First-gen foodpreneurs pack old vada in a new pav.
Bengaluru, India | Source: TNN | 13 Nov, 2015 11:34 PM IST.
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 focused 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.