Company: Green Castle Food and Beverages
Founders: Naveen Kumar, Karthick Sukumaaran, Karthikeyan E, Mitlesh Kumar
Turnover: Rs 24 lakh
Ice cream is one of the most preferred and popular frozen dairy products across the world. While ice-cream is the English version of the frozen dessert, its Indian counterpart is the denser and creamier ‘Kulfi’. Available in various flavours, kulfi is a local favourite. When four engineers in Chennai wanted to come together and launch a business, they struck upon the idea of kulfis, after looking at the emergence of several kulfi outlets in the city.
“We saw that people loved kulfi and they went out to eat it even at nights and rainy days,” says 25-year-old Naveen Kumar. “It didn’t just do well because of the hot climate - it sold at anytime and anywhere in Chennai.” This sparked the formation of Green Castle Food and Beverages in 2017, which sells kulfis under the brand ‘Boozo Kulfi.’ The company says clocked a turnover if Rs 24 lakh in just a year.
Excerpts from an interaction with SMBStory:
SMBStory: How did the company reach Rs 24 lakh turnover in just one year?
Naveen Kumar: Karthick, Karthikeyan, Mitlesh and I, all 25-years-old, did our engineering together, but were working in different sectors. While our work background varied from marketing and finance to human resources, we wanted to bring all our experiences together under a single business. When we saw high demand for kulfi, we decided to approached the MSME department.
The department educated us about various government opportunities and schemes available for upcoming entrepreneurs. We each contributed Rs 10,000, and then later on chipped in another lakh. We also took a loan for Rs 26 lakh. Armed with technical know-how as well as funds, we began manufacturing and selling kulfis in public spaces such as parks and beaches and were able to sell a lot of kulfis.
SMBS: What were the key milestones in your journey so far?
NK: Initially, we were manufacturing kulfis in a very small place, which was around 80 square feet. Later, we moved to a new factory, which is 1,000 square feet. We consider this as one of our major milestone. Another major win has been getting an approval for a business loan, which was easier as we included our Udyog Aadhaar certificate in the loan application.
After explaining our vision, mission and goals, we got a business loan of Rs 26 lakh from Canara Bank. Another milestone in our journey has been the acquisition of machinery, which we installed in our factories, and this has resulted in good productivity.
SMBS: What is the market size of the sector and how are you different from the competition?
NK: As the thin line differentiating ice creams from kulfis is slowly fading, we consider the market size of the sector to be nearly Rs 5,000 crore. Since we are still new in the business, we differentiate Boozo Kulfi by directly supplying our products to retail shops. Our competitors, however, mostly focus on selling through their own outlets. By adopting this method, we are able to reach our customers at their doorsteps. Our pricing is also very affordable compared to our competitors.
SMBS: What are your challenges in terms of sustaining and growing the business?
NK: As first generation businessmen, we went through a lot of struggle in understanding how the business world works. This includes negotiation, financial literacy, knowledge about taxes, etc. We feel that upcoming entrepreneurs like us would benefit a lot from workshops and training about entrepreneurship skills (leadership, sales, marketing and decision making) and financial literacy (accounting, tax, personal finance and insurance).
SMBS: How do you manage critical areas such as supplier management, cash flow management and capital management?
NK: In all our dealings with our suppliers, we do everything with integrity. We do what we say and that develops a relationship based upon trust, which is the fundamental building block of a business relationship. Through our trust, they get to know how we do business and prioritise our transactions. We also follow a strict discipline of taking a constant percentage of our profits as a backup fund. We try to avoid giving products on credit. We also believe in depositing cash each day in banks, which serves as a token of trust with our bankers.
SMBS: What is your customer acquisition strategy?
NK: We focus on customer acquisition through direct relationships in order to build brand recognition and value, by setting up stalls in densely-populated areas, carnivals and trade centres. We also utilise digital media to promote our activities and build relationships on social media.
SMBS: What has been the impact of your work on the customers and society?
NK: As a manufacturer of a dairy product, we are able to sense a huge potential in the market. We see happiness in our customers when they taste our products, and this goes for people from all income ranges. On a large scale, we see that a huge potential in market translates to job employment for a large number of people from our end. Further, the tax that we pay makes us feel contented because we know we are part of making India a developed nation.
SMBS: What is your advice to people who want to set up their business in the same sector?
NK: Positive attitude, perseverance and constantly striving for progress are the watchwords of entrepreneurship. Make clear and measurable goals and focus all energies to attain it. Never let fear stop you. It is also important to allocate time, energy and resources for personal development.
SMBS: What is your dream for your business in the future?
NK: We want to become a market player in the dairy industry and contribute to the nation’s growth by employing people and paying our taxes. We dream of becoming a listed company, with our stocks traded and all customers becoming shareholders in our company. By 2023, Green Castle aims to set up a dairy plan.
(This story is published in partnership with the MSME Ministry to showcase success stories of SMEs)