The Indian FMCG sector presents a plethora of opportunities for first generation entrepreneurs. However, founders often face resource pressures for product differentiation, branding, media usage, and distribution, especially in the early stages of launch. Brand Capital curated a mentoring session in Mumbai to help FMCG entrepreneurs meet experienced mentors who talked them through these challenges.
Brand Capital is the strategic investment arm of The Times Group, with a portfolio worth a few billion dollars. As part of its mentoring sessions, Brand Capital invites young entrepreneurs for an exclusive mentoring session with industry stalwarts. These experts help entrepreneurs envision growth plans in areas such as business strategy, branding, distribution, finance and funding.
The start-up wave has caught the fancy of the first time FMCG entrepreneur. Many companies with niche and differentiated offerings are evolving in the consumer sector, which has been historically dominated by large Indian conglomerates and established international brands. Brand Capital believes that the Indian FMCG market, which is expected to reach a size of $200 billion by 2020, holds a huge potential.With a burgeoning population and varied consumer preferences, each niche is big enough offer for branded play.
Any forays into the FMCG consumer space require entrepreneurs to focus on multiple aspects of product differentiation, brand building and distribution network. Often there are many options and need for agile decisions that make a significant impact on the very survival of business. Founders need guidance from industry experts to help make decisions, but limited access and even more limited time renders it into inaction.
On 12th January 2018, Brand Capital has mentored a select group of entrepreneurs in the FMCG space. Brand Capital curated an esteemed panel comprising industry stalwarts and domain experts to mentor these entrepreneurs. The panel of mentors included Avani Davda, Managing Director, Godrej Nature's Basket; Rohan Mirchandani, Co-founder & CEO, Drums Food; Rajesh Sehgal, CFA, Managing Partner, Equanimity Investments; Kallol Banerjee, Co-founder, Faasos Food Services; Niteen Bhagwat, Vice-Chairman, FCB Interface; Vinod Nair, Managing Director, Network Advertising; Tushar Parekh, Founder, Managing Director & CEO of Excelus Star Foodbev; Mayuresh Kore, Chief Financial Officer, Adlabs Entertainment Limited; Gaurang Chandarana, Founder, Wellzee.com; Ashok Venkatramani, Former CEO, ABP News Network Pvt. Ltd.
The mentee companies were predominantly from the Food & Beverage space and included Poshtik Pregnancy Care - maker of nutrition and skin care, Happa Foods which has a range of nutritious baby food, Daivya Aahar Ready to Eat foods and gravies, Eat Easy Foods Ready to Cook Dehydrated meals, Mexer Beverages - Ready to Drink, Caffeine Free, Non- Alcoholic Beverages & Mixers and all-natural healthy snack products brand Karrotz.
The mentors touched upon various key aspects of the scale up journey for these businesses. All business need to start with a vision statement and have immense clarity on what problem they are trying to solve, stated Vinod Nair, Managing Director of Network Advertising. Ashok Venkatramani who has over 20 years of experience with HUL, stressed on the fact that the Target Group needs to be sharply defined, whether it's in terms of sociographic, demographic, geographic or psychographic characteristics.
For many companies in the FMCG space, it is tempting to launch a wide range of SKUs from the very beginning to have a suitable offering for all demographic and income levels. While this strategy may be effective for larger companies, it could be detrimental to start-ups, as pointed out by Rohan Mirchandani, Co-founder of Drums Food. He emphasized that for start-ups, it was important to launch only one or at best two SKUs at the outset. The effort should be to make one hero product before launching other products.
Avani Davda, Managing Director at India's leading gourmet retailer, Godrej's Nature's Basket stressed on the fact that consumers buy stories and not products. It was important for entrepreneurs to communicate their brand story and their raison d'etre to their TG. For FMCG companies, these stories can be part of the product packaging itself. Niteen Bhagwat, a veteran in advertising and Vice-Chairman of FCB Interface, suggested an innovative strategy of recruitment. He emphasised that there was a large workforce of women who were looking to restart their careers and were highly qualified and experienced.
Many mentees felt that distribution is a key challenge in a market like India, and there was a persistent dilemma on online vs offline, modern vs general trade and B2B vs B2C distribution. Avani advised on the kind of margins that they should target before going for a full-fledged distribution strategy. It was also important to first focus on the depth rather than the breadth of the distribution network.
All mentee companies expressed gratitude to the mentors for sharing their wisdom and insights at the Brand Capital mentoring program.