This 23-year-old entrepreneur is frying up a new D2C recipe for his family business in edible oil
Ashok Oil & Food Products has been an export-focused edible oil business, but with its new brand, it is now targeting the new-age Indian consumers sold on natural and healthy products.
Even as a few recent changes in the edible oil market in India have heated up the wok so to speak, it has brought with it new possibilities too.
Consider this, India has primarily imported refined edible oil or crude stock to meet its supply. In 2019, India imported 15 million tonnes of edible oils worth approx Rs 7,300 crore.
However, because of COVID-induced lockdowns since 2020, imports were impacted but the domestic industry rose to the occasion and was able to balance the demand and supply gap so much so that the Indian oil trade body, The Solvent Extractor’s Association of India, called for an import ban to help local production.
Product range from Ashok Oil.
Twenty-three-year-old Karan Mehta, whose family has been in the edible oil industry since 1948, has been watching these developments in the domestic market and the emergence of a new Indian consumer class with keen interest.
A niche product
Ashok Oil & Food Products was started by his grandfather Ramniklal Mehta in 1948 at Shivaji Park, Dadar, Mumbai, and has been an export-focused business in Indian-origin seeds oils in their natural filtered and cold-pressed form.
“The reason we don’t sell our oils in India, which is a huge market, is simply because India imports 70-80 percent of its edible oil requirements which consists mainly of sunflower, palm, and soybean oils in huge quantities which are refined oils,” says Karan, who has a background in investment banking.
Besides the fact that refined oil is unhealthy as compared to cold-pressed oil, he says the edible oil market is filled with malpractices and big organisations easily get away with it because of their strong marketing budgets.
Despite the big players in the market, Karan, who joined the business more than a year ago, wants to create a new, premium, healthy edible oil D2C brand, specifically focused on the Indian market.
“Although the Indian market was different until a few years ago, I feel that India is an evolved market now and will accept a far superior and honest product in spite of it being a bit steep on the price scale,” he says.
With RAW Pressery as a reference, Karan believes he can create his own niche in the edible oil market in India, the same way RAW did in the packaged juice market.
Product range with transparent packaging.
Slow and steady growth
The company started by dealing in sesame and coconut oil in Mumbai local market delivering to wholesalers and retailers under its brand name Ace.
“Until 1965, we used to crush our own seeds and do the processing and packaging of the oil until the space in Shivaji Park was not enough. We set up our manufacturing facilities in Gujarat where we procured our own seeds, extracted the oil, and got the oil delivered to Bombay, as the city was known then,” says Karan.
In the early 1990s, the company started exporting to the Middle East. In 2006, the company shifted its entire processing and packaging plant to Bhiwandi, Thane. Once it received approval from the USFDA for its products, it opened doors for new markets in the UK, EU, the US, and Canada.
The company — led by its four partners, Karan’s father Dinesh Mehta, and brothers Hardik and Hiren, and Karan himself — has over time expanded its manufacturing and product range. The total oil processed in its manufacturing sites is around 85 metric tonnes (MT) per month out of which around 70 MT is exported and the rest is sold in India. Of the four partners, their father Dinesh Mehta looks after the overall operations and management, Hiren Mehta looks after the export division, Hardik Mehta looks after finance and purchases, while Karan looks after the new brand development.
Promise of pure
Under its brand Ace, the company is catering to the Indian diaspora in North America, the EU, the UK, Australia, New Zealand, and the Middle East. Now, the new brand Ace Gold — with a motto ‘Say no to refined oils’ — is being made available in the domestic market as a D2C brand.
The brand is available on Amazon and Flipkart and the company’s own ecommerce store, and within a month of its launch recently has clocked sales worth Rs 1 lakh without any major marketing promotions.
The partners of Ashok Oil & Food Products with staff.
“We will soon make ourselves available across other online grocery platforms for a wide digital presence,” says Karan, adding that they are also set to roll out the products in the offline retail market, starting with Mumbai and then expanding to other metro and Tier-I cites first.
According to Karan, the packaging developed for Ace Gold is a mix of glass and recyclable transparent PET bottles with an intention to always let the actual colour of the oil be visible to its customers.
“Most packaging available in the market use HDPE material, which is completely opaque. It is our way of showing transparency and the pure quality of our products.”
There aren’t many small brands that have developed a big niche for themselves in the edible oil segment primarily due to the tough price competition from the major brands and the inability to match their huge marketing budgets.
Karan aims to work with very thin margins and initially only focus on volumes and brand building. “We will focus heavily on digital and collaborate with content creators on Instagram and Youtube,” he adds.
YourStory’s flagship startup-tech and leadership conference will return virtually for its 13th edition on October 25-30, 2021. Sign up for updates on TechSparks or to express your interest in partnerships and speaker opportunities here.
For more on TechSparks 2021, click here.
Applications are now open for Tech30 2021, a list of 30 most promising tech startups from India. Apply or nominate an early-stage startup to become a Tech30 2021 startup here.
Edited by Saheli Sen Gupta