[Startup Bharat] How this finance professional returned from the US to start a cookie business in Vadodara
An alumni of Purdue and Harvard University, Kshiti Jikar Mehta worked as a finance professional in the US for nearly six years.
While in the US, Kshiti says cookies became like a comfort snack right through her college days, and this always stayed on the back of her mind.
Someone who was always passionate about cooking, when Kshiti and her husband returned home to Vadodara in 2017, she decided to get into the food business and zeroed in on the cookie segment.
“In a 9-5 job, the mind was in there, but not the heart, and I always wanted to do something which was passion driven,” says Kshiti, who launchedin 2019.
The Vadodara-based startup offers freshly baked and handcrafted cookies in many flavours and ships its products pan India.
The cookie market
To begin with, Kshiti did some market research on the cookie industry in India and saw gaps in the market.
She found that cookies were gaining popularity in India, especially with the Gen Z, and people even in locations outside of the metros were aware as well as consuming this snack. At the same time, cookies and biscuits were looked at as if they were the same product though they were different.
Added to this, the cookie market was highly unorganised with plenty of home bakers, but there were no companies or bakers which had a national or regional presence solely focused on this product.
“I became interested in the cookie business as it was an intersection of food, passion, and a business that is scalable,” says Kshiti.
She was very clear from day one that the business should be sustainable and profitable. The whole idea was to bring New York style artisanal cookies at an affordable price point, and most importantly, freshly baked cookies, says Kshiti, who started baking cookies from her mother-in-law’s kitchen in 2018.
There was another important criteria for her to look into as a young mother.
“Anything I do should justify my time away from the child,” she says.
A strong start
The initial days were spent in selling these cookies to friends and family. Encouraged by the positive response, Kshiti decided to formally register her business as The Cookie Co and decided to set up a commercial kitchen in 2019.
She says, “If cake and brownies are such a big hit, why not cookies. It is low-cost, travel-friendly, and has a longer shelf life.”
From here, there was no looking back for The Cookie Co as there was a high degree of repeat business and the cookies also went beyond Vadodara.
Kshiti claims that products of The Cookie Co have longer shelf life with no preservatives and are egg free.
“This (cookie) is a product which goes well with the youth of India and there are so many layers to it,” says Kshiti.
The cookie market
The bakery industry in India had an estimated annual turnover of $7.7 billion in 2020. The growth was largely driven by cookies and biscuit industry, accounting for nearly 72 percent of the sales.
The industry is expected to reach a value of $13.3 billion by 2025 at CAGR of 9.1 percent, according to a study done by Sunil Goenka on the India’s Bakery Industry.
At present, the bootstrapped startup sells around 8,000-9,000 cookies on average per month, and this number goes up during festive season.
Image credit: The Cookie Co.
The customers of The Cookie Co cut across segment starting from homes, companies, shops, and supermarkets.
The startup operates both on direct-to-consumer (D2C) channel and ecommerce model, where its product has reached over 25 cities across the country.
Scaling the business
Now, Kshiti wants to scale this business and take it national. This would mean having an offline presence with a quick service restaurant (QSR) model.
“We want to shift from the cloud kitchen model to QSR where customers can have instore experience and give us more traffic,” she says.
Kshiti aims to have the first QSR outlet in Vadodara, but is very clear that it will have a lean operation where it will measure revenue per square feet and aims to be profitable. The plans are to have company-owned and franchises across the country.
The Cookie Co has been growing at over 100 percent annually since its launch, and Kshiti points out the growth has been purely organic without any marketing spend. She adds that her repeat customer business stands at 89 percent.
The business which started with an initial investment of Rs 50,000 is now close to touching a revenue of Rs 30 lakh per year.
The cookie market is a highly unorganised segment with numerous home bakers, but there are no national players who are solely focused on cookies.
There are leading food companies such as Britannia, Parle, ITC, Theobroma, and many others who also sell cookies along with other products.
“Our USP is the consistency in the product where the cookie is available at an affordable price point at high quality,” says Kshiti.
“This is a very easy business to get into, but difficult to sustain over a longer period of time,” she adds.
As a self-sustaining business with no debt and profits ploughed back into the venture, Kshiti plans to go national and raise funding as well.
The Cookie Co is a small team with little less than 20 members at present, but 95 percent of these employees are women.
“I am proud of the fact that the business was started in my home town and there is a great support system for me here,” says Kshiti.