Gurgaon-based processed food manufacturing startup Fric Bergen aims to make premium sauces available for the masses.
A steaming plate of spaghetti with a generous helping of pesto sauce. Or crunchy nuggets of chicken dipped in creamy Thousand Island dressing. Easy enough stuff to order off a menu, but imagine having such sauces and dips ready at hand, even in small, inexpensive batches. You can cut down on the money spent at a restaurant and still have such exotic fares at home.
While many players have introduced retail packs of premium sauces, they are expensive and are affordable only to a few. To address this gap, Gurgaon-based Fric Bergen launched a range of affordable premium sauces that can be found on the shelves of everyday mom-and-pop stores.
What started as Vivan Food Pvt Ltd, a B2B company in 2008, pivoted into retail and was rebranded as Fric Bergen (Fric meaning 'money' in French and Bergen stands for 'to save' in Dutch).
The company produces mayonnaise-based sauces, including tandoori mayo, eggless mayo and mint mayo, and makes them available for sale in single-serve sachets priced at Rs 10. These sauces are available in mom-and-pop stores, local grocery stores, daily booths and can also be bought from local vendors selling bread and eggs, mostly in cities in the North, such as Delhi-NCR, Chandigarh, Ludhiana and Amritsar.
Fric Bergen's sauces are also available in western cities like Ahmedabad, Mumbai, Surat and Baroda. They have started selling their products in Chennai and intend to launch in Hyderabad this month.
Vivan Foods, before being rebranded as Fric Bergen, was founded Rohit Agarwal and couple-duo Vivek Singh and Vandana Singh. Forty-five-year-old Vivek had previously headed the packaging division of Larsen & Toubro and has more than 20 years of experience in marketing and supply chain.
Vandana (44) has more than 18 years’ experience in the distribution channel and has been the distributor for food brands like Heinz. Rohit (28), on the other hand, is a chartered accountant and has more than five years of experience in the investment banking domain.
Fric Bergen has a core team size of more than 35, with nearly half them involved in production.
Not a preserve of the rich anymore
The team's biggest challenge was reaching its customers. In the previous B2B model, they supplied one-kg tubs of sauces and dips to five-star hotels like Hyatt, Crowne Plaza, Radisson and Westin.
Priced between Rs 85 and Rs 90, the company offered mayonnaise, sandwich spreads, Thousand Island dressing, pizza and pasta sauces to these hotels.
Sauces and dips, considered a niche product in India, are typically sold only in high-end stores. But the founders of Fric Bergen wanted sauces to be sold like a "pack of chips". Vivek says today, Fric Bergen's products are available in more than 9,000 stores across the country.
"We wanted to create a brand in India that provides high-quality premium products at affordable prices," says Rohit.
It was then that in 2017, the team decided to rebrand as a retail brand delivering the product to the final customer. However, the process was not easy. "Bigger distributors would not do the legwork for us," says Rohit. They then approached the smaller distributors such as milk, bread, egg and curd distributors, along with their regular FMCG distributors.
"Small distributors with brand agency would go out to the market every day and help take our sachets, priced at Rs 10, to the customers," Rohit adds.
The team purchased land in Behror near Alwar, Rajasthan in 2010. They manufactured only eggless mayonnaise initially and, at the beginning of 2017, started the production of their entire range of sauces and dips. The idea of setting up the manufacturing unit was to reduce manufacturing costs and thus, selling the end product at a competitive price, Vivek explains.
Recipe for success
The co-founders invested over Rs 5 crore and they haven't had any external funding as of yet.
Founder Rohit claims that since inception, the company has earned more than Rs 20 crore in revenue and since the change in the business model, Fric Bergen has had Rs 5 crore as their revenue. They are breaking even at operational cost.
The company earns close to 65 percent of its revenue from the retail business model and the balance from HoReCa (Hotel, Restaurants and Catering ) segment.
Fric Bergen's secret sauce
According to India Brand Equity Foundation, the food industry is expected to grow to $ 65.4 billion by the end of 2018. While international brands such as Heinz, Dr Oetker and American Garden have made a prominent place in the Indian markets, while Indian brands such as FabIndia, Keya and Veeba have also entered the market with their dips, sauces and mayonnaise.
However, no company has come up with economical sachets that can be bought by the masses. It is the packaging and distribution channel that Fric Bergen has adopted that makes it stand out from other competitors in the market.
Mayonnaise for the masses
Fric Bergen's target customers fall in the age group of 18 to 45 years and it has been focussing on expanding operations in Tier I and Tier II cities. "Our focus is to cater to the masses. With prices of our products being as low as Rs 10, consumers usually end up buying two to three variants in one go," said Rohit.
Currently bootstrapped, Fric Bergen is focused on strengthening its position and achieve a more extensive reach in the retail market. They recently launched their honey-ginger and honey-lemon tea sachets (in liquid form, the first company to do this) priced at Rs 12 each. "It contains 96 percent natural honey and three percent concentrated ginger and tea extracts," says Rohit.
The company also plans to launch sugar-free sauces and juice concentrates in the next three to six months. "By the end of 2020, we plan to shift our retail revenues to 85 percent and HoReCa would be only around 15 percent," says Rohit. They also plan to expand their presence to more than one lakh outlets in the next three to four years.