In an interview with BW Retail World, founder and MD Aakash Vaghela reveals how the brand is looking to tap Middle East and North Africa (Mena) region next
Emphasising that Indian consumers always look for value in the product, Aakash Vaghela, the founder and managing director of Evocus said that the goal is to become the go-to-brand for functional beverages. As the company bets on ecommerce and quick commerce to propel the next growth phase, it is also looking to tap the Middle East and North Africa (Mena) region in the next couple of quarters.
Vaghela noted that the brand is targeting about Rs 15 to 20 crore monthly run rate going ahead. He highlighted that the modern trade acts as an activation channel and the ecommerce and the quick commerce becomes a retaining channel. Edited Excerpts:
Transitioning from black alkaline water to now expanding into RTD functional hydration with Hydration IV. How do you define the brand’s core purpose today, beyond category leadership to consumer mindset and lifestyle?
We focus on bringing products which are functional in nature, multifunctional nutrient products is what we want to bring in the market. Our transition from black alkaline water to a hydration IV was only because we wanted to bring out the best possible and the most efficient product in the market. When we started with hydration IV RTM that was the first product where we replaced sugar or any synthetic sugar additive and we replaced that with organic cane juice powder.
That became the base and then we added all the little bit B complex, B1, B2, B3, B5, B6 etc. We wanted to create a product which is the most efficient in its segment. Once RTM was launched in the market, it was a no-brainer for us to extend that into RTM for consumers who want to have like an instant gratification. If you compare that with the other the Gatorades or the Ocean Drinks, the sugar is very high. But we have been able to maintain the same efficiency by reducing the sugar content and focusing more on better taste and better efficiency.
You are selling via your website and quick-commerce platforms as well. How do you balance D2C and modern trade channels in your distribution mix?
Quick commerce is currently the most convenient channel of purchase for a consumer, and that is something which has completely changed the entire offline market. When we started the quick commerce a few years ago, we saw a gradual growth and then suddenly it skyrocketed. Not for me, for every brand. That became a primary channel compared to a retail channel. Quick commerce and an ecommerce contributes more than a retail channel.
The modern trade and the retail channels, I am not talking about GT because that is not my target channel. Modern trade channel gives you the eyeballs, it gives you the standing in the market. There is sensory tasting of the product. So the trials may happen from the MT because of the inclination towards trying something about the product. But once you acquired the consumer, maybe the second or the third time, the consumer is going to go to a quick commerce. The tables have turned for every brand today. I think MT becomes an activation channel and the ecommerce and the quick commerce becomes a retaining channel. We are somewhere between 14 to 15 per cent of repeat customers.
You have mentioned plans to expand into markets like the Middle East and North Africa. What is your international strategy and timeline?
Yes, in the next couple of quarters is when we will activate the global market, especially Mena region. We will focus on Middle East and North Africa. We will activate with global ecommerce and quick commerce in phase one. And a couple of quarters later, we will activate the retail channel.
Our first purpose is we want to make a global presence and activation. So, you know, quick commerce and ecommerce will be our first drivers followed by retail.
While you have shared your revenue goals for the current financial year, what is the financial milestone that you are chasing in the longer run?
See, three to five years, we want to be known as the go-to brand for functional beverages. Either powdered beverages or regular beverages. We want to be known as the number one brand for functional beverages in at least India. Then we want to expand in the global territory and create a footprint over there as well. And again collaboration, strategic partnerships, all of that is a part of this strategic expansion.
Since we are bootstrap, we do not have an external investor on board. Things are moving in the right direction. But once we activate the global ecommerce, then the entire scenario changes. Because what happens is once a brand creates success or once a brand creates an acceptability in a mature and a global market, the rub-off effect is also seen in the Indian market. The credibility factor kicks in. So in the next five years, to answer your question specifically, we are looking at about Rs 15 to 20 crore monthly run rate.
Have you secured external investment to fuel scaling? What kind of financial backing or partnerships are you exploring?
We we are bottom line positive as of now. So the business is self-sustainable. Once we start growing at one stage, we will reassess ourselves whether we require to go out in the market or not. And if need be, yes, we will be open for that. If not, then we will continue being bootstrap. Our goal is in the next five years, to clock between Rs 15 to 20 crore monthly run rate, which includes the revenue from the global ecommerce and global quick commerce.
Premiumisation is shaping the beverage space in India. How are you balancing premium positioning with accessibility, especially in a price-conscious market?
I believe Indian consumers are discerning but they always look for value in the product. If there is something where you are getting functionality with health benefits, that comes with a value and that is the value that the Indian consumers are willing to spend. Yes, we are a premium brand and my target audience is different than the masses. But that target audience has been accepting products at a certain value, which is higher than the regular Massey products, provided it gives the right kind of functionality and it is efficient enough.
Today is not the day where you can fool the consumers. The product has to have that kind of efficiency or the claims have to be substantiated and the product has to work in the manner that you are claiming it to work.
With Hydration IV positioned as a fast-acting electrolyte drink, how did you translate scientific credibility into ingredient choices and a formulation that delivers clear consumer value?
My target audience is a self-educating customer space. These are the consumers who probably look at the back label before the front label. The particular sense of ingredients, what functionality they bring in at the time of consumption, what is the actual benefit that that particular ingredient gives is something that the surface level knowledge already exists. Then every brand is doing their own bit to communicate the core benefit of their product to the consumers by way of marketing or communications in their own manner. We are also doing the same.
While transitioning from a premium product to an ingredient-based label-centric product, the choice of ingredients that we put are based on certain core functionality that we want to give to the consumers. Assuming that these consumers already know about the functionality of those ingredients or will self-educate them. Then we have our comprehensive communication to communicate the overall functionality of the product which adds to their well-being.
