How nutritional supplements company Cosmic Nutracos hit Rs 207 Cr in revenues with Gaia despite early setbacks
Cosmic Nutracos, a Delhi-based personal care and nutritional supplements company, started Gaia as an offline brand and quickly transformed into aD2C business. Founded by Dolly Kumar in 2009, it is a health and wellness business with a presence in offline stores.
Gaia has a presence in more than 25,000 retail outlets and over 600 modern trade outlets. It sells on ecommerce platforms like Amazon, Flipkart, Paytm Mall, Big Basket, Health Kart, Net Meds, and Jio Mart.
Over the last four years, the brand has moved towards D2C and is more focused on ecommerce.
"Around 12 years ago, we noticed that a large section of Indians was actively becoming health-conscious – a trend that had already been prevalent in developed economies for some time. We realised that people’s need to become healthier was manifesting in several ways – through proactive regular health-check-ups, exercise at home, gyms, and parks, as well as a shift in dietary preferences towards healthier alternatives," Dolly tells SMBStory.
After completing her bachelor's of technology in cosmetic engineering from Nagpur University in 1993, Dolly worked in various companies, one of them being Colorbar Cosmetics. She learnt about health supplements while interacting with her clients and realised that she could launch something of her own using her experience and advice from a bunch of nutritional experts.
Dolly says the name Gaia was inspired by the Gaia Theory of James Lovelock, who posited that the earth is a vast self-regulating organism. Gaia was a Greek goddess, and the founder thought the name suitable for a brand that explores and extracts health secrets of the earth’s natural resources.
"We believe that as the earth has the ability to regenerate itself, and so do we. Gaia was founded on the belief that nature, through the earth's diversity of flora and fauna, offers us the best solutions for all our health and personal care needs. Combining the miracles of nature with the rigour of science, Gaia offers a range of nutritional supplements and natural substitutes that aid the body's natural regeneration process," Dolly says.
Dolly started Gaia by providing nutritional supplements –spirulina, glucosamine, neem, aloe vera, and one variant each of green tea and stevia.
In the first year, the team had limited funds and the distribution was negligible, but they slowly built the brand, adding new products and SKUs. It took her 10 years to expand the distribution and spread awareness through park activations and the digital medium. That's where the growth in ecommerce helped the brand.
"Gaia offers a range of healthy food and nutritional supplements. We cater to the needs of every individual –especially homemakers, fitness enthusiasts, and people conscious about their weight," Dolly says.
Gaia’s product portfolio offers a range of nutritional supplements like flax oil, amla, curcumin, multivitamins, calcium tablets with D3,as well as health food substitutes like muesli, honey, olive oil, cookies, oats, stevia, granola bars, trail mix, whey protein, everyday protein, and organic spices.
The nutritional supplements are categorised into verticals such as Organics, Foods, Plus, Sports, and Lite, and offer over 75 products.
"Our products are healthier substitutes as they are full of nutrients – fibre, protein, and vitamins. They have no cholesterol and no trans-fat," Dolly says.
Founder of Cosmic Nutracos, Dolly Kumar
Comic Nutracos has seen many ups and downs. For the first three years, the team envisioned making Gaia a pan-India brand with distribution networks in every corner of the country.
They took the risk to launch the brand in all segments – SEC A, B and C salary categories. The SEC Classification is the classification of Indian consumers on the basis of parameters. Traditionally the two parameters used to categorise consumers were: Occupation and Education of the chief wage earner (Head) of the households.
"We were expanding in size without realising that we had a small budget and where we should focus. We were a small brand, and very new to retailers. They only wanted to do business on a credit basis. Even in terms of product formulations and quality, it was not working out – the quality was not up to the mark as compared to our competitors."
Also, some of the big manufacturers didn’t want to manufacture for Cosmic Nutracos because of their small requirements in terms of quantity, and those who agreed could not achieve the quality they wanted.
The brand had no way of tracking stocks, and had to face losses when it expired.
However, things started to change in 2013 when the company began streamlining processes and set up its own plant. They tracked their stocks digitally and also avoided working with retailers on credit.
The sudden nationwide lockdown due to the coronavirus pandemic also affected business, since Cosmic Nutracos’ plans for the new financial year could not be executed. However, they streamlined things and made contingency plans.
The company started a 48-hour doorstep delivery service and has received a very good response.
The business model
As per details available with the Register of Companies, the brand has revenues (net sales) of Rs 207 crore as of March 2019, up from Rs 137.9 crore in 2018, and has plans to scale up towards Rs 300 crore.
The business has been profitable. While the founder hasn’t revealed investment details, she says,
“We funded the company ourselves and did not take any outside funding or private equity. Furthermore, we are at zero debt.”
Being debt-free, Dolly is using the cash to expand to newer product lines and modernise operations. Currently, sources say that Cosmic Nutracos revenue is inching closer to Rs 250 crore.
In the next 18 months, the brand's primary focus will be on launching new products and bringing innovative formats in marketing. Gaia competes with Kellogg's and Baggry's in breakfast cereals like Muesli and Oats, Twinings in Green Tea, Borges and Del Monte in Olive Oil, and so on..
"After the coronavirus pandemic, there has been a huge rise in demand for nutritional supplements and we will build the categories of our nutritional supplement. We will work on a very strong supply chain management and strengthen ecommerce," Dolly says.