Dezertfox now has around 12 categories on its menu, making it a total of 70 items, out of which jar desserts and cakes are most popular.
At a glance
Founder: Ayush Agarwal
Year of launch: 2016
Location: New Delhi
Sector: Food and beverages
Problem it solves: Affordable, premium dessert with home delivery
Funding: Bootstrapped with Rs 2.5 crore
How can you get premium, yet affordable, desserts delivered to your doorstep after dinner? Ayush Agarwal, 31, sought to answer this very question by starting up.
A B-Tech graduate from IIT-BHU Ayush did his MBA at IIM Ahmedabad.
While on an exchange programme to ESSEC Business School in Paris, he came across a number of patisseries in France and other parts of Europe. He was intrigued by the bakery culture in Europe, and how a patisserie is a part of everyday life.
After finishing his education in 2012, while working at IBM, he realised that the local market lacked the quality and presentation of international desserts and flavours, which he had experienced in Europe. He also realised that there was not a single dessert place that delivered desserts late at night, the time after dinner when one has a sweet craving.
Good quality desserts in India have always been served in five-star restaurants or high-end eateries. Ayush wanted to introduce the idea of making high quality desserts, pastry and bakes available in the local markets at affordable prices and deliver them to costumers at their homes.
After a three year stint at IBM, Ayush decided to launch a premium dessert café brand – under the name Dezertfox – in March 2016.
About the interesting name, Ayush explains, “Fox is our spirit animal; they are physically and mentally responsive, and have increased awareness (keeping up with the world dessert trends). They can find their way around, be swift in tricky situations (providing high-quality product with premium ingredients, yet not making a hole in the costumer’s pocket). We deliver in the wee hours in the shortest duration, resembling the fox’s affinity with nocturnal activities.”
In December 2016, Dezertfox started full-scale operations as a bootstrapped startup. It was initially only a dessert delivery place operating from two stores and one base kitchen. Later, it opened stores in prominent places targeting the high-end market. Bootstrapped with an initial Rs 50 lakh, it has invested Rs 2.5 crore so far.
Targeting the sweet tooth
Dezertfox targets customers in the 18-35 age group. Ayush claims its products are affordable to both students with pocket money, and to the working population. Marketing is done mostly through social media as the products’ pictures are alluring. “We do have a customer loyalty programme. We distribute pamphlets door-to-door, coupons, etc and also take part in prominent food festivals,” adds Ayush.
Customer feedback helps accelerate Dezertfox’s R&D. By consulting consumers in the product development phase when it changes the menu, Ayush claims, it has been able to meet costumers’ expectations and demands.
“Being responsive to customer feedback helps us get closer to our target audience. This helps build customer retention, stronger brand loyalty, and better engagement,” says Ayush.
He goes on to elaborate, “For instance, we used to make our chocolate cupcake with chocolate ganache. We got reviews that the taste is good but it is too filling, so we changed the topping to whipped ganache which is as tasty but lighter on the belly.”
Dezertfox now has around 12 categories on its menu, making it a total of 70 items, of which jar desserts and cakes are most popular. The average order for a single person is Rs 250, and average bill size is around Rs 500.
City of sweets
To its credit, in Delhi the market size becomes huge due to the presence of multiple cities in the NCR region. But competition is huge too. According to Ayush, Dezertfox competes with local bakeries and traditional sweet shops.
“We differentiate ourselves from other bakeries by selling products which were available only in five-star hotels till now, and by delivering products to the customer’s home. By the constant shift of customers from traditional sweets and Indian mithais to healthier western desserts, we are at par with traditional sweet corners,” he says.
However, Dezertfox’s challenges were many.
For instance, procuring spaces on rent for outlets was difficult as the landlords were reluctant to rent out shops to a startup. Also, it took five to six months to get permission to open Dezertfox’s Connaught Place outlet.
“The process that involves getting permission from the Heritage Committee is so extensive that, for a startup like us it is rather impossible to afford rents and expenses after opening the store,” says Ayush.
For delivery, Dezertfox had to develop the right packaging in order to deliver its products in Delhi temperatures and changing weather. “Our products are so delicate that they have to be delivered with utmost care. So we developed processes and operations complementing our product range,” Ayush tells YourStory.
A market worth the craving
According to a report, the Indian bakery market is worth Rs 16,500 crore, and is growing at 7.5 percent annually. While breads and biscuits constitute about 82 percent of the market, the cakes and pastries’ segment is estimated to be worth Rs 1,250 crore. Obviously, Dezertfox is looking at a huge market.
With a team of 35 members including chefs, counter executives, delivery boys and the management team, Dezertfox has in-house production of desserts in the central kitchen. Ayush claims all desserts are supplied fresh to their stores every morning.
Dezertfox is focused on average bill value, customer rating and feedback, and food cost. It has partnered with Zomato and Swiggy for marketing and getting new orders.
Ayush claims its sales are increasing at a rate of 20 percent per month, and it plans to reach profitability in six months. Dezertfox is now looking for angel funding to increase the store count to 20 in NCR and expand to other cities.