Siddhant Kamath, Director, Naturals Ice-cream, has built on his father’s legacy business of all-natural ice-creams, growing it to a Rs 300 crore brand. Here, he describes the initial struggle to meet demand that forced the company to scale up, the rebranding exercise to make stores more millennial-friendly, hitting it off with mini packs in the lockdown and the target to double the 140+ store count in three years.
Please take us through the journey of Naturals Ice-cream – how you built on the business set up by your father Raghunandan Kamath and made it the prominent Indian brand that it is today.
The first outlet of Naturals Ice-cream was started at Juhu Scheme in Mumbai on February 14, 1984. My father Raghunandan Kamath, who earlier worked at his brother’s restaurant, had a keen sense of what guests wanted. He formulated a strategy such that after meals at the restaurant, he would serve customers his ice-cream consisting of basic fruit flavours - such as sitaphal ice-cream - as a dessert option. Thus, the demand was created for a cool, soothing ice-cream post a spicy pav bhaji meal. This led him to believe that a standalone ice-cream parlour could be a success.
Starting out in 1984, he would make ice-cream behind the counter. In the first year, an average of 60 litres of milk per day was used. In 1991, a most loved flavour - tender coconut - was introduced, inspired by my grandmother’s experiments in the kitchen. In 1994, 10 years post inception, my father explored the idea of franchisees, for which a central manufacturing unit was set up. As the brand became popular, it was crucial to expand in other areas of Mumbai. International chains selling ice-cream entered India around the same time, and we took inspiration from SOP-driven franchise models.
In 1999, we shifted to a 5,000 sq. ft unit and took the brand to cities outside Mumbai for the first time - to Pune, Ahmedabad, Goa... Our network increased from 10 stores to 65 by 2005. In 2009, we shifted to our current set-up of a 25,000 sq. ft unit, managing 30,000 litres of milk per day.
In 2013, I joined the business, and my first task was to realign our franchise to our vision, to gear up for growth without diluting customer experience. In 2015, we rebranded and entered the capital, New Delhi. Today, we are present in 35 cities with 140+ stores.
What is the USP or key business strategy that works for Naturals Ice-cream in a fiercely competitive market that includes big multi-national players?
We have taken inspiration from the traditional kulfi and stuck to the original way of making ice-creams, in batches. Our ice-creams have low over-run (air incorporation) compared to our competitors, giving us more creamy, denser and rich ice-creams. We make ice-cream using only three ingredients – milk, sugar and fruits – and it has a shelf life of 15 days. We are an exclusive parlour/retail model brand, ensuring freshness of stock by delivering to 140+ outlets every day.
We have introduced and pioneered regional fruit flavours like kala jamun, musk melon and jackfruit ice-cream. Also, we process our own fruits; working on back integration has helped us to offer competitive rates and own the supply chain.
How do you ensure quality control and the Naturals Ice-cream claim of no artificial colours, flavours or preservatives?
It starts with milk; we work with the largest buffalo farm in India to ensure daily supply of fresh milk. We condense the milk to our requirement and add sugar and fruits/dry fruit/chocolate proportionately. We are known for fruit chunks in our ice-creams. We have incorporated robust ERP and BI tools, which help us track and monitor sales and inventory.
You launched the Tilgul flavour of ice-cream timed with Sankranti in January and other occasion-based flavours. Tell us more about product innovation at Naturals Ice-cream and what sort of investments go into it.
We keep innovating flavours in our lab and have an initiative called ‘Friday Funday flavour’, wherein we offer a new flavour every Friday, limited to the weekend. Successful flavours are re-introduced for a longer time. We have received high acclaim for our innovation cucumber flavour ice-cream. For every festive occasion, we launch a regional flavour inspired by the delicacy and sweets connected to the occasion. Malai khurma ice-cream - an Eid special exclusively available during the Ramzan month, shrikhand ice-cream during Gudi Padwa, thandai ice-cream during Holi and gajar halwa ice-cream are a few more examples.
Tell us about some of the notable on-ground experiences or marketing lessons that you can recall while expanding the company or getting into the product ranges. For example, what is the biggest business challenge or obstacle you have faced so far and how did you overcome it?
As the business was growing in the initial years, it was getting difficult to catch up with the demand. Our ice-cream needed special equipment and techniques for the unique flavours. Our machines had to be custom-built, and most of them were developed in-house to ensure consistency of taste that our customers were getting when we started first. For example, for our best-selling flavour sitaphal, it was tedious to de-seed sitaphal by hand and as a result we could only manage 24 kg a day. With innovation and by developing our own technique, we were able to scale our daily output to 4 tonne per day. The initial struggle to meet demand allowed us to scale up to where we are today.
They say Naturals does not do any marketing; however, our biggest marketing tool is our stores. We rebranded in 2015 and made our stores more millennial-friendly with design and branding. Also at our stores, customers are allowed to sample flavours, which is a unique thing compared to other food stores.
How did the COVID-19 pandemic affect the business and what strategies did you use to combat COVID-19 hitches? What other challenges does the business and the category face?
One of the biggest challenges we faced in recent times was the COVID-induced lockdown, when we were forced to shut down stores. So, we partnered with Rebel Foods and sold our products via cloud kitchens on Swiggy and Zomato. This became a successful partnership as we were able to expand our network. Today, we operate and sell from 70+ cloud kitchens. We also introduced mini packs, keeping in mind value and nuclear families. It was an instant hit, as people were looking for smaller packed products and this was delivery friendly as well. Mini packs make up about 8-10% of our sales today.
With the focus firmly on Indian brands now, how and to what extent is Naturals Ice-cream leveraging the ‘Aatmanirbhar’ sentiment?
As mentioned earlier, we process all the fruits for our own need. In a way, self-reliance is built into our ethos. We are working on integration at the back end with our buffalo farms for milk. We have selected Indian regional fruits as ingredients, which today have significant demand.
What is the overall turnover and geographical reach of the business today? Going forward, what are your business growth and expansion plans for the company? Are you looking to expand into any new vertical?
Our retail turnover is Rs 300 crore, and we are present in 35 cities and 140+ stores with 70+ cloud kitchens. Our target is to double up our store count in three years and further diversify and introduce new products in the market.
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