A startup that earned ₹15 crore selling juices in India’s suburbs is now looking at international expansion
Groovywas started by two brothers Mitkaran Singh Ghai and Rajneesh Sharma in 2019 under the banner Enhaz Beverages.
- The company currently has two manufacturing plants in Uttarakhand and Jammu and Kashmir, that produce 700 pouches per minute.
- The duo have an experience of two decades in the juice manufacturing business, and have been co-packers for Kingfisher’s club soda and water.
AdvertisementIn 2019, what was termed as the worst year for India’s fast moving consumer goods (FMCG) industry, two brothers decided to step into this domain by unveiling their juice brand Groovy, specifically targeting the Tier II, III and beyond regions of the country.
While the brand was launched in 2019 under Enhaz Beverages, it hit the market in August 2020 as the country was still struggling to minimise the exposure to the COVID-19 pandemic. If 2019 brought a slowdown in demand for FMCG brands, 2020 was the year filled with complexities in operations and supply chain.
The company, started by two brothers Mitkaran Singh Ghai and Rajneesh Sharma with an initial investment of ₹10 lakh, specifically focuses on high quality fruit juices priced at ₹10 to offer better quality products to the underserved markets in India.
Enhaz Beverages’ product line is claimed to be free from any preservatives and comes in six flavours — mango, guava, pomegranate, mint-o-lemon, lychee and mixed fruit. It will be further expanded in the coming years, as the company introduces other packs within the range of ₹30-₹50.
Just like other FMCG companies, Groovy also faced many challenges due to the pandemic. It imported all the machinery from China in January 2020 and was set to welcome a team of Chinese engineers to set them up, but the government decided to close all travel routes from China with the emergence of COVID-19.
Clocking ₹15 crore in 10 months
The founders of the company waited a couple of months before starting to set up the machinery themselves. The only way to communicate with the teams in China was by email, as WeChat was banned in India and phone calls were definitely not an option. To add to the troubles, the manuals too were in Mandarin.
Despite all the odds, Groovy managed to set up the machines and clock sales worth ₹15 crore in the first 10 months of its operations, completely relying on the underserved regions of India. It has marked its presence across Jammu and Kashmir, Uttarakhand, Uttar Pradesh and Gujarat over the last one year. Its products are currently present across one lakh retail counters across these regions.
“Whatever we have sold, the sale of ₹15 crore, has been through our offline channels. To add on, the sale has come from one plant in Uttarakhand plant… Our prior experience in this segment helped us in our networking and our distribution channel, which were already set in certain parts of the country. So, that is where we got lucky or you know our effort paid off initially,” Sharma added.
It had set up its first plant in Uttarakhand and second one in Jammu and Kashmir in April 2021. The company now claims to have a capacity to manufacture upto 700 pouches per minute, with the new infrastructure in place.
The claims that they would have been in line to crack ₹50 crore in revenue if it was not for the pandemic. It expects to hit the ₹30 crore mark in the financial year 2022, despite the second and the expected third wave of the pandemic hitting the country.
Prices at ₹10, available in 6 flavours for underserved Indians
Both Ghai and Sharma have been in the FMCG segment for almost two decades, but in the business-to-business (B2B) side of things. They have been co-packers for India’s well-known beer brand Kingfisher’s water and carbonated soda from 2000. Besides this, they have also been consultants for Campa Cola, leading seven projects pan India for setting up water, carbonated water, cold drink and juice plants for the company.
Explaining their journey, Sharma added that they had been thinking of venturing into the consumer side of things since 2015 and decided to finally step in 2019.
Ghai added that Enhaz was not worried about the demand slowdown when they entered the market in 2019. He added that slowdown had impacted products within a higher price range, but products within the price range of ₹5-₹10 were flourishing. “The reach of a good product is not everywhere, especially not in the smaller towns. We wanted to come up with a ₹10 rupees product to solve this issue,” he added.
AdvertisementIn the fruit juice business, Groovy is not only competing with other Indian brands like Paper Boat and Raw Pressery, but also international brands like
However, 2020 was a challenging year for the Asian FMCG market that witnessed lower growth, according to a report by Nielsen.
Groovy looks at domestic, international expansion within a year of launch
Groovy is now underway to set up their plant in New Delhi to centrally manage all the locations it is in, and further expand to other regions of the country with an investment of $1.5-2 million.
The company will be taking up the north Indian distribution itself and further expand to the southern part of India through franchising in order to reduce its time and cost of distribution. It aims to cover about 80% of the country by the end of 2021.
“We are opening up our head office in Delhi so that we can monitor units in different parts of the country, so as to centralise the operations. We are hiring good salespeople and marketing people to set up distribution channels in different parts of the country. We are already in talks with somebody to give a franchise in the south of the country, so that we can start our operations in south India. By the end of this [calendar] year, we should have. We should be covering, I think, 80% of the country,” Sharma added.
It also has international expansion on its agenda and is looking into other South Asian Association of Regional Cooperation (SAARC) regions except Pakistan. SAARC is a cooperative frame between Afghanistan, Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan and Sri Lanka.
Groovy is also planning to launch a revamped, sugar-free version of its products in the Middle East market. It is currently working on United States’ Food and Drug Administration (FDA) and halal approval to clear the steps towards its international expansion.
Failure to pivot, COVID-19 blues force Amazon-backed Shuttl to look for a buyer
Payments firm Pine Labs raises $600 million as it plans to go public by 2022
AdvertisementWhy restrict e-commerce players like Flipkart and Amazon when offline retailers follow the same practices, ask industry experts
Popular on BI
- The e-auction closing date of 1,200 gifts given to PM Modi, extended
- Swiss banking giant Credit Suisse fighting for its survival says report
- IAF to induct first batch of indigenously-developed light combat vehicles on Monday
- Infosys to lead IT sector’s Q2 show with 4% revenue growth, says Jefferies
- IISC joins hands with AIIMS Rishikesh to develop algorithm that can read brain scans to detect epilepsy