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SmallMeasures to Big Success

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The specialty grocer building his/her business on niche products, has a special attraction for consumers looking for quality products and an engaging shopping experience where their preferences and requirements will be heeded.

The Gourmet Jar, Delhi

Store size: 140 sqft  Year of start: Oct 2013  Average bill size: Rs 900
Target audience: Women aged 25-50, well-traveled, food connoisseurs
Expansion plans: E-commerce and stores in other cities

When Apeksha Jain launched a super specialty store that sells only pure hand-made jams and jellies, she had no prior retail experience. But she soon learnt that customer sampling can work wonders.

The launch

“I launched The Gourmet Jar in May 2012, and was delivering to customers directly from home, During the first year, I took part in several fairs, where I would encourage customers to sample the products. The kind of flavours I have are new to the Indian palate. Even those who said, “I am not a jam person” would end up buying after tasting the jams.  I realised that a permanent physical space where people can experience the products and understand the brand would be necessary if I had to grow my business. I also felt that a store like mine, one that is  exclusively for jams and preserves, and which is very common in Europe, is not present in India. I launched The Gourmet Jar Confiture Shop in Shahpur Jat in Oct 2013, and it took me about 3-4 months to execute the idea, right from scouting for a location, signing the lease, and getting the store and stock ready.

I do only seasonal flavours so the range keeps changing every few months. But typically, at any given time, I have 6-7 different flavours available, along with samples for each of them. I also have a little tasting table on one side where customers can sit down and sample any flavour, which makes it very customer-friendly. I have 6 to 7 skus at any given time. The best performing ones would be the Banana Rum Jam, Spicy Onion Balsamic Relish, and the Orange Apricot Whiskey Marmalade.

Challenges and benefits

Finding the right location at the right price was the biggest challenge. After looking at locations in Hauz Khas Village and Meharchand Market, which proved to be too expensive, I zeroed in on Shahpur Jat, which has a niche clientele and lots of small and interesting boutiques. Finding a space on the ground floor was another challenge. Most available spaces were on the 2nd or 3rd floor, and I felt they were not right for a retail store. People are willing to walk up 3-4 stories to a restaurant/bar but for a retail outlet, it is always better to be on the ground floor.

It is very interesting to be operating in such a niche industry. The advantage is that it is easier to focus as the number of variants are not too many. Since my scale of operation is not too big as of now, I can control the quality and ensure that every batch is perfect. I also get to be very creative with the flavour combinations. There are two major challenges that I feel I constantly face: the constant one is having to justify the premium pricing. Indians are so used to cheap jars of jam, full of sugar and chemicals, and hardly any real fruit, that they don’t understand that the cost of a handmade jar of jam, using only real fruit and organic sugar and no preservatives or chemicals is significantly higher. The second major challenge is having to educate people on how to use jams and preserves. Jams are so synonymous with toast in India, that people don’t realise how versatile they are. You can use them in smoothies, salad dressings, marinades, desserts and so much more. But this is one challenge that I quite enjoy.

It has just been two months since the launch of the store, so it is hard to make any significant observation yet. But I do get lots of people making a special trip to Shahpur Jat just to come to the store to buy my jams and preserves, which is very promising. Weekday footfalls are sometimes as low as 7 to 10, while weekends mostly see about 30 to 40 footfalls a day.

Why a specialty store?

In a grocery store, a brand can get lost among several similar products. In a specialty store, a customer can experience the brand and its various products, try them and get answers to their questions from people who knoe the products. For example, many customers ask me about ways of using jams and marmalade, something which they cannot ask in a grocery store.

Learnings

A beautiful display always attracts people. I get inspired from places like Foodhall, which are so neat and well-organised that you feel tempted to buy there. There may be other stores that have all the same products, but if they’re messy and dirty, then it makes grocery shopping feel like a task to get over with.

Retail spaces need to be more beautiful and well-organised, so that they give the customer an experience and not just a product. If they like your product, they will come searching for you, no matter what the location.

Nothing works like sampling! Indians will always be price-sensitive, but they are open to new and interesting products, as they travel and eat out much more now. They are influenced more by word-of-mouth than advertising.

My message

Let’s change the way India eats jams!

Tea Trunk, Goa

Year of start:
Online store launched in June 2013  Average bill size: Rs 500
Target audience: Primarily women between 25 to 42 years, SEC-A and B
Expansion plans: Expand to international markets in 2014, and open a brick and mortar store

When Snigdha Manchandana was studying in Sri Lanka, she realised that in India tea was gravely misunderstood. She operates from the online space and is based in Goa, and plans to have a physical store of her own;  till then her online store is growing.

The launch

It may sound silly but I guarded my collection of  teas from around the world in my dad’s vintage trunk until the day I realised that tea tastes best when shared. Tea Trunk is the home of my teas and their aromatic stories. Tea has been a ritual for over a decade, and even before I formally studied the product, it was a very big part of my life. My father was posted in Assam and in the early 1990’s brought me a pack of green tea that opened up my world of teas. I had teas from Kenya, Sri Lanka, Malaysia, Korea, but while I had a great collection, I barely knew anything about it.

Her early memories go back to her mother putting two kettles to boil on the stove. Tea boiled in one, while the other had carom seeds or mint leaves or lemongrass boiling inside. Manchandana and her sister would dutifully sip on the herb-infused concoction throughout the day. “We grew up drinking these herbal infusions, and I recall times when my mother returned home from Assam with teas, and visits to tea estates. For over a decade, I’ve been consumed by the love of tea. I collected teas in my trunk since my teenage days, and currently my tea treasure includes over 100 exotic and rare teas and blends from around the word. This precious treasure became my inspiration to start Tea Trunk (a boutique Tea Consultancy) – a venture that was about the art of tea appreciation.

Challenges and benefits

We drink a lot of tea, but not necessarily the best quality or for the right reasons. It’s important to know the difference between good tea (which comes with health benefits) and what most people think is good tea. Our first challenge was to change the perception of tea for the youth and make it appealing to them. This a progressive change. It was challenging to get tea lovers try out different kinds of tea. Our tea tastings and tea appreciation workshops were instrumental is getting people to experience a new world of tea.

Our tea range includes Black Tea, Vanilla, Ginger Root, ChilliChai, Green Tea, Lemon and a Limited Edition Marigold & Lemongrass, Rose Oolong and a White Tea called Moon White. Our teas are 100 percent natural and that is our USP. A Lemon Green Tea bought off the shelves in a supermarket, will contain natural flavours or citric acid or lemon essence, but our lemon green tea uses real lemon peels for flavouring, which makes it healthy too.  A significant part of our services include gifting for corporates and seasonal hampers, and tie-ups (for instance) like when we worked with the blind and deaf students at  The Hellen Keller Institution to create tea cup candles for the festive season.

We have 6 types of teas in our Trunk currently and the most popular is Vanilla. Our customers love the aromatic whiff of the vanilla pod and its soothing aroma. ChilliChai, which is a twist on the favourite masala chai, is infused with red chilli flakes; it is our most recent launch and has become an instant hit.

Innovation is key. We plan to launch a new flavour of tea every 2-3 months. Our customers e-mail us on what kind of new flavours they would like and as a Tea Sommelier, I am constantly crafting new blends with unique ingredients. Our next launch is an indulgent saffron kahwa – a detoxifying and luxurious blend.

We are planning to launch a Tasting Circle where our customers get to be a part of our new product development. They will participate and join the tea sommelier in crafting new blends. Members get exclusive privileges and discounts on our website store and at our offline tasting events. We are also planning to launch a subscription-based model for members to get tea samples of garden fresh teas all year round. We plan to take our teas international to a global audience. In 2014, we will launch our international payment gateway and start shipping worldwide.

Why a specialty store?

Speciality stores are patronsed by connoisseurs. When nothing but the best will do, customers look for speciality stores, and when there are limited options available for luxury teas, customers appreciate a store like ours.

Learnings

This is an exciting time as the Indian consumer feels upbeat about experimenting with food and beverages. So be bold and innovative.

If you’re trying to build a niche product, you cannot be everywhere. If you have a good product, everyone will want to showcase it, but be patient. You may lose in the short term, but it would be worth in the long term to create a differentiated product, and invest in a robust infrastructure for shipping and delivery.

My message

A specially designed care package, a handwritten note, a quality check stamp by a real person, and such small attention to details create a personal connect with your brand.

Anandini Himalaya Tea, Delhi

Store size: 200 sqft  Year of start: Oct 2013  Investment: Rs 5 lakh
Average bill size: Rs 500 to Rs 15,000  Target audience: 16 to 70 years of age
Expansion plans: Franchises across the country.

Despite having no retail experience, Anamika Singh wanted to keep the legacy of Anandini Tea alive, and what better way than to have a boutique selling tea, where she organised tea tasting sessions and food parings.

The launch

I wanted to give a face to Anandini Himalaya Tea so that people could experience a sensorial journey the minute they entered the Boutique from the Zen-like feel of entering all that is in white to the visuals of the infusions, the smell and to the taste. It took me three months to take the place, which was in shambles, to make it what it is now. The launch took place on the 11th of October 2013.

Challenges and benefits

Besides the fact that I had to handle it alone, everything went of pretty smoothly. I did have very dear friends who helped me through the process, but being at the site everyday from morning till night to work with the contractor and the workers was tough. I have always been working in the Estate with my father, handling the export but this was very different. My mentor,  Anil Abhimanyu Sharma, who lives in Paris and with whom Anandini Himalaya Tea was conceptualised, helped me give the space an identity. It was his suggestion that the Boutique should be stylish and product packaging kept simple. The European feel should be experienced in India. I have been inspired by boutiques like Mariage Freres in Paris (which is the oldest tea house in the world) that believes in quality and simplicity; they also buy our Manjhee Valley Classic Collection.

Ours is an interactive Boutique, where the customer can experience, understand, and taste the product rather than simply buy it off the shelf. We hold tastings and workshops with tea and chocolate/cheese pairings. Through my interactions, I understand customer  preferences and accordingly suggest the right flavour. There are 20 types of teas, 7 infusions, 8 classic collections that include handmade teas and a limited edition, and 4 in the festive collection. The teas are from our estate in Dharamshala, and we export them to Europe and Singapore by the name of  Manjhee Valley Teas. But in the Boutique they sell under the brand Anandini Himalaya Tea Infusions &  Classic Collection. The best performing is our green tea infused with pomegranate flowers, Himalayan tulsi, and the handmade flowery green tea.

I do believe that tea is the new coffee these days. There has been a tremendous change in tastes and preferences, with health a major factor. A large segment of consumers still want masala chai, and many who attend my workshops have never had black tea, or are only coffee drinkers, but I love the challenge of introducing Anandini to them and crafting/customising blends for them. For those who want strong or masala tea, I have created a blend of spices amalgamated in green tea with a splash of marigold flowers; it is perfect for winters. On an average, we get around 6 to 8 people on weekdays and marginally more on Saturdays. But it varies according to the season or the festive mood of the people. In the future, I would like franchises of the Boutique all across India, and to create awareness of good quality teas and infusions, and also export of the brand to various parts of Europe and Asia.

Learnings

The variety in tea is immense and the consumer has the means to buy it. One has to keep the product attractive yet elegant. The seller has to have information, the ability and the desire to educate the customer about the product. To be competitive, being niche, and having quality will  stand out. The customer who wants to give himself the 4 minutes of luxury in a day appreciates this.

Consumers want herbal teas knowing that it comes with its own added benefit along with the intrinsic benefits that already exist in tea. They want tisanes. But they now know that the essence that most add to infusions isn’t natural, and that the natural option is available. So they want to know more of what lies in the package rather than just the glitter and colour that they see on the outside. They want to experience and they surely want value for the money. So when they want to know why my teas are expensive, I say, “would you prefer a blend or a single malt .. in the same way, the tea in my boutique is from a single estate and not from an auction house.”

Why a specialty store?

The fact that there is customisation, attention, one to one interaction, palate and preference, makes customers want to visit a specialty store. They know that they will get quality products only.

My message

Educate, Educate, Educate.

Good Foods, Pune

Store size: 250 sqft  Year of start: Jan 2013  Investment: Rs 3 lakh  Monthly sales: Rs 75,000
Rate of growth: 20% month on month  Average bill size: Rs 500
Target audience: All health conscious people belonging to upper middle class
Expansion plan: 1 new store by early 2015

Mudgal quit his high paying banking job in Mumbai three years ago to pursue his dream of launching a retail store. The real estate cost in Mumbai pushed him to shift base to Pune. His store is one of the few stores in India that sells only Organic Food items – from juices to fresh veggies.

The launch

The whole idea behind Good Foods is to offer a one-stop shop for organic and healthy products. There are plethora of stores selling conventional foods, but when it comes to healthy options the choice is very limited. Though modern trade has started stocking organic products, their focus is not this category so they carry very few skus. We saw a huge gap here and this led to the idea of creating a niche store.

Challenges and benefits

The biggest challenge was getting the right store location with a limited capital. It was clear that at the onset that these products are not for masses and we needed to target a niche segment of consumers who are health conscious and can afford these products.

We offer a wide range of organic, natural and healthy products. Our product mix is 80:20 where 80 percent are certified organic and the rest comprise natural and healthy products. We are very selective and ensure that none of our products have added sugar, transfats, etc.  We work with multiple brands to provide wider options to our customers and keep adding new products by sourcing new suppliers. Our organic products are certified as per USDA, NPOP standards to ensure organic integrity and traceability. We plan to increase our stock of 300 skus to 500 by the end of this fiscal with maximum addition in the organic category. Our top sellers are organic brown rice, organic green tea and juices.

Our store has led to increased awareness about organic products and its health benefits. We interact with our customers and explain about the organic products, their production methods, identifying organic labels, etc, and also provide home delivery, and  plan to launch a loyalty scheme by mid 2014. On weekdays, our average footfall is 10-12, and goes up to 20-25 on the first two weekends. During our special offers and discounts we have noticed a 100 percent jump in footfalls.

Why a specialty store? The main driving factors behind specialty stores like ours are health consciousness, increased concerns about food quality, and healthy future of the kids.

Learnings

Today’s market is very dynamic and changing very fast. To keep pace, we need to engage with customers through social media, surveys, direct interactions and invite their feedback and suggestions.

It takes effort and persuasion to make Indian consumers experiment with new tastes. They are very price sensitive and always on the look out for best deals and discounts on every purchase.

They are very knowledgeable and being tech savvy they also prefer mediums like Internet and the mobile for shopping.

Differentiation is another tool for success as everyone sells the same products. We should strive towards enhanced customer experience, new offerings and providing value and convenience, and all possible touchpoints such as Internet, Mobile and SMS. We should treat suppliers fairly and create a win-win situation for all.

My message

Rising health concern is leading to huge shift in consumers with regard to quality of foods. This provides a huge scope for niche retailers and other stakeholders provided we can bring down the cost and offer consistent supply and quality.

Simply Nature Store, Hartola

Store size: 450 sqft  Year of start: 2013  Investment: Rs 30 lakh  Monthly sales: Rs 6 to 8 lakh
Average bill size: Rs 500  Target audience: all health conscious people
Expansion plan: Increase online presence

Sharma’s major business comes from his online store but his offline store is what makes his customers connect with the retailer.

The launch

We used to make products with the help of local villagers in Himachal, and from organically grown produce. We got the idea to run a store to empower the locals so that they could feel proud of their products. It took us three years to put the idea into execution. Our range of products include biodegradable disposables (utensils for one time use),juices, squash, jams, teas, soap, legumes, lentils, and dairy products.

Challenges and benefits

Acute power shortage. We are planning on an alternate source of power. Organic for me was never a niche field; rather, it is our way of traditional farming. It is a hype created by companies to charge a premium on products, which should actually be lesser than the cost of similar products in the market. We hardly face any challenges in the hills to bring organic and natural products to consumers.

Our online reach makes us more accessible and customer friendly. We offer 10 percent discount to customers who visit us the second time followed by online sales support that offers home delivery of our entire range. Currently, we have 4 units and the best performing is at Nainital.

The market is changing dynamically and there’s a lot of demand for natural and organic products all over the globe. After launching our stores, we want to tap the institutional market, Many corporate houses are also eager to buy organic raw material.

Why a niche store?

Organic food lovers and the health-conscious know that they will get most of their daily need products, and that too fresh from the Himalayas at our store.

Good Food Retail, Bangalore

Year of start: July 2013  Store size: 2,000 sqft  Investment: Rs one crore per store
Monthly sales: Rs 1.2 crore per month  Rate of growth: 10 percent
Average bill size: Rs 600 plus  Target audience: Sec A and A+  Daily footfalls: 700
Expansion plans: 10 more stores in 2014 in Bangalore, and thereafter in Chennai and Hyderabad

Good Food Retail, a retailer of Premium Quality Food Products (both Indian and Imported), is the brainchild of Suresh K Asrani, whose understanding of the changing buying behaviour of Indian youth and their appetite for quality food led him to start this venture. His  exposure to international markets has helped propel the company to greater heights. He is assisted by sons Nikhil and Aseem.

The launch

Good Food Retail opened its first store in Whitefield, Bangalore in July 2013. The retail business is promoted by Suresh Kumar & Co (Impex) Pvt Ltd – an ISO 9001:2000 certified company established in 1990, and a leading importer representing over 25 top international food brands. Through its network of over 150 distributors, products are placed in over 10,000 retail stores across the country.

Merchandise

Over1,500 imported food products such as Italian pasta, Spanish olives, Thai curry, Chinese sauces, Mexican dips, snacks, bakery ingredients, beverages, breakfast cereals, over 40 types of cheeses such as Swiss Emental, Italian mozzarella, Dutch Edam, Cheddar from  the foothills of Kodai, chilled meat and cold cuts (delivered fresh daily in temperature controlled vehicles), organic foods, premium quality Indian grocery from Delhi’s special spices to Hyderabad’s biscuits, and premium basmati rice to idli rice, pulses, pickles and snacks; farm fresh fruits and  vegetables sourced directly from farmers, and exotic fruits and vegetables.

Challenges and benefits

In general, cost of real estate, funding and lack of trained manpower are major challenges in the retail industry. Organised retail in India is at a nascent stage and cost of funding is very high. It’s a challenge to mobilise funds for growth and expansion. All our stores are located in upmarket areas of Bangalore. We choose our location very carefully keeping in mind quality of real estate and adjoining catchment as, for us, quality of the catchment and customer convenience are an important criteria. Ours is a destination store so we need not to be on a high street.

Lack of talent is another area of concern. To overcome this, we have started hiring fresh graduates from IHM and management colleges, so that we can train and use this talent for future expansion and growth of our business.

Why a specialty store?

Our retail venture is a forward integration of our import business. Ours is a family business, and we want to inculcate a professional outlook with traditional values in our work ethics. We want to build a retail chain that not only presents the best quality and best value products to the customer, but values its suppliers equally. Our assortment has been chosen meticulously keeping in mind the needs of the catchment. Our tagline aptly says ‘We sell food that compliments your taste’.

Learnings

There are many misconceptions and lack of awareness in the consumer’s mind regarding imported foods such as their high prices, cooking methods, taste preferences, etc. We aim to do a lot of sample tasting within the store to familiarise consumers. Even though the store’s assortment is gourmet in nature, the main focus is to get only high quality, good value products. For example, we are selling Italian made pasta at a promotion price, which is equivalent to the price of Indian made pasta.

While deciding what format to follow, we did intensive research over the store concept and format, following which, we found that profitability and scale are elusive when it comes to large and medium size stores. Smaller formats are rather easy to build scale (since retail is about scale), we would want consistent growth in number of our stores. Smaller formats can grow rapidly, that is why we have decided that our store size shall not be more than 2,500 sqft each. Our other focus is on spreading awareness of imported food products.

My message

Organised retail is the way forward. India is a huge market for organised retailing, and the Indian food and grocery space has the potential to accommodate both international and regional players.