This duo wants to popularise low calorie hard seltzers with a native twist
A few years ago, long-time friends Ruchi Gupta and Gaurav Sharma were travelling across the globe when they struck upon a business idea.
The teetotaller duo were looking for a moderate alcohol drink on the streets of Thailand when they were amazed by the sheer variety of ready-to-drink (RTD) beverages for people wanting to have something other than the usual beer, wine or cocktail.
Ruchi and Gaurav couldn’t help wonder why there was nothing similar in India. Upon further exploring the Indian market, they found a huge gap and an opportunity to offer something that falls in between a cocktail or a beer/wine, and in the process, break the dominance of the sole player—Bacardi Breezer.
With the aim to give the Indian audience a healthier alternative, the founders decided to cash on the growing popularity of hard seltzer in India, and started. Incorporated in 2020, the Goa-based startup offers its prime product—Barneys Hard Seltzer, a low-calorie alcoholic beverage infused with interesting Indian elements like apple, jasmine and lemongrass, to appeal to ‘not so serious’ health conscious drinkers.
The ideation stage had begun during the lockdown. With almost no experience in the beverage industry, the founders got hold of a carbonation machine and started playing around with different combinations with the pure strategy of ‘try and fail’.
“One of the things that we realised during the shutdown was the sheer demand for liquor. There were people who stood in a long queue of 4 kms to get a bottle of anything alcoholic. This was our cue to enter the alcohol segment, which is not easy but has an immense opportunity,” says Ruchi, who has about seven years of marketing experience. The name behind the drink is inspired from the founders’ favourite character ‘Barney’ from popular US-based TV show ‘How I Met Your Mother’.
The early days
The initial cans were refined at a distillery in Hyderabad. After six months of experiments and pilot testing with cafes, family, friends and investors, the duo succeeded in making patent pending blends. However, they were faced with their next big challenge of formally taking the drink to the market and commencing commercial production.
“We didn’t know how to go about it. It took us three months just to gain confidence and understand the nuances of the industry. Alcohol is a complicated market and requires a lot of processes and scale. We needed a solid strategy and investment,” says Gaurav, who leads the supply chain and distribution network of the startup and holds entrepreneurial experience of seven years with his previously founded hardware startup.
After endless number of pitch calls, networking, testing, research and learnings, the founders came through with a funding opportunity in August-September 2021 and raised Rs 3 crore from Mumbai-based ah! Ventures, and Chandigarh Angels Network (CAN) among others. The product was formally launched earlier this month. Together, the founders have invested about Rs 30 lakhs to date.
The startup has outsourced the manufacturing at a plant in Goa and operates out of Delhi. The raw materials come from different regions while the cans are sourced from vendors in Mumbai. It has a R&D lab in Hyderabad with a team of about 4-5 people.
At present, the startup produces about 3,000-5,000 cases per month, mostly as per the demand, and has a majority presence in public market Goa with 4-5 strong distributors. The pricing of the product varies across the state.
“Our next point of action will be Delhi and Karnataka, which are private markets. We are in talks with wholesale shops, distributors, and major cafes in both the regions, and will start from March 2022. We will also go for online sales as per the states’ rules,” says Gaurav, who talks about a host of legal formalities and policy-related challenges across regions.
Barbrew aims to keep the price range above its direct competitor Bacardi Breezer but below an average bottle of beer, to avoid direct price comparison.
A 330ml can of Barney’s hard seltzer (with 6 percent alcohol) is priced at Rs 110 in Goa, as compared to a 275ml Bacardi Breezer bottle (4.8 percent alcohol) which comes at Rs 90, or a beer bottle starting above Rs 110.
The growing market for hard seltzer
In addition to a low sugar buzz, hard seltzer is the option C for those who enjoy their beer and wine but want something easier and not too serious.
There is a huge market for hard seltzer abroad with big brands like White Claw, Truly and Bud Light dominating the segment. Even brands like Pepsi and Coke and big beer brands have come up with their line of hard seltzers in the US and European markets. The level of awareness in India is, however, limited. Having said that, the upcoming speculated entry of global and known players like Budweiser in the market is likely to change the game.
“When we started, people did not even know about the category, but the awareness is slowly increasing owing to the speculated entry of big brands in the Indian region. This will be an overall win-win for the hard seltzer industry rather than a threat to a smaller brand like ours as we will be able to save on our marketing spend to educate people about the category,” she says.
There are also speculations about White Claw launching its products in India in the next 2-3 years.
At its level, the startup directly competes with new-age hard seltzer brands like Goa-based Raya, Speak Easy, Bro Seltzer and Flo—all launched during the pandemic.
"The startup is equipped to disrupt the undermined opportunity of hard seltzers in India. Millennials are health conscious and wish to avoid drinks which are loaded with calories, which is where Barneys fit in. We will be extending all the necessary help for expanding to new geographies and larger distribution channels," says Baldev Garg, participating investor at CAN.
What is its USP?
The founders term their hard seltzer as “sparkling water with flavour and tipsiness”, plus an additional edge of zero calorie.
It is no child’s play to enter the alcohol industry. Besides dealing with a host of legal and policy-related formalities, the brand had its work cut out finding its own uniqueness in the highly competitive space. Hence, the ‘health conscious’ play was infused into the brand to create a differentiator in the alcohol segment.
“We don’t have such a thing in the alcoholic industry, but it is mostly restricted to non-alcoholic brands. We have created a 90-calorie alcoholic drink as compared to say another brand, which holds almost double the sugar content,” claims Ruchi.
The low sugar alcohol category has seen huge popularity with even beer brands like Bira launching light beers. To stay ahead in the game, Barbrew is keeping its alcohol content competitive.
“The alcohol content offered by us is 6 percent with 95 calories, which is quite above other hard stelzers or light beer brands. That is a good number in the low alcohol content beverage segment, which will also help us seep into Tier II region,”explains Gaurav.
Aiming for the 1000 crore mark
The startup has launched three flavours and has lined up three more for the future. The founders aim to use the funding proceeds to expand their sales team, enter business partnerships and for promotional events and overall operations. They are also looking for their next funding round of about five to six million to expand dramatically in bigger states.
“We aim to breakeven in 2-3 years and create a Rs 1000 crore-company in the next five years. If tomorrow a big brand comes up with a deal, we are open to that as well. Our aim is to make Barney’s synonymous with hard seltzers in India and eventually take the drink to unsaturated foreign markets,” says Gaurav.