The Dips category in India is yet to open up and is in a very nascent stage of product development and retail growth. But Chef’s Basket is attempting to prise open this market with a bold gambit that is likely to fetch it rich dividends going forward…
The food retail market in India is coming of age but there exists a discernible gap for good quality gourmet food varieties in many categories. Three IITians with fire in their bellies – Nipun Katyal, Varun Jhawar and Manish Tirthani – sensed a distinct business opportunity in closing the gap by playing to their vision. Driven by raw entrepreneurial gumption and belief in their business nous, the troika etched out a blueprint to introduce new and global taste experiences to consumers. The fulcrum of the plan hinged on teasing out product offerings after tireless experimentation in order to bring out the variants most likely to be accepted and enjoyed by Indian consumers.
The upshot was the creation of Fizzy Foodlabs in 2012. The company operates under the brand name Chef’s Basket, and it has been selling Pasta and Noodle kits with about four lakh unit sales to show for every month. “We believe food and dining should be accessible, enjoyable and always inspirational. By packaging the promise of food from around the world in our packs, we’re introducing people to their innate food desires,” says Katyal.
With good fortune and success caressing the company’s initial efforts, Chef ’s Basket is on the cusp of expanding its product range. On the occasion of World Hummus Day on 13th of May, Chef ’s Basket launched its Fresh range of Hummus & Fruit Relish in the Dips category. Made with ingredients that the company says are 100 per cent fresh and natural, the Fresh range of Chef ’s Basket Hummus & Fruit Relish is produced on a daily basis at a plant in Rabale, close to Mumbai.
“The dips we make have no preservatives, colours or added flavors in them and their shelf life is enhanced with the unique packaging technology we have adopted from Italy,” informs Thirtani.
The company avers that it is the first user of this technology in the fresh food category.
“The biggest challenge for us at this point is the shelf-life of the product, which is a problem to be solved for the entire category, and we are working on it. It took us about a year on R&D to crack the product using state-of-the-art Italian MAP technology, admits Tirthani.
For Chef’s Basket, venturing into the Dips category is a bold gamble, which it hopes will pay off eventually. For one, the Dips category in India is in a very incipient stage of product development and suffers from under-the-radar retail visibility. The existing players are mostly very small, hyperlocalised, with just a few homemakers making dips and supplying in nearby GT stores. Quite obviously, the time is ripe to disrupt this space and bring the category out of the shadows. In this respect, credit is due to founders of Chef’s Basket for showing remarkable prescience in venturing forth into an untapped category with the aim of unleashing its scope and unshackling its potential.
“Over the last decade, there has been a major shift in the retailing of convenience foods towards fresh packaged products, driven by consumer demand for more nutritious alternatives and a wider range to choose from. With MAP technology and increasing standards of cold chain infrastructure in modern trade channel, we believe the category is ripe for rapid growth,” says Jhawar.
“There isn’t a brand that is building this category currently, though there are some private labels or homemakers who are supplying to nearby stores. But these products come with much less shelf life and do not have a variety of choices for consumers to pick from,” informs Katyal.
Given the absence of any major brands in this space, Chef’s Basket is looking at 80 per cent plus market share in the Fresh Dips category in the next four to six months. “We are aiming for a monthly turnover of Rs. 60 lakh in the first quarter after launch, and expecting to grow at 100 per cent quarter on quarter, including institutional sales,” predicts Katyal.
The category is, however, big in many other countries, including some neighbouring ones in the Middle-East. Hummus has become a billion dollar category in the US, and it has happened in only the past 10 years. As an example, Chobani has become the category leader in the US in the Greek Yogurt space in recent years.
“But these categories are a white-space in India and we believe that it would take much less than 10 years for developments in this fresh food segment to make it big,” confides Tirthani.
As an early mover, Chef’s Basket hopes to seize upon several opportunities in the market going forward. “The existing local brands do not have the technology to take the natural route and neither do they have the variety to offer. We are starting with three variants in Hummus and are going to be add three more unique flavours within two months,” says Tirthani.
As an early starter in the Dips category, Chef’s Basket is looking to make a big mark for itself with its Fresh range of products. More so, since the company has taken special pains to come out with a product range that ticks all the right boxes. By way of example, the product development process for Chef’s Basket Fresh range of Hummus & Relish has been rigorous and extensive.
“The products have undergone rigorous flavour testing and we are quite proud of the taste of the final product. Our beetroot Hummus is quite popular among kids with the hint of tamarind that we have added, and surprisingly so, since children generally do not enjoy eating beetroot. We are the only ones with such a unique flavour portfolio and a palate that is consistent and as good as a homemade recipe,” informs Katyal.
On being asked what are the chances of his products scoring it big in the market, he says: These products are as good as a homemade recipe – The Hummus from Chef’s Basket is nothing different from a fresh Hummus served at authentic Middle-Eastern restaurants. We think it’s going to be the health & fresh aspect of the products that will go down well with consumers.”
To create a buzz, the company has been conducting pre-launch campaigns, giving out its new range to food lovers and bloggers and also presenting the products at a few events for tasting. “We have been getting mails asking about the launch, and mails expressing love and appreciation for the products have been pouring in already,” shares Katyal.
However, even for manufacturers with good products to pitch for, the retail frontier still remains a major challenge to cross. “This category would be created based on supply, as there is a huge unmet demand. There are about 1,000 stores in the top six cities that have the potential to sell premium fresh dips. The basic dips (say a coconut chutney) would have a far higher potential number of stores in terms of distribution possibility,” reveals Tirthani.
With consumers eager to lap up new flavours and keen on trying out new stuff, retailers realise that there is a void in this space. “Retailers have welcomed us for the launch and, in fact, have also shared numerous other possibilities regarding the SKUs that can be possible in our Fresh range,” discloses Tirthani adding that all retailers today realise that this is a category not meant just for the super-premium retailers, but one that can become mainstream if the selection of products and pricing is right.
But while the enthusiasm and willingness of retailers to promote the Dips category is music to brands and manufacturers, there’s a wrinkle to iron out. Stores today are way more cluttered with numerous communications from various brands and so it becomes a challenge to occupy the mindspace of consumers and build a relationship between the brand and consumer. “Our strategy is to communicate closely with the consumer – we are allowing them to speak and we are listening,” says Katyal.
Merchandising is another aspect that will play a key role in developing the category. For example, open chillers for dips are known to increase consumption as compared to closed refrigerators. “We are in talks with a national modern trade retailer to make a refrigerator bay for us along with the snack category (say Nachos) to drive our dip consumption. Retailers are becoming more consumer-centric and experimenting with merchandising to include cross-merchandising and innovative out-of-the-category fixture-based displays,” reveals Jhawar.
The company expects 50 per cent of its sales in the Dips category to come from Modern Trade / General Trade if it is successful in ensuring product availability and nailing innovative merchandising. To achieve this goal, it has worked out a plan wherein the supplies would be done directly by the company. As far as sales from other channels are concerned, it hopes to accrue 20 per cent from e-commerce and hyperlocal – Grofers, Bigbasket, etc, – and the rest from institutional sales.
The factors that will play an important role in the category performance are availability of the product and quality consistency. The availability factor assumes importance given the limited shelf life of fresh dips and the cold chain infrastructure limitations, which pose stocking issues for most stores. At the same time, keeping the consistency in taste, texture and all sensory parameters are critical for the success of a product like Hummus and Relish. A third factor is having a ‘range’ and is critical because consumers need variety when it comes to the snack and dips portfolio.
According to Jhawar, companies that acquire the capabilities of enhancing the shelf life to 18 days for Hummus and 30 days for Fruit Relish, will stand to gain and play a major role in disrupting the category. “We will also be the only brand to offer smaller portions in this category which makes it more accessible for consumers. This is in line with the core principle of not having any wastage on account of buying bigger portions,” he adds.
For the time being, the company will focus on Mumbai for the initial launch and will gradually expand to all Tier 1 cities as a part of its Phase 1 launch in the next six months. “We believe these cities have an existing demand for Dips products that is unmet, and we are hoping to capture and build on the demand in these places first,” believes Katyal.
His advice to new players entering the market: “Unprocessed food is a very tricky space to enter, it needs careful attention, right from the raw material sourcing until the product is consumed. A good amount of real time R&D is necessary to understand your products best. Rather than going the easy way of additives, it’s better to keep the product as close as possible to the original homemade form for consumers to love your food. Consumers today are way more cautious and knowledgeable and exposed to many options on daily basis.”