A chance reading at an airport lounge got this sales ops manager to start Puzzle Snacks for Tier II cities
Startup ideas are born in the unlikeliest situations. That's how Expedite Foods was born. Founder Abhinav Gupta was working for a European company, where he was managing the Indian sales operations.
During an official visit, Abhinav had to catch an early morning flight from Mumbai to Baroda. Having reached the airport early, he chanced upon a story in the newspaper on the rural economy of India.
This, for him, was a eureka moment. Abhinav realised that India's biggest strength was its population of over a billion. After several weeks of planning, thinking and research, Abhinav came up with the idea of venturing into snacks manufacturing.
That's how Expedite Food and its brand, Puzzle Snacks, came into being. The brand has over 24 variants of snacks that range from the traditional Gujarati snacks to the regular Indian namkeen.
Perils of a manufacturing startup
"While I was sure of the idea, no one supported me. Whoever I spoke to cautioned me of the perils of getting into the manufacturing business and that I shouldn’t be doing it," says Abhinav. Though he had put in almost all of his savings into the venture, Abhinav was in need of funds. But few were willing to help him.
When all venues seemed to shut down, his cousin helped him with the seed funding. "It was amazing how just one phone call could convince him. He wasn’t sure if he would manage the business in the long-term with me but agreed to help, readily motivating me to take a plunge right away and managing the rest along the way," adds Abhinav.
While he had received his seed funding, building a business was still a huge challenge. From the first year, the priority for Expedite Foods was to get the product right. Abhinav was particular about the quality of the snacks he was manufacturing, but he had no clue how to ensure the same.
So he began by researching the market. "I would start at six in the morning, travel to the nearby towns to get orders and appoint distributors. My day would end at 11 in the night," says Abhinav.
Despite the troubles taken, people stopped buying after the first delivery. The problem became a trend and Abhinav decided to investigate. When he met with the customers, they told him that the final product didn’t match the great samples. After further investigation, he discovered that the people in the factory weren’t doing things right when he was out.
He says, "It was like a vicious circle –on one hand I am travelling to get customers but at the same time the material being manufactured in the unit was not up to the mark in my absence. As a result, we had to appoint distributors in each town a couple of times until we found the problem and changed the entire team in production and put systems in place.”
Abhinav said that this incident taught him a valuable lesson -- in a startup you are responsible for everything. From production to sales, it’s the responsibility of the founder to get the act in place and you can’t trust anyone with it in the early days.
Building the team
Like any other startup, Abhinav says that building the team, especially on the production side, was extremely tricky. This, he says, was mainly because he was clueless of what qualities to look for in the individuals. Though he made some mistakes in his early hires, he eventually learnt from his mistakes.
There also was the problem of hiring the right sales people. With the small setup and a brand name that is yet to be established, not many were interested in being a part of the team. And through it all, funding was another problem Abhinav was still trying to tackle.
The distribution network is routed to several Tier II and Tier III cities. "Apart from a strong distribution reach, we have also ensured affordability. The price point of the snacks start from Rs 5, with great quality," says Abhinav.
Abhinav says that they are still building the brand and will be doing so for next few years. "We’re applying all the learnings in bits and pieces and it will be at least next 10-12 months before we build a solid brand with the right communication and positioning strategy," says Abhinav.
Revenue and growth
Since their inception in April 2012, Expedite Foods has grown over 100 per cent year-on-year and was profitable from the first year. The team is confident that they can maintain this growth rate and work their way towards the top for next few years. With a new sales team in place, they are certain that they will be adding more distributors and retailers into their network and thereby increase sales multi-fold.
Reports given by the Ministry of Food Processing suggests that the snack food industry is worth close to Rs 100 billion. Over 1,000 different snack items and 300 savouries are sold in India. Over the last three years, the snack industry has grown at 10 per cent. Already there are several players like Namkeenwale, Pakumania and Induben Khakrawale (apart from players like Haldirams and Anand).
Expedite Foods, however, has bigger plans with Puzzle Snacks. They are in the process of acquiring land for their new facility.
"On the sales side, we have given ourselves audacious targets and are working round the clock to get our numbers in place. We are also in touch with some marketing consultants to get our brand positioning in place for urban India and we wish to roll out our products in times to come in Modern Trade and then slowly move to mainstream cities," says Abhinav.