Jeetendra Bhandari says that quick commerce has been a game changer as a ten-minute proposition versus 20, 22 or 25 minutes is always going to be more attractive
Emphasising that the demand from the non-metro cities is encouraging and has been doing better than some well-known suburbs of Bombay or Delhi, Jeetendra Bhandari, Founder, Walko Food Company, has highlighted that the company is looking to capitalise on the momentum and grow in the range of 35 to 40 per cent each year.
In an interaction with BW Retail World, Bhandari noted that quick commerce has been a game changer in the product category they deal in, as a ten-minute proposition versus 20, 22 or 25 minutes is always going to be more attractive to the consumers. Edited Excerpts:
Since this sector is very competitive in nature, who do you consider as your core consumer today and how has that profile evolved over a period of time?
People like ice creams from two-year-olds to 80-year-olds. People have been a little conscious about the quality that appears to be in the last few years or maybe a couple of decades. With respect to the segmentation, there are the youthful brands and then the people who are more conscious about sugar-free or sugarless ice creams. But all in all, I think some people like to have premium type of ice creams, who want to go after the right ingredients.
I think the insights are primarily about the brand that we have. I have been in the United States, and people consume ice cream much more than we consume here. It is an evolving category on the consumption side. Five years ago, Indians’ per capita consumption was 400 ml. Today, it has moved to one litre. The US is at 24 litre. China is at about 12 litre. We have a long way to go. People are getting fonder of dessert after a meal. Ice cream has started taking more share of that.
Since the trend has been moving from occasion-led eating to experience-led eating. Would you define the Indian consumers as more brand loyal or more experimental?
Occasion-driven eating is, of course, a thing; if you are at weddings and parties, people eat. But people have started consuming more, replacing other desserts with ice cream as a dessert. From what I have read and what I feel, they switch between two or three brands. There is no ‘The Coca-Cola’ yet in ice cream. We would like that to be, but there is no one. But the repeat orders are very high for some brands like ours. A couple of studies, one by KPMG and one by another consulting firm, we got the NPS. So we are one of the two brands which have positive NPS in the ice cream category.
That is going to create some kind of affinity. NIC is only about six, seven years old brand, so affinity is building. When we meet people at the airport or in the fight next to you, people just show that kind of appreciation for the quality of the product. I think it will amplify over the next few years, and hopefully we can build that loyalty. Based on whatever studies I have read and heard, with people much more experienced in the ice cream industry than me, they say normally people normally have two or three brands.
As consumers in the metros are willing to pay a premium for the products, what has been the status in the non-metros when it comes to premiumisation?
Outside of the seven metros, we were not hesitant, but we did not know what to expect when we went into markets beyond seven. That happened in the year two of us going on food delivery platforms. Surprisingly, it has surprised me actually that something like Tirupati or Patna or Kota, doing better than many well-known suburbs of Bombay or Delhi.
There are such pockets out there. We now sell in over 120 cities in India. The Raipurs of the world and the Dehraduns of the world, you are seeing the consumption there. They may not be as high as a top market in Delhi, Gurgaon, but much more than what we expected. There is one tier, maybe in the top 20 or close to next to top 20 cities. On Mother’s Day, we had 2,500 orders on a single day.
How are you differentiating in a market where people tend to prefer two or three brands on a primary basis?
There are a couple of people, decision makers. If there is some flavour that we are out of stock, people are going to go to someone else. Someone in the family will want another flavour. I am told by my partners, especially on the digital platform, that we are one of the highest repeat order brands across all cuisines, not only in ice creams. So there is some affinity.
It (repeat purchases) fluctuates from season to season, but on average, all the year is a very healthy 1.5, 1.6. And now in the last two or three months, Grameen is getting closer to that. People who eat Kulfi are also getting there. How do we compete? You just make yourself available, make yourself visible and try to deliver the ice cream in a timely manner and in the right condition so that the experience is better.
What is the distribution strategy that you have adopted and where does quick commerce fit in?
Quick commerce is really changing the game quite a bit. If you look at quick commerce, of course, you have small groceries, household items, and ice cream and others. If you look at food delivery and quick commerce platforms, there are not very many common categories of products they are selling except ice cream. Ice cream is sold on both platforms.
So, quick commerce is definitely pulling in a lot of consumers to the platform. Ice cream is actually growing much faster. The growth rate is much higher than the food delivery and ice cream. A 10-minute proposition versus 20, 22 or 25 minutes is always going to be more attractive to the consumers.
What would be the sales breakup when it comes to different channels from your company’s perspective?
We have just started getting into the GT channel. So, currently, we are about 75 per cent online and 25 per cent offline. But in the long term, as our GT grows and as we put our footprints across India, then we expect that online and offline will be in the range of 40 per cent to 60 per cent.
You recently acquired Meemee’s Ice Cream as well. What exactly are you trying to tap through that particular acquisition?
Meemee’s has created its own small niche and just like NIC, it is a handcrafted, high-quality product. It has connected with the urban youth and the urban affluent people who like to have more quality products. It is doing well there.
The strategy was to offer another artisan, high quality ice cream to the consumers who want to eat ice cream in a kind of a taco, or the rollies. At NIC, we do not have ice cream cakes there, but her ice cream cakes are doing pretty well. Their product line is also different from NIC’s. It is ice cream in a different format, presented in a different way.
What are the revenue expectations for not only this particular year, but also for the next two, three years?
If I were to look at the last five years, we have grown at a compounded annual growth rate (CAGR) of 40 per cent. From the year that I started going on digital platform, on food delivery, what has been my growth post that year, which is over the last seven years. Our CAGR is 62 per cent. We are in the middle of a fundraise right now, so we have the five-year plan for the investment. We expect to deliver what we have done in the last five years.
We will be growing each year in the range of 35 to 40 per cent. Had the means supported us this summer, we would have been higher than that, but we lost substantial revenue.
