Selling products priced at Rs 5 and Rs 10, this Coimbatore-based FMCG brand is catering to the masses
Prabhu Gandhikumar was working as a consultant in the US for many years before he moved back to India in 2012 to join his family business of manufacturing metal castings. He, however, felt a deep sense of dissatisfaction.
“In the US, I used to work for 15-16 hours a day. Life was very happening. However, when I came back, life became very slow. I opened a foundry but I didn’t feel sufficiently challenged there too.”
In 2016, he explored various sectors he could venture into, and beverages seemed like a good option. “I realised that people in the rural areas were consuming lassi, jeera masala and other drinks regularly. Moreover, holding a bottle was a very aspirational thing for them.”
What he also noticed was that daily wage earners yearned for carbonated drinks that were affordable yet tasty, especially during summer months like April, May and June. Most of the carbonated drinks in India are sold by FMCG giants such as Pepsi, Coca Cola and Nestle. A 300 ml Coca Cola can typically cost between Rs 20-35, a rather high order for those in the bottom of the wealth pyramid.
Moreover, according to several data reports, a daily wage worker, on an average, earns between Rs 9,000- Rs 10,000 a month. Sometimes, even less.
Prabhu says he found a real gap in the market. “We wanted to target people who were at the bottom of this segment, they were sort of getting neglected.”
And so, Prabhu and his wife, Brindha Vijayakumar, launchedFoods, focusing only on beverages, in 2016 with two flavours- mango and apple juice priced at Rs 10/-.
There was no looking back since, and the company later got converted into TABP Snacks and Beverages in 2018. The 200 ml beverage drinks sold by TABP cater to the rural markets. The target group includes daily wage workers who earn between Rs 250- Rs 300 a day.
Recently, TABP raised a pre-series A round of Rs 6 crore from Chand family office Yukti, LLP, and a mix of angel investors. The funding round was led by Probhus Ventures.
Catering to the masses
Making a quality and tasty drink priced at Rs 10 required an enormous amount of R&D, says Prabhu. He also took the advice of people directly connected to the rural population.
“Our distributors and super stockers formed the most important part of our market research team.” He further adds that directly interacting with the distributors helped him understand the pulse of his customers in the rural areas.
The kind of feedback Prabhu got from his distributors helped him launch the first few products- apple and mango juice under the brand name Plunge.
“We gave samples to the distributors who would distribute them and then come back to us with feedback like the people wanted a carbonated drink in apple or mango flavour or how much sugary the drink needed to be made, etc.”
The main concentrate of the drinks is made in the company’s own manufacturing unit in Coimbatore. For preparing the entire product, the business has partnered with third-party units (TPUs) in Coimbatore, Pondicherry, Mysore, Aurangabad, etc.
Today, TABP sells different types of drinks such as Cola, Jeera Masala, Paneer Soda Etc under the brand names Plunge and Gulp. It also sells a non-alcoholic beer - Thirsty Owl - priced at Rs 50.
TABP is currently available in five states, including Tamil Nadu, Odisha, Karnataka, Andhra Pradesh and Telangana. The business has scaled decently since its inception. Today, it sells through 1.2 lakh touchpoints which includes local bakeries, kiranas, hawkers, etc. It has a distribution network of more than 20,000.
A data-driven approach
Business technology has a huge impact on small businesses. “In the initial years, since we were operating on limited resources, we developed our own in-house cloud-based ERP system called ERP Genie.” Brindha, who is an engineer, took on this responsibility, besides deploying other new technologies and taking care of the company’s IT Systems.
The ERP system helps in taking orders, analysing demand, assigning work to TPUs, tracks production dispatches etc.
The system has also helped in collating important data. “We found out that during the wedding season, which is spread across some specific months, the demand for beverages picks up considerably.”
Prabhu and his team, took this data into consideration, started reaching out to caterers in Andhra Pradesh and Orissa, and sold their three litre bottles during their respective wedding seasons.
This helped in generating extra revenue and made up for the lean periods when the demand for beverages is low.
The company also launched snacks under the brand name- Snacks 91- 91 being India’s international dial code. “People in the south Indian market were looking for something salty that had tasty masalas.” This pushed us to come up with a range of snacks which includes flavours like Tangy Tomato, Fryums Pasta, Magic Masala, Choco Flakes, etc. All snack items are priced at Rs 5 per 10 grams.
The company has grown steadily over the last 2 years years. According to the numbers shared by Prabhu, TABP has grown from clocking Rs 92 lakh in FY17 to Rs 35.5 crore in FY21.
Like all businesses, Prabhu and his team too felt the impact of COVID-19, and continue to do so in the wake of the second wave. But it has not dampened their desire to go to the direct-to-consumer route. The highlight of the D2C channel will be a millet-based product line including cereals, choco flakes, muesli. etc. TABP is also in the process of getting listed on ecommerce platforms like Amazon.
As a founder, Prabhu is confident of the snack and beverage market’s potential. According to Mordor Intelligence, the India food and beverage packaging market was valued at $33.22 billion in 2020, and it is expected to reach $156.25 billion by 2026, at a CAGR of 29.88 percent during the forecast period (2021-2026).
The company plans to introduce a new line of products including immunity drinks, green tea, and energy drinks, which will all be priced between an average of Rs 15 to Rs 20 per 200ml.
Prabhu also says that he plans to expand to Goa and Maharashtra.