Successful entrepreneurs in the food business share ideas on how to innovate, grow, build a lasting appeal for products and brands and become a market leader and trend-setter…
Home-grown food brands, long used to playing second fiddle to multinationals, are at last emerging out of the shadows. Their success run is a reflection of the consumer sentiment turning in favour of all things that are genuinely Indian.
Here are three success stories of homegrown brands that are blazing a trail at home, whose able stewards shared the milestones of their remarkable journey at a session at India Food Forum 2017.
In a short span of time, the company has grown to become one of the largest online grocery players in the country. According to Co-founder, Grofers, Albinder Dhindsa, “The initial part of the scale-up, till July last year, was purely driven by the marketplace. We had a tie up with grocery stores, ranging from the local kirana shops to the established players like Reliance and HyperCITY. We would list all the inventories from the stores to our app, and have them delivered to the customers as and when the orders were placed by them through the mobile app.”
A quick ramp up: In just nine months from the launch of the app, Grofers was doing 10,000 orders a day. “One of the advantages of not being a brick-and-mortar player is that you can go for the reach, and we reached a large number of orders in a short span of time,” said Dhindsa.
Challenges and the shift to inventory-led play: “Fulfillment of products, especially fresh fruits and vegetables, was a big challenge with the surprising surge in the volume of orders. Our merchant base failed to meet the demand consistently. It was difficult to manage all the orders as we were growing and we weren’t able to control the customer experience to the extent we wanted. So we decided to start our own fulfillment centres and warehouses and became an inventory-led player,” said Dhindsa, explaining the motivation behind shifting to inventory on-demand grocery model from the marketplace model it was following earlier.
Today, Grofers has 800,000 square feet of warehouse space that operates out of ten cities and the company stocks anywhere between .2 million to 20 million products at any given point in time. To ensure they deliver on quality, heavy investments were made in procurement and processing of raw fruits and vegetables.
“While our fill rates went up to 99.8 per cent from 80 per cent, the biggest impact it has had is on the customer satisfaction. Along with the quality delivered, the fill rate has increased 40 per cent since we moved from a market-based player to becoming a heavily inventory-led player,” informed Dhindsa.
Key Learning: Controlling the customer experience in an online service is very important. “When you are in a competitive market and your customer experience is not as good as the other guy, you are going to lose,” said Dhindsa.
Yumist is a food delivery player that operates in the daily meal space and is based out of NCR/ Delhi. While there were developments in the F&B space, there wasn’t much happening in the category of daily meals. Yumist is trying to fill the gap by building a technology powered F&B brand that provides consistent quality and a wholesome experience to the customer.
Founder & CEO, Yumist, Alok Jain said, “The daily meal space is a 50 billion dollar market, though largely unorganized and surprisingly there wasn’t a single Indian brand in the fray. The category lacked quality, it lacked convenience and was price-conscious, so we decided to solve this problem and that is how Yumist came into being.”
Starting out in July 2014, the company has gone in for multiple iterations at every stage of the business. This was all done to build a brand and a business model that is capable of quickly catering to a large segment of customers at significantly lower costs through the smart use of technology.
“We wanted to create a business, which has 30 per cent margins, provides quality food for Rs 80 and comes with no delivery charges. It was a challenging prospect. But we were ready to use technological ingenuity and innovate at every level to create a sustainable business model that creates profits for the stakeholders and delivers a great experience to the customers,” said Jain.
• Food tech is not merely an app. In today’s world, if a food brand has to sustain itself and become a bigger brand, it has to be technology enabled.
• In the F&B space, consumer demands and needs and the business realities have changed.
• “The consumer today wants better quality and quality doesn’t alone come from the food but the entire experience. So you better tech enable your supply chain, payment systems, your delivery and dining experience, etc, else you will be left behind,” stressed Jain.
• Employ the right mix of innovation with strong business sense in order to attain long term sustainability and scalability.
• Understand the Indian problems on the consumer front and business reality front and innovate without cutting corners.
• Brands of the future are going to be those that realise Indian problems require Indian solutions and act to solve them without compromising on quality of the product.
“At Yumist, we have one food factory and our supply chain caters to the entire city. We cannot have multiple kitchens but one kitchen that’s going to cater to the entire city, so we decided to challenge the supply chain. We innovated constantly to limit our CAPEX and OPEX at our delivery outlets without importing solutions or business models from outside and applying them wholesale. Technology is there to help us reduce the costs, to help us increase our average order values, to provide a great customer experience but at the end of the day, it’s the food that you are serving that is going to speak the most because that is your product. Ensure product quality and consistency,” exhorted Jain.
The ubiquitous chai, which is the most consumed beverage in the world, has been around for ages in India. And Chai Point has succeeded in tapping this understated product and it has built a brand around it by providing high quality, freshly-brewed and authentic taste of tea across India.
“Indians love their tea and their tea breaks but there was no organized player that was serving hygienically prepared tea, which was consistent in quality and taste to customers. There was a gap and we wanted to bridge that gap by modernizing and offering a refined experience of drinking tea to our customers,” said VP, Marketing, Chai Point, Yangchen Lachun.
“Excellence in basic things will inspire excellence in everything,” spelled out the clarity of the brand’s purpose and how it intended to make a difference without compromising on quality. The company took inspiration and learnt from the best in the business like Starbucks – for what it had done with coffee in America; Elon Musk, for how technology can be used to better lives, and Indigo, for how it worked relentlessly to deliver its promise of reliability to its customers.
Lessons: Consistency in providing quality, taste and service to the customer is what brings the customers back.
For ensuring quality, the company has a strict control over the central ingredient, which is tea. About 7,500 kg of tea is bought every month, which is certified a tea advisor. Other key ingredients like lemon and ginger are freshly squeezed and powdered in the stores to make lemon tea and ginger tea. Each brewer is trained for 120 hours rigorously before they hit the stores, in order to maintain consistency. “By creating an authentic product with natural ingredients, we believe we can create a great chai experience for our customers,” said Lachun.
Chai Point took an Omnichannel approach to reach across mediums, online, offline or mobile and make the tea accessible to the customers. It uses BoxC-IoT enabled tea dispensers to deliver tea on a daily basis in corporate offices and path-breaking use and throw heat-retaining disposable flask for chai for home deliveries, which are contributing majorly to the brand’s popularity.
“Our tagline reads, ‘India Runs On Chai’ and we want to be accessible to anyone who wants to drink chai. Our Omnichannel approach helps the company deliver on accessibility and convenience, which is further backed by technology and innovation. So whether you are at airports, malls or simply walking outside on a street, you can order and get our chai,” said Lachun.
Key Learning: The moment of truth is ultimately the final product and how the customers feel about the cup of chai. With 3 lakh cups of chai sold every day, Chai Point has certainly got the customer endorsement.