Hyderabad-based Ormeal Foods takes organic route to provide healthy food to babies
A morning spent with his seven-month-old nephew Medhansu made Satish Kumar realise the importance of children having nutritious food.
“I saw my nephew looking at me while I was having some fruit salad. While I knew that a child’s diet should initially incorporate fruits and vegetables to ensure they get the required nutrients, I wondered when my nephew will be introduced to these nutritious fruits. A few minutes spent with him urged me to provide him and kids of his age with healthy, clean and tasty food. Ormeal Foods was born the very next day,” he says.
Siva Satish Kumar (33) approached Pula Praveen Kumar (40), who is also an investor, and the duo set up Ormeal Foods Pvt Ltd in Hyderabad in 2015. The company aims to provide a better alternative to the conventional baby food industry by producing nutritious baby food products of certified organic origin.
It offers a range of ready-to-eat organic baby foods such as fine fruit purees, which are appropriate for babies six months and older. Praveen says the products are free of artificial flavours, preservatives, salt and sugar.
Ormeal sells its products online as well as through select offline partner stores. A bootstrapped venture, the company was started with an initial seed funding of Rs 1 crore.
Praveen says, the main problem the company faced was introducing wholesome, healthy and organic food for babies. He explored many options and travelled extensively across India to find a solution, but was not satisfied. So he decided to go to France to find the best raw materials and the certified process and expertise in the baby food segment. Here he tried the organic, preservative-free food, with a taste and colour that would appeal the little ones.
Ormeal is today mentored and guided by well-known food scientists, nutritionists and medical consultants across the country. The products are also EU certified and are made in France.
Apart from their entrepreneurial venture, the founders have different backgrounds. Praveen K Pula is a UK-based investor and is helping several startups realise their dreams. He was also recognised as India’s Emerging leader by the World Consulting and Research Corporation in 2014. He is the founder of WOXSEN School of Business in Hyderabad and EThames Graduate School in the UK.
Satish Kumar, after securing a postgraduate degree in Entrepreneurial Development, also gained six years of corporate experience. His urge and passion towards providing healthy and clean food to the little ones got him a step closer to starting Ormeal.
Market and competitors
The founders initially tried to identify the gaps in the Indian market in terms of aspirational baby food. Praveen, who believes organic food is the future, says:
“The millennials today want the best food for their little ones and it has to be ready to eat.”
A leading market research firm has estimated the Indian baby food market to be $240 million, and says the figure will go past $300 million by 2020 at a healthy CAGR of 10-12 percent. Currently, some of the major players in the organic baby food segment are Pristine Organics and Early Foods.
Praveen says, Ormeal has created a dominant position for itself by taking more than 10 percent market share in the Indian organic baby food space within just 11 months of its sales operations.
“We emphasise on minute details like the seven-layer patented packaging, wherein the contents are packed in an inert atmosphere where there is no scope for any microbial development to contaminate the food. This has given rise to some of the most pristine baby food products,” he adds.
Praveen says, entering a completely unknown and niche space is often not advised, but for those with a clear vision and strategy, success is almost certain.
Being one of the first mover in the space, there were countless opportunities, but there was no set benchmark.
“But in our case, we did not have this category in our country. Nobody was thinking of feeding organic food to babies. Hence, to create a category and teach the customers about it was a big hurdle,” he states.
“Initially there was no one to look up to and there were no government norms as well. While things have eased up in the government set up, for a new concept like ours, the guidelines are still vague,” says Praveen.
“Government reforms, laws and regulations play a very important role in the growth of any business. Being a new venture in the organic space, the company also faced a lot of hurdles in terms of labelling of the product and food safety norms. Many times the government brings laws into force but their compliance procedure is not clearly stated,” he adds.
The other major problem was getting a team together. According to Praveen, the most valuable resource to a startup, even more than a financial resource, is the human resource. Today, Ormeal has 31 people (direct and indirect) working with it. The company, which has a pan-India presence, says it has over the years grown ten-fold in its employee count.
Reaching out to customers
Praveen says, “Nowadays, social media is the best tool to reach out to customers. It has helped the business models/systems to become truly customer-centric and we are no exception. We do not believe in traditional marketing, rather in user engagement practices first hand. Hence we have our #mommydiaries series and blogs available for users to interact directly with us on social media handles as well as on Ormeal.com.”
The company wants to play a strong role in the overall value chain by bringing the economies of scale in the organic food industry. Praveen says, “Ormeal has a very clear and focused roadmap in terms of product launch and the presence across the various stages and categories of baby food. With a great support and acceptance from the customers, we are more than ready to prepone the future launches.”
“Since we began our operations, the buzz among the baby food buyers has already invited major players to consider organic food and purees for babies in India. So, if someone wishes to enter this part of the market, there has never been a better time. But they should come with a strong vision and long-term plans,” he says.