was. “Vada pav was the largest selling snack in Mumbai
but no
one had thought of organizing that segment,“ he says. He borrowed
Rs 2 lakh from his father and founded
Jumboking.The venture is about to
open its
100th store and is present across the top eight cities in the country.
The
company charges a 30% premium on vada pavs compared to the
street
pavs. It also focussed on the bread size, weight and size of the patty
and
eliminated wastage. The patties needed instant quick freezing at minus
18
degrees centigrade, and with hygiene a priority for Gupta, he invested in
the
required technology .
Hygiene
is a big focus for most, because for many middle class Indians
today,
that's the concern they have about food offerings from the unorganized
segment.
“Tea is available in all corners of this country but our focus is the
white
collar corporate employee in the top seven cities who are conscious
about
cleanliness and consistency,“ says Amuleek Singh Bijral, founder
of
Chai Point.
Most
tea joints in India end up being smoking joints, which discourages
nonsmoking
customers. Chai Point does not allow smoking and so enjoys
a
broader clientele. The average price of a glass of tea at Chai Point is less
than
Rs 20, less than a fourth of the price at leading cafe chains, and is
designed
to drive volumes.The company's 50 outlets sells more than three
million
glasses a month.
Hygiene,
comfort and innovation is also the focus of Chennai's Idli Factory
.“My
biggest driver is to create food for travelling, which means comfort
food
that is well-packaged and easy to carry,“ says R U Srinivas.
The
company's flagship product is its `Madras bars' which are idlis shaped
like
bars coated with powders such as milagai podi, garlic podi and curry
leaf
podi. Srinivas researched and tested 300 different batters before
arriving
at the best combination of rices and dal to create idlis that
would
remain soft and fresh even after they are cold.
Arvind
Singhal, chairman and MD of retail consultancy Technopak, says
native
food offers great opportunity in terms of revenue. “Indian food has
long
been neglected,“ he says, and appreciates startups like Chaayos and
Chai
Point that have leveraged Indian tea rather than going after coffee,
like
many others.
Singhal
also notes that many Indian startups in this space fail because
they
complicate their menus by adding too many different items.
Keeping
it simple helps with handling the supply chain, quality assurance
and
faster service across all outlets, and in keeping prices low.
Bijral
of Chai Point agrees. While expanding his food variety option looks
enticing
-currently it contributes 25% of topline -Bijral wants to reduce it
to 20% and focus even more on tea. “Let
others sell food,“ he says.
Idli
Factory also has a skeletal menu, and Srinivas intends to keep it
that way. So does Jumboking's Gupta, who
notes that multinational
food
chains too stick to a narrow menu but offer different versions of
that
menu. “Once this mindset (to complicate menus) changes, it will
benefit
a lot of entrepreneurs,“ he says.
But
that strategy could have its limitations too. When Mohan Kumar,
partner
with Norwest Venture Partners, received a request from a food
startup
for investment, he analysed a number of companies in the space.
He
found that some 25 companies in the space had touched revenues of
Rs
200-300 crore, but then stopped growing. “Probably there aren't enough
categories
to scale up and these companies tend to get acquired by bigger
ones.
Big Indian players like ITC and Marico understand the market well.
Some
of the MNC competition too could catch up,“ he says.
Jacob
Kurian, partner at private equity fund New Silk Route, which has
invested
in Bengaluru-based Vasudev Adigas, a south Indian food retail
chain,
feels that Indian food businesses tend not to grow beyond the local
area
as the promoters tend to be contented at a certain size.One exception,
he notes, is Haldiram.“The skill set needed
to grow till Rs 200 crore and
to
grow beyond that are different,“ he says.
Kurian
also notes that unlike the earlier family-owned Indian businesses,
those
like Paperboat and Chai Point are not family businesses and don't
have
legacy issues. “Let these guys reach around Rs 200 crore and then
we
will see,“ he says. That could happen if the brands can go into smaller
towns
or even global. Paperboat's Kakkar is not sure if his drinks can be
as
popular as Coke in small towns. But he notes with some satisfaction:
“Cola sales are declining globally.“
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Friday, November 27, 2015
FOOD BUSINESS SPECIAL....................First-gen foodpreneurs pack OLD VADA IN NEW PAV
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