Food start-up Pling Foods and Beverages has closed an initial round of funding with multiple investors, including Raveendranath Kamath, an angel investor, and the Kerala State Industrial Development Corporation. Started in 2016 by a serial entrepreneur Andrine Mendez, the Kochi-based start-up ran into roadblocks with its initial plan to focus on modern retail outlets.

It launched store keeping units (SKUs) priced at ₹50 and worked with Spar, More Megastores, and Niligiri’s in Kerala, Bengaluru and Guwahati, but did not play up as expected. It then turned to kirana stores with ₹10 packs in December 2017. This seems to be paying off now with monthly sales of up to 50,000 units currently, with some 3,000 retailers in Kerala, Mendez told in an interview to BusinessLine . Excerpts:

Is the fragmented nature of traditional Indian retailing a challenge for FMCG start-ups?

Yes, it is. It took me two years to even figure out how it works. It doesn’t really matter how good your product is because unless you have the blessing of the B2B network of the retail industry, your product won’t see the light of the day. Coming from advertising industry, I thought FMCG would be a B2C/consumer communication-oriented work. But there is so much of B2B work that has to be done to crack the retail network.

Big FMCG sales come in small packages. Please explain your learning curve.

We launched with ₹50 packs, bought it down to ₹10 and are now about to ₹5-units. I personally never wanted to get into the ₹5 segment but that is where the bulk of sales happens. This is relevant in the Indian retail structure with kirana stores leading the show. They prefer ₹5 products any day.

What has been your experience in ‘innovating to differentiate’ in the market?

We are working on launching all natural products with less or no use of oil. While the market is filled with either potato crisps or extruded snacks, we have delivered a clear alternative with banana and cassava. While majority of snacks currently are extruded snacking options, ours has natural ingredients.

But consumers care more about pricing and quantity, than innovation. As much as we like to talk about it, finding a market-fit and ability to scale don’t often meet eye to eye.

Are you comfortable with disruptive models such as the online market place, PoS outlets and hyperlocal stores?

I am up for anything that works. Much has been spoken about online/e-commerce. We are far from being a volume channel in terms of grocery or FMCG as a category. I say this from a new brand or food start-up perspective. My experience working with online stores is that one needs to constantly push the product via promotions to see any traction.

People might try the product or want to taste it but finally in terms of sales volume, new channels either need a lot of push or time to show results. We have also explored new formats of distribution. In Hyderabad, we have signed up NumberMall, a e-distributor that helps kirana store owners book via mobile app.

Overall, how tough has it been for you to find space in modern retailing shelves?

If you have money to spend, finding space in modern retailing is easy. We wasted more than a year in the race to place products in modern retail shelves. But for returns to come, we have to keep spending in terms of premium shelves.

I would recommend any food start-up to target the general trade in the initial days. But then, when one has a lot of money power, modern retail shelves welcome with two hands.

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