The big surge by small brands

Chitra Narayanan | | Updated on: Dec 13, 2020

How young businesses grabbed shelf and mind space during the pandemic

This April and May, when the country was still in the midst of a lockdown, as big brands and retailers struggled to get their logistics act together, seven-year-old Tea Trunk was sending out tea to its loyal customers and acquiring several new ones.

“We saw 8X growth on our website,” says Snigdha Manchanda, the tea sommelier who brewed up the idea of a gourmet artisanal tea portal. The company recorded 3X growth on Amazon and Nykaa, she says. The fact that Tea Trunk operates out of Goa, which even at the height of the lockdown was a green zone, and is completely ecommerce-driven helped it sell more. Also the category it operated in — tea and botanicals, a product that was widely sought after, was an advantage. Turmeric tea, with the USP of immunity, was something that Tea Trunk was retailing long before the pandemic.

Shauravi Malik and Meghana Narayan, founders of Slurrp Farm, a Gurgaon-based healthy breakfast and snacks company that launched in 2017, have a similar story to share.

“We have grown three times during Covid,” says Malik. On marketplaces like Big Basket and Amazon, the brand, which sells ragi- and other millet-based products, saw 2X growth till August and 3X growth in November. Like Tea Trunk, Slurrp Farm has been a story of product innovation, and connecting deeply with consumers, who became its brand ambassadors.

In Bengaluru, couverture chocolate and desserts maker Smoor saw 5X growth on its organic platforms (own website plus its stores). Marketplaces gave it additional growth.

Splurge from home

What makes Smoor’s growth more remarkable than Slurrp Farm’s or Tea Trunk’s is that pre Covid-19 it was more a store-anchored business. But since it had begun work on its digital platforms late last year, it was able to quickly pivot. But what really helped the brand, explains Jermina Menon, who is a strategy consultant for Smoor, is that the consumer palate began changing during the pandemic. Everybody started baking at home and there was a huge jump in the sale of value-added bread as well as cakes. Smoor innovated quickly and created sourdough breads, which flew off the shelves. It increased its cake offerings from 10 to 30 kinds in no time, bringing in a former chef from a five star hotel. It came up with a gourmet range of dips.

Another factor, points out Vimal Sharma, founder of Smoor, was that when it came to finely crafted couverture chocolates and desserts there weren’t many homegrown brands that had been successful in matching global product quality. It filled a gap.

It’s not just food brands that grew. Ecommerce-driven pet products company Goofy Tails saw exponential growth during the last eight months. “Both our topline and bottomline grew by 40 per cent,” says Kartik Gupta, one of the founders of Goofy Tails. What spurred sales was that all physical pet shops were closed. Also people gave up their inertia to shop online, he says. And with people home all the time, they became more connected with their pets and started pampering them more.

These are just a few examples of small home-grown brands that surged in a big way during the pandemic. Talk to Anaggh Desai, who runs a popular one-hour mentor programme for small brands and he has numerous anecdotes about young businesses that scaled unexpectedly in the last eight months, riding on changed consumer behaviour. He describes how a stationery brand with ₹20 lakh annual turnover pre Covid-19 has already clocked ₹40-plus lakh in the last eight months.

There are multiple reasons for the growth, according to Desai.

Cooped up at home, customers have the time to research more products and this leads to the discovery of these young brands. Instead of picking up what’s available on shop shelves, they get to see more options online. Also, says Desai, many consumers chose to go for quality over quantity and these young brands promise that.

Indeed, talk to Slurrp’s founders, two moms passionate about providing healthy options to kids, and hear how much time and research they invested on their products.

Nimble does it

A common thread tying these small brands is their agility in product innovation. Yes, large FMCG brands, too, showed unexpected speed — but their pace was different. Manchanda points out how the big companies launched immunity offerings as late as August whereas Tea Trunk’s was available in April.

Goofy Tails’s Gupta describes how they indigenised rapidly. Typically most pet toys and apparel are imported but they started getting these made locally.

Both Malik and Manchanda also say that their brand building is very different from larger brands. “For us, brand building is knowledge sharing,” says Manchanda, describing how they took up issues like mental health, PCOD and had Insta live discussions on it. For Goofy Tails, brand building came through its Give Back campaign (every purchase would help in contributing to a pet shelter the company runs).

For Diwali and the festive season, another common factor to these brands was that they had interesting gift hampers ready. Tea Trunk came up with a botanicals cocktail hamper, Smoor had its cakes and chocolates and so on.

The growth story is indeed encouraging, but as the situation settles down, and bigger brands start flexing their muscle, will these small brands be able to sustain this momentum or face a slide?

Goofy Tails’s Gupta talks of how extreme personalisation and indigenising will help them. “When I sell to a customer I know the names of their pets,” he says.

Desai feels that smaller brands will keep their customer base as they display better service behaviour. Even a small problem and they resolve it. One positive outcome of the small brands’ growth, he says, is that the bigger brands will learn to behave better. So the customer may be the eventual winner.

Published on December 13, 2020
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