The sauce and spice in Veeba’s growth

Sauces and condiments brand Veeba has turned ten this year but founder and MD, Viraj Bahl, believes the party has just started. When setting targets for his team, he says, the focus is on how to make sure the company is the “most-loved food company”. “My biggest nightmare is that I go to a social gathering and tell them I work for Veeba and they end up saying that they didn’t like a particular sauce. We want to be the most-loved and also the fastest-growing food company,” he adds.

No doubt, VRB Consumer Products Pvt Ltd, the parent company of Veeba, has been growing at a fast clip. In FY19, revenues stood at ₹239 crore. Cut to FY22, revenues surged to ₹542 crore. The company ended FY23 with revenues of ₹811 crore. It is now set to cross the ₹1,000 crore-mark in FY24. Today, the B2B segment is only about 8 per cent, while the remaining 92 per cent comes from retail sales.

“Quality products and product innovation has been our top strategy to build Veeba as we are an innovation-first company. The other key strength has been distribution. We are sold in over 700 cities and at nearly 2 lakh points-of-sale. Every brand looks good in Delhi and Mumbai. Our strength is that we are also easily available in Vellore, Madurai or Bhatinda,” says Bahl.

Viraj Bahl, Founder and Managing Director, Veeba | Photo Credit: Special Arrangement

Unlike the new age D2C brands, the company has focused sharply on general trade distribution. Bahl says nearly 70 per cent of the retail revenues come from general trade stores. About 21-22 per cent of retail sales come from modern trade stores and about 8 per cent from the online channel. “While we are among the leading brands on all the marketplaces, we have always been focused on building a strong distribution in general trade stores just like a traditional FMCG company” he adds.

Future plans

Veeba has been a late entrant in the well-established tomato ketchup segment. Its preservative-free and sugar-free proposition seems to have struck a chord with consumers. Bahl says that it’s still early days for the company in the tomato ketchup segment. “The revenue growth has been phenomenal. I am well-aware that there are large established players in this category. But I believe Veeba has the right to win in this segment and we aim to be among the top three players,” he adds.

More recently, the brand has forayed in the fast-growing Chinese sauces category. “This will help brand Veeba gain depth in distribution. So, For instance, if in a city we were only present in 200 stores, with this new range, we have now increased it to 500 stores,” he explains.

Expansion of manufacturing footprint is also on the cards. The company currently has manufacturing facilities in Neemrana and Keshwana in Rajasthan. “As we strengthen our presence as a pan-India brand, we are looking to set up a large plant in South India next — ideally in the Hyderabad region. . We are scouting for land and it could entail investments in the range of ₹100-150 crore,” he said.

Bahl envisions that the VRB Consumer Products in 2028 will be very different from what it is today. It will be a company that has four brands with a presence in seven categories.

Though Veeba will continue to be the flagship brand with a strong play in sauces and mayonnaise, the company has also launched brand Tasty Pixel that works as a flanking brand priced lower. Also, brand EarthMade will have a play in nutrition and wellness space.

“I do not believe in the “house of brands” concept. Just because I have distribution does not mean that each brand that I launch will be successful. Each brand has to have its own proposition, value system and needs to solve something for the consumer. So we will slowly build these other brands. We would not put revenue pressure on our new brands,” explains Bahl.

With Tasty Pixel, the company looks to widen its retail footprint in smaller towns and cities. “Veeba is an aspirational brand and hence it will not look good in, for instance, the sachet format. So we have Tasty Pixel as our mass brand. It has already become a ₹50-60 crore brand and we expect it to scale up to ₹100 crore. We are trying to go wide in every State and Tasty Pixel is helping us do that,” he states.

Bahl believes the new brands will play a key role in maintaining the growth rate in the range of 30-40 per cent for the next few years.

VRB is backed by investors including Verlinvest, Saama Capital and DSG Consumer Partners. “We have not done a fundraise in five years now. What is better than being a unicorn is not needing money to be declared as a unicorn. We are a self-sustaining company growing at a steady pace. I am blessed to have really good partners who understand my vision and our focus on building a company for the long-term,” he adds.

At the same time, the company is getting its house in order to go for an IPO. “I am not a thick-skinned founder, I take criticism very personally,” he smiles, adding, “We will go for an IPO when we are on a stronger footing, in terms of profitability and revenues.” It isn’t a far-fetched dream and may happen in the next 3-4 years. The packaged food company is also scouting for inorganic growth opportunities, especially in the D2C space.

Ankur Bisen, Senior Partner and Head, Consumer, Food and Retail, Technopak Advisors, says, “Veeba has been among the handful of brands that helped build the sauces, mayonnaise and dressings space in the country. It was able to use its experience as a supply partner to the food services industry to successfully bring innovative products to the retail shelves. Now, competition has intensified in this space with both large and new age players vying for a piece of the pie.”

“It is going to be challenging to run an FMCG company over the next decade. Things are changing rapidly. Look at how quick-commerce is evolving wonderfully. So we have to be really on the top of our game,” agrees Bahl.

What’s got Bahl most excited in recent times is the brand signing up as the co-presenting sponsor for MasterChef India. “This is one show we all watch as a family and I am super excited about this association. We have come back to TV advertising after sometime and are also investing on the World Cup,” he states. Veeba is poised to hit some sixers!

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