Emerging Entrepreneurs

Seeking value at the bottom of the pyramid — the TABP way

Thomas P Abraham | Updated on March 30, 2020 Published on March 31, 2020

Prabhu Gandhikumar, promoter, MD & CEO, of TABP Snacks and Beverages Pvt Ltd

This start-up manufactures beverages and snacks

It’s been often said that ‘Small is Big’. In fact, in some cases, small can be very big. Prabhu Gandhikumar, promoter, MD & CEO, of TABP Snacks and Beverages Pvt Ltd, will vouch for that. Prabhu’s brainchild, TABP, which he founded along with Brindha Vijayakumar, and supported by an advisory council consisting of Aniket Gore, Arun Mukherjee and Soumya Malani, targets the bottom of the pyramid consumers whose incomes are small and their capacity to spend, even smaller. That’s why he priced TABP’s fruit juices at ₹10, a low price point where multinational corporations are not present.

“The price point of ₹10 was lying vacant. And we occupied that slot.” The rest, as they say, is history.

Prabhu hails from a family that runs foundries. He, however, wanted to spread his wings. And when he looked around, he found the fruit juices industry interesting. The market was huge and per capita consumption of fruit juices in India is extremely low compared with most other countries.

The first plant was put in place by Prabhu, a mechanical engineer by qualification, in 2015. “I could do this at a much cheaper cost (thanks to his engineering background) than most people would.”

 

 

More flavours

And in March next year, Prabhu had got the first batch of products out. These were mango and apple juices under the brand name Plunge.

In 2017, TABP then added a line of carbonated drinks – orange, cola, jeera, lemon and white lemon. “We launched a new brand Gullp in 2020, under which we sell all our range of beverages. We did this at the request of the new distributors,” he says.

TABP targetted labourers with per day earnings of about ₹300.

Marketing

TABP markets its products through distributors, which helps keep its sales and marketing costs low. And the feedback received from these distributors, who have their ears to the ground, have stood the company in good stead. On their advice, TABP rolled out its range of carbonated drinks.

In south India, the peak season for juices and carbonated drinks is March-May. October to December witness the lowest sales of these drinks. That meant a spike and fall in TABP’s sales. To even out this phenomenon, the distributors suggested TABP to launch snacks. As a result, TABP launched snacks such as choco-fills, choco-flakes, vanilla flakes, rings and balls under the Snack 91 brand. (The number 91 is the dialling code for India.)

It has a sales force of 27 now. In operations and R&D, it has 10 people who sit in the corporate office at Coimbatore.

Growing, growing, .....

TABP’s products are currently available in Karnataka, Andhra Pradesh, Tamil Nadu, Kerala and Telengana catering to the rural and urban poor.

It is also present in Odisha. It will appoint distributors in Bihar and Chhattisgarh.

This year, TAPB introduced non-alcoholic beer in the name of Thirsty Owl at an MRP of ₹50. Also, it introduced rusks in the name of Tanvi in the price points of ₹5, ₹10, and ₹20.

Its latest roll-outs are the 3-litre party packs of cola, jeera, orange and clear lemon at MRP of ₹95. Here too, there are no MNCs in the 3-litre slot. They sell large bottles of 2.25 litres.

“So, per glass of our 3-litre beverage works out much cheaper than of MNC products,” explains Prabhu.

Going forward, TABP plans to expand to Maharashtra and Madhya Pradesh.

For the financial year 2019-20, topline is expected to be ₹13-15 crore, which is about 4 times that of the previous financial year.

“For the next financial year, we hope to do ₹30 crore,” says Prabhu.

The food start-up based in Coimbatore, recently closed a round of fund-raising for ₹3.5 crore at a valuation of ₹50 crore pre-money from a team of angel investors.

Going forward, the company plans to raise $1 million by the end of the current financial year to give a push to its growth plans.

Competition

Apart from MNC players, competition for TABP comes from regional players like Bovanto in Tamil Nadu and Bindhu Jeera in Karnataka. There are other small town players too, such as ‘777’ in Thanjavur and ‘Winter’ in south Tamil Nadu.

“These brands have been there for long – even third and fourth generations. But they have little hunger for expansion. So, with our range of products (beverages and snacks), we are better placed for growth than the other players,” points out Prabhu.

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Published on March 31, 2020
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