In the past two years, i2cook products have hit the shelves of around 50 retailers across India. Megha Deokule, Founder i2cook, shares how she set out to make her favourite peanut butter and turned it into a rolling business
From blogging to retailing
After a brief three year stint in an architecture company, Megha Deokule, Founder, i2cook, realised that cooking was her forte. She turned food blogger and began making peanut butter, salad dressings, cream cheese, etc from her home in Mumbai. By participating in farmer markets, she connected with vendors and farmers from whom she began to source the best ingredients, and was rewarded by getting positive feedback and appreciation from her customers. But Deokule was in no hurry to go commercial in a big way, as she wanted to test the waters first.
Says Deokule, “Initially, I wanted to touch base with the middle men, and know the right sources for my products.” She set up a production unit in Andheri, Mumbai – a 500 sqft space with a capacity to produce 12 kilos of products per day, which she sold to local retailers such as Navdhanya, a popular gourmet store in Andheri.
“My products are still supplied to Navdhanya,” she informs and add, “I think we are the first to sell coconut sugar in the North, which is the next best selling product after our peanut butter.” Pretty soon, i2cook products were available in 50 outlets across Mumbai, Bengaluru and Delhi. Products are also produced for other stores (mostly gourmet) as i2cook specialises in nut butters like almond, chocolate peanut butter, and mustard.
Increasing production and revenue
Deokule decided to move to Bengaluru as real estate costs were more affordable, making it possible for her to expand to a marginally larger space of 700 sqft area, where she increased production and doubled sales.
“Since we moved to Bengaluru, we have been growing faster. In the next 2 -3 years, we intend to establish ourselves more strongly, and increase production, and thereby touch sales of Rs 1 crore. Our immediate plans are to get more machinery to increase our current production capacity from 15 – 20 kilos per day to 25 – 30 kilos.”
Deokule, who started the company from personal funds and three employees, now has two partners: Pawan Deokule (her husband) who handles Strategy and Marketing, and Drupath Raja who handles Sales. “i2cook began as a tiny enterprise in Mumbai, but we have have got returns close to 40 percent since inception. Revenue in the first year was only Rs 50,000, but we have come a long way from there.”
According to her, revenue growth over the last two years has increased four fold, and she is targetting a sixfold increase from the last fiscal.
The reason why Deokule did not consider stocking i2cook products in large format stores during the initial stages was due to the issue of product visibility on their shelves. She explains: “At the smaller stores, we were able to place posters showing our products, and also establish good relations with dealers as they are the ones who would push our products at the retail-end. Since we work a lot through social media, I would try to redirect customer queries to the store closest to his/her locality.”
To ensure visibility of her products, she visits the stores to check their placement on shelves, and often finds them stocked behind other products. Having a good bonding with the retailer helps. “Our products are niche. Not many people would pick them up immediately, so we work on a 20-25 percent margin,” she adds. “This, no doubt is steep, but i2cook is otherwise frugal in its methods, and we always take several quotes and options before we decide on any expense.”
Deokule informs that consumers were earlier apprehensive about peanut butter as they consider it full of fat, but now, many are convinced of its health benefits, and the product, priced at Rs 160, has become their fastest moving item. “We have not changed our pricing since we started,” she adds. “Our customers are mostly in the 25 to 50 age group, but the 40 year-olds form our core audience. They are very health conscious, and aware of products and their health benefits. They usually buy 3 – 4 jars at one go since they consume it almost daily.”
She observes that people now are more accepting of products that are locally produced, unlike four years ago when imports were in high demand. “We are seeing a sharp decline in imported product sales as people are concerned about shelf-life, refrigeration, and expiry dates. So, the organic food market is growing.” However, they stock around 20 listed international brands, of which, the top two sellers are Costagno pasta and Braggs apple cider vinegar.
Apart from Bengaluru and Mumbai, i2cook products are present at retail outlets in Delhi, Mysore and Chennai. Deokule points out that retailers approach her directly for orders. Bengaluru contributes the highest in terms of sales, which she believes is because the city has a diverse audience, which is not averse to spending on products they consider as good for health. Chennai is an emerging market, and they get some orders from kolkotta as well.”
For Deokule, procurement, availability of materials within the right time frame, quality check, logistics, breakages and wastage due to poor packaging are major concerns. Another tedious task is acquiring various licenses for setting up a business. She laments, “There’s a long list: Food license, VAT, SSI, Weights and Measures license, labour license depending on the size of set up one has, factory license, pollution control, etc. And all of these have to renewed annually! So we are constantly dealing with government officials. The process is tedious and time consuming. Even expanding the product range would require more licences as we have to inform the food inspector.”
i2cook products are marketed through tasting sessions at retailers, participation at food events, and Deokule also blogs and uses social media to communicate with customers. But a lot is through word of mouth. She stresses on building a strong relationship with retailers, and informs that they are focusing on offline sales, while their online sales is growing slowly, and needs to be marketed more. Deokule also has plans of adding baked snacks to her offerings.
“We are in a growing market and there is room for all. We are currently focusing on feeding our customers unique, healthy, tasty organic ingredients. We believe this area is free of competition at the moment,” she concludes.