Keeping the faith-Jia Jain (31) CEO and director Insignia Hospitality Pvt Ltd

Keeping the faith

A
A
Keeping the faith
By:Khushali P Madhwani

From a failed business to two successful ones, this CEO has come a long way

Jia Jain (31) CEO and director Insignia Hospitality Pvt Ltd
Unlike most other MBA graduates, Jia Jain knew what he wanted after completing his course — his own business, not a job via a college placement. That was in 2005. Four years later, he earned his first million from the restaurant 1947.

But it didn’t come easy. Encouraged by hismentor, entrepreneur and visionary Dr R Chenraj, Jain ventured into a plywood business in 2006 that “failed miserably”. He also started a parallel business, running a hostel for his alma mater’s students. “The Dean knew I was in search of abusiness model.” Today, he runs four city hostels. In 2008, he launched 1947. Initially, it was tough to make ends meet, as he was netting only Rs 35,000. In the first six months, he suffered a loss of Rs 12 lakh. But by the middle of next year, Jain had earned his first million. “It took four years of struggle after graduation to achieve this.

I knew I had to invest it wisely to keep the cash flow going.”

So he decided to plow the money back into the business and create a chain. Today, he is the proud owner of five 1947 outlets in Bangalore.
“I ask young entrepreneurs to train with me to ensure that they don’t suffer the way I did.”

“You have to hang in there and believe in your dream. The money will flow,” he concludes.

Advertisements

Making a fresh Start …Vegwala.com

Making a fresh start

By Venkatesh Ganesh

Vegwala tries to maintain the shortest possible supply chain
between farmers and the consumer
E-retailing in India is witnessing a spate of new ventures that are
capitalising on two important aspects of traditional shopping- the
costs and hassles associated with shopping at a supermarket
(such as petrol costs, vehicle parking, long queues etc.) and time
constraints.
Sunita Chellam, an IT employee in her early 30s has, in the past
year or so, seen increased pressures of long working hours, which
in turn eats into her grocery shopping time. For consumers like
Chellam, an online shopping portal like Vegwala.com comes as a
blessing.
Origins
It all started on a busy evening, when Santosh Patil and Shantala
Bhatwhere, the co-founders of this venture came back home after
a hectic day. “When we opened the fridge, we found empty
vegetable boxes. We ended up ordering pizzas and having them
for dinner as we neither had energy to drive to nearby shops,
malls to buy the vegetables nor the patience to stand in the
queue to make payments. That’s when we thought, we wish we
had someone delivering fresh vegetables and fruits to our
doorstep free of cost,” says Patil.
We tried searching for vendors who are into this business and we
found none except few who were only into B2B (business to
business) segment, added Bhat.
Currently functional only in Bangalore, Vegwala solely focuses on
selling vegetables and fruits to customers. What is interesting is to
see here is the use of technology to bring benefits to the
agricultural sector, which contributes around 15 per cent to
India’s Gross Domestic Product (GDP). Patil comes from
agricultural background, has completed Bachelor of Engineering
in Computer Science from Gogte Engineering College Belgaum
and has worked for about a dozen years in the Indian corporate
sector. His dream is to streamline the Indian agricultural industry,
which is backbone of the country, by helping farmers cultivate
and harvest according to the demand.
Co-founder Bhat, has done Bachelor of Engineering in Industrial
Production from SJCE, Mysore and Executive General
Management Program from IIM-B. Together, they believe that the
combination of domain knowledge, tech and business processes
can do the online grocery segment what Dell did to computers.
This sector is unlike other e-retailing ventures, where you can
procure from the producer and sell to the consumer. As a highly
fragmented market, this involves knowledge and more
importantly, an ability to dig deep when it comes to dealing with
procuring side of the business.
“In this business, one should be able to see value proposition of
each link in an existing agricultural chain and have sound steps
and measures in optimising them. We have to really care of the
farmer and the consumer by aligning our partners (including
employees) and vendors towards achieving this vision, says Patil.
Gaining domain knowledge and ways to deal with farmers and
middlemen was not sufficient. “Initially, our challenge was buying
and storing perishable items like vegetables and fruits ourselves.
Also, the idea of going after customers to sell them traditionally
made sense. ,” says Patil. So to test the waters, Vegwala decided
to target large buyers of fresh produce, such as hotels. “Both of
us used to go to KR market at 3 am in the morning, buy
vegetables and fruits and supply them to hotels nearby.” This
helped us in understanding the supply chain and ecosystem,
adds Bhat. Like in every venture, the initial challenge was to
understand the existing agricultural supply chain and most difficult
part was convincing consumers about our concept.
Vegwala adopts the shortest possible supply chain thus reducing
lot of intermediate costs such as middlemen costs, transport
costs and storage costs. Whenever possible, they choose to work
with farmers directly and procure fresh products harvested
especially for Vegwala as per the customer demand.
Certain products which are not easily available near Bangalore,
Vegwala either directly talks to farmers who grow them or mandis
to which supply them directly. This being volume-based business,
Vegwala has different plans to contain cost at different volume
levels. This has resulted in revenues going up and a customer
base growing four times in the last couple of years, according to
the co-founders.
Money matters
To succeed in this business, which has a relatively higher barrier
to entry requires deep pockets. The company is self-funded but is
looking for funding from institutions who understand the
company’s belief of organising the agriculture industry across
India. Funding is also crucial, if one looks at the future plans of
this startup. It plans to use tech for demand forecasting, build
and strengthen the infrastructure for sharing agriculture related
information to farmers easily, provide seeds, test soil, harvesting,
offer door to door collection of harvested products and support
adopting latest agricultural methods and practices. “We want to
connect farmers and consumers directly via farm visits, community
meetings, get-togethers,” says Patil.
The idea of online retailing of groceries has already seen
companies like Bigbasket.com, which offers choosing of timeslots
for delivering products, payment options using food coupons,
credit cards or cash on delivery and Bigbasket guarantees, which
is modelled after eBay. While there is a delivery charge below a
certain order, the Web site says that they offer grocery free of
cost without any minimum amount but which puts pressure on
the economics of online retailing.
With a middle class pressured for time and which seeks
convenience and willing to pay for a quality product, the
company has set its sight on the right audience. However, the
agricultural sector has its own sets of challenges and Vegwala’s
success depends on whether farmers understand this.

Natural icecream -melting heart s ,the natural wst

Melting hearts, the Natural way

By Priyanka Pani

R.S. Kamath

“If you are in Mumbai, visiting a Natural Ice Cream parlour is a
must, apart from the Gateway of India, Marine Drive and
Siddhivinayak Temple.” That’s the announcement IndiGo Airlines
makes whenever one of its aircraft lands in Mumbai. It’s not a
paid endorsement for the ice-cream brand, which is owned by
Kamath Ourtimes Ice Creams. Rather, it speaks about the
popularity of Natural Ice Cream.
To this day, R.S. Kamath’s 25,000 sq. ft. factory in Charkop,
north Mumbai, uses hand churners to make ice-creams. Kamath
himself spends hours creating new variants. And that’s how the
company sells ice-creams in flavours ranging from cucumber and
pumpkin to turmeric and lemon grass. Mint and tulsi flavours are
in the offing.

HUMBLE BEGINNINGS
Kamath grew up assisting his father in selling fruits. With little
interest in studies, he dropped out after Class Ten. However, his
family’s ice-cream factory in Santa Cruz certainly held his
attention. Regular visits to the factory helped him gain an
understanding of the industry.
“But it was only after the division of our family business (in 1983)
that I set out on my own with brand Natural,” says Kamath. The
word ‘Natural’ was an obvious choice as his ice-creams do not
have any preservatives and use only a handful of ingredients:
milk, sugar, dry fruits and fresh fruits. The recipes remain a secret
till date. But most of the flavours are decided after feedback from
consumers. So the shelf life for Kamath’s ice-creams is just 15
days.
Kamath set up his first outlet, all of 300 sq. ft, in the upmarket
Juhu area of Mumbai in 1984. He and his wife would crush fruits
and churn out ice-creams at home. The turnover was Rs 1 lakh in
the first year – just enough to keep them going. The annual sales
at this outlet are now over Rs 5 crore.
“I didn’t have to spend a single penny on advertising. It was
mostly through word of mouth,” he says. Several celebrities,
including Amitabh Bachchan, Dilip Kumar and Vivian Richards,
have endorsed his ice-creams on various platforms.
Today, Natural has a chain of 115 outlets in Maharashtra and
Karnataka.
Mamta Nahar, 32, is a regular at Natural’s flagship outlet in Juhu.
She visits the outlet every Friday, when Kamath comes out with a
new flavour that is repeated only after a year. “They come up with
some unthinkable and exciting flavours,” she says.
Natural also continues to introduce occasion-led flavours such as
malai korma for Eid, prasadam for Ganapati, and gajar ka halwa
for Navaratri.
For the first 16 years, Kamath was busy feeding the Mumbai
market. After continuous demand, he ventured out of Mumbai
with a store in Pune, in 2000.
“We plan to go national in a year, with 35 more outlets,” says
Kamath. He is also readying to export to West Asia and Europe in
about two months.

COMPETITIVE PRICING

Natural remains competitively priced at Rs 40 a scoop compared
with Rs 100-120 a scoop for most of the big brands.
“All our flavours are sold at the same price. While margins in
flavours such as sitaphal, raspberry and gooseberry are very low
(due to fruit costs being high), it is adjusted in flavours such as
musk melon and tender coconut.”
To maintain consistency, Kamath continues to source milk from
the Nashik-based Noble Dairy, which has been Natural’s supplier
since the day one.
“We sourced 20 litres to begin with. Now, we require 15,000
litres a day. Even our fruit farmers or vendors have not changed
all these years.”
Yunus Patel, 54, one of the promoters of Noble Dairy, says:
“From just a few buffaloes in the 1980s, the farm now has 1,500
buffaloes. “He (Kamath) has motivated us to grow. Now, we have
modern technology to milk the cattle.”
Now, as it prepares to expand, it will be interesting to see if
Natural Ice Cream can melt hearts across the country.