How this beverage startup beat the pandemic to see an ARR of Rs 16 Cr
The COVID-19 pandemic was harsh to the food and beverage industry, which accounts for around three percent of the country’s GDP. IBEF predicted that the COVID-19 induced nationwide lockdown would lead to a quarter of all restaurants shutting down by the end of 2020.
Unfortunately, Mumbai-basedwas one of the businesses which had to stop its operations. The beverage startup was founded in September 2019 by Farhan Gigani, Thosif Gigani, and Satish Negi. The company started operations in January 2020, offering RTDs (ready-to-drink) that ranged from cold coffee to mojitos.
“With COVID-19, physical markets were hardly functioning. Due to the market scenario, we had to get rid of our stock at a heavily discounted price to avoid expiry. We realised it was not the right time to launch a new product in the market and stopped operations,” says Satish in an interaction with YourStory.
However, the co-founders started operations again in August the same year, and this time there was no looking back.
The startup sold around 3.6 million units of beverages in 2021 itself, recording a GMV (gross merchandise value) sales value of around Rs 16 crore.
Satish Negi, Co-founder of CRAVOVA
Convenience in a bottle
When arranging for a get-together at home with friends, Satish wanted to buy snacks and beverages. “The only options available were the regular colas and juices. We then decided to try our hands on preparing something more exciting,” he says.
After binge watching a couple of YouTube videos, he ended up preparing mojitos and cold coffee as welcome drinks for the guests. This became the eureka moment of CRAVOVA.
“We are taking away home preparation hassle for consumers,” says Satish.
CRAVOVA offers RTDs like cold coffee and mocktails. Its mocktail range consists of the likes of mojitos–classic, watermelon, kiwi, peach, orange, green apple, and fresh lemonade.
Additionally, it offers cold coffee–classic, frappe, hazelnut, and mocha; roasted peanuts, and chickpea puffs.
Cold coffee variations offered by CRAVOVA
The three co-founders met each other through common acquaintances. Satish (40) comes with 15-years of research and consulting experience, Farhan (34) is a commercial pilot and has 13-years of experience in FMCG distribution. Thosif (33) has 11-years of experience in FMCG distribution. At present, the startup has a team of 15 employees.
CRAVOVA operates on a lean CAPEX model. The startup gets its products manufactured from a contract manufacturer and they are then shipped to CRAVOVA’s warehouse and distributed across the country.
The startup leverages technology in its production unit to manage warehouse inward, outward, stock updates, and to manage and monitor the sales force.
CRAVOVA is presently available across 25 Indian cities, including all the major metro cities, and has significant presence in Mumbai and Gujarat. It is also present in Tier-II cities like Amritsar, Calicut, Kashmir, and Dehradun, among others. The omnichannel brand has presence across modern trade, general trade, and has online presence as well. It works through distributors and sales channel partners. CRAVOVA products are available online on Flipkart, Amazon, and Bigbasket.
The sparkling mojitos are priced at Rs 50 for a 300 ml bottle; and the cold coffee costs Rs 50 for a 200 ml bottle. The chickpea puffs and roasted peanuts are priced at Rs 40 and Rs 25, respectively.
Mojito variations offered by CRAVOVA
“In September 2021, the government increased the GST rate for carbonated beverages. Our RTD sparking mojito falls into that category. So, without much control, we had to increase the MRP by 20 percent. We thought it would impact our sales, but surprisingly, consumers didn’t mind paying a little extra for the product, and we recorded an increase in our sales numbers,” says Satish.
Early last year, Suresh Narayan, Chairman, Nestle India, forecasted that the Indian packaged food industry will be valued at $70 billion in the next five to 10 years. He attributed this two-fold growth to demographic dividends, rising popularity of ecommerce, and overall economic growth.
Several D2C coffee brands have been taking up the shelves in supermarkets and kirana stores. When it comes to bottled cold coffee, CRAVOVA competes with the likes of Raw Pressery, Sleepy Owl, Cothas Coffee, Nescafe, and Starbucks. Similarly, under its snacking segment, CRAVOVA competes with the likes of Paper Boat, Nutty Gritties, and Jabsons, among others.
For mocktails, “We are competing with the RTD brands. But the market is quite big for all of us to function and thrive simultaneously,” Satish says.
Additionally, he adds, “We are positioned in the mass premium segment as most of the products in our category are either premium or economical. We offer these products at quite an affordable price so the reach can be maximised.”
Since last financial year, CRAVOVA has recorded a 500 percent growth, selling 2.3 million units of mojitos in one year. “We are targeting to reach Rs 100 crore GMC sales in the next couple of years,” says Satish.
Going forward, the startup plans to further penetrate in the existing cities and simultaneously grow horizontally through indirect distribution channels.
“We are bullish about online and a good chunk of investment will be routed towards online sales,” Satish adds.
CRAVOVA has already raised an angel round of funding, the details of which the team refused to reveal.