Start-ups by former FMCG pros challenge established players

Start-ups are blooming in every sector and relatively new ventures in the FMCG space are giving the established players a run for their money. Most of these ventures, started by former employees of big FMCG companies, are entering new categories with the backing of big-ticket investors.

These include the likes of Global Consumer Products started by A Mahendran, Ex-Managing Director of Godrej Consumer Products; Hector Beverages, started by former Coca-Cola employee Neeraj Kakkar, and Indulge Beverage, co-founded by Tuhin Jain, a former Pepsico Executive.

“These are experienced professionals who understand the complexities and pitfalls of the FMCG business and are able to navigate the challenges of this industry. Even big companies like Coca-Cola would have realised the dent a small start-up like Paper Boat would have made,” said Tuhin Jain, Co-Founder, Indulge Beverages, a former general manager at Pepsico and currently the creator of the tea and coffee capsules segment under the Bonhomia brand.

Making a mark In the case of A Mahendran, his ‘synthetic’ start-up under Global Consumer Products is not only entering household insecticides segment under a new brand but a host of other categories — from chocolates under the Luv It brand to a new ayurveda skin and hair care brand under Ved Rassa. “We are now in our third year, having raised $50 million from big investors like Mitsui and Goldman Sachs. There is a pilot being done in the ayurvedic category under Ved Rassa and we will consider more fund-raising when the time comes,’’ said A Mahendran, CMD, Global Consumer Products.

Others like Paperboat, floated by former Coca-Cola employee Neeraj Kakkar, are also a creating an ethnic drink category whose packaging has already been emulated by the likes of big FMCG companies like Dabur.

“It is our job to innovate and once the niche becomes mass, there have been instances of large companies acquiring the smaller one,’’ says Kakkar. In fact Coca-Cola has already taken a cue from Paperboat and added ‘ aam panna ’ as a new variant of Fanta. Paper Boat is also going global and will soon be taking its beverages to places like Dubai and Singapore.

Another coffee start-up, Indian Bean, has been getting feelers from big FMCG companies like Tata Global Beverages when it started operations nearly three years ago. “When we started in 2012, we had Tata Global Beverages coming to us to understand how we sell our speciality coffees. Today, we do not mind if they are interested in buying us out since we have sourcing capabilities and supply chain efficiencies in the speciality coffee space which they could use to their advantage,’’ said Kunal Ross, Founder, Indian Bean.