Bihar-based startup takes the humble sattu to US, UK & Singapore


February 26, 2020


From being used by the armies of the Mauryan Empire (between 322 and 185 BCE) to being the super food of the valiant Indian soldiers during the Kargil war of 1999, use of sattu is as old as the cultivation of barley itself, which goes back to 5000 BCE. It has been the traditional staple for military men, travelers and monks, who always spent months away from homes and monasteries.

Made by grinding roasted barley (jau) or Bengal gram (chana) and even mixing both, sattu has been used in the kitchens of Bihar, Uttar Pradesh, West Bengal and Punjab for long. It can be had with sugar and ghee as a snack, mixed with water to make a cooling drink or stuffed into a wheat ball and roasted to make the famous Bihari litti. While sattu recipes vary from state to state, a company has now created sachets of sattu, which can be made into a drink in no time, to cash in on the health benefits of the traditional food.

Bihar-based start-up Sattuz has found a sweet spot in Indian consumers, who are waking up to the power of local and traditional foods. Sattuz hit the market in April 2018, selling sachets of sattu in three flavours – sweet, jal-jeera and chocolate. It is now selling directly to the US, UK, Germany and Singapore.

“I belong to Madhubani (in Bihar). While the place is famous for its Mithila or Madhubani painting and makhana (fox nut), its other well known product is sattu, which has not been marketed well. Little is known about it outside Bihar. I decided to popularise it,” says founder Sachin Kumar, who quit his job in Mumbai after attending a workshop on the marketability of traditional foods.

Once back home, he conducted market research on the potential of a ready-to-mix sattu drink. The idea found favour in both Bihar and outside the state. “Within Bihar, the hygiene of roadside sattu stalls was an issue and people wanted hygienic alternatives. In big cities, professionals, especially women, wanted healthy and easy to prepare items while rushing for work. We clearly saw a demand for pre-mixed sattu in a sachet and started working on it,” he says.

Sachin used his mother’s recipe to get the product right. He resolved freshness issues around sattu by sticking to single-use sachet format.

It is fresh for six months and has natural preservatives like sugar and salt. We don’t make bigger packs to ensure freshness,” Sachin says.

After getting the recipe right, Sattuz got lab tests conducted, sought approval from FSSAI (Food Safety and Standards Authority of India) and hit the market with a prototype travel pack with two paper glasses, two sachets and stirrers at Rs 30. And the product proved to be an instant hit in both Madhubani and Bihar’s capital Patna.

In India, and globally, there is an increasing awareness against consuming carbonated drinks, which are said to have harmful effects on health. Many Indians are now returning to traditional drinks like aam panna (raw mango drink), aam ras (made from ripe mangoes), tangy jal-jeera, lassi (a yogurt-based drink) and chaas (buttermilk), giving up sodas.

“There is a growing awareness about the health impact of carbonated drinks or packaged drinks. Plus there is a resurgence of not only healthy, but also traditional foods as people are linking back to traditional lifestyles,” says Devangshu Dutta, Chief Executive at retail consultancy Third Eyesight.

According to research firm Statista, among non-alcoholic beverages in India the market for juices is expected to grow at 17 percent between 2016 and 2021 while that of carbonated drinks at only 6.8 percent. Moreover, the per capita consumption of soft drinks in India was 44 bottles in 2016, while it was 34 times more in the US at 1496 bottles.

“This growing awareness and cool quotient about going traditional creates an opportunity for Indian companies and traditional products to make a mark,” Dutta of Third Eyesight says.

Realising this opportunity, Sattuz is not only selling overseas but also online through Amazon, Flipkart besides its own website. Currently, 40 percent of its sales are coming through the online channel. Now, Sattuz is deepening direct selling channels in the overseas market.

Within India, the company is tying up with corporate canteens, co-working spaces and hospital canteens. It has already entered the national capital region (NCR) and will now expand to Mumbai and Bengaluru. “We are in no hurry to be present on retail shelves as of now. It requires deep pockets and time. We will go for it later,” says Sachin.

Dutta says any company looking at large numbers, needs to be on the retail shelves. “Food and beverage is still predominantly a retail play. It is quicker to grow online and through direct selling, but volumes exist in offline sales. Depending on their strategy, they (Sattuz) can look at only online for a couple of years before going retail,” he says.

Sattuz has raised funds from New Delhi-based Indian Angel Network, IIM Calcutta Innovation Park and Bihar Industries Association. Sachin says the company could break-even in the next year or so. But that’s not the immediate goal. “We want to continue investments in expansion and increase our team size. So breaking even can wait,” he says.

So what’s on the cards for Sattuz? Kumar says he is currently focused on enhancing the product range itself. They plan to launch products like sattu cookies besides increasing the number of flavours of the drink on offer. “We are planning to sell ready-to-drink sattu through our own cafes as well,” he adds.

Just as ancient grains and superfoods like quinoa and chia seeds have gained worldwide popularity, perhaps it’s time for the humble sattu from Bihar to take on the global stage!

(Rashmi Pratap is a Mumbai-based journalist specialising in business, financial and socio-economic reporting)

FMCG majors like Nestle and MTR look to tap traditional breakfast fare


February 10, 2020

Consider Nestle, which in December expanded its offerings under Maggi and introduced ready-to-cook poha and upma variants, whereas Marico had earlier last year introduced two different ranges – Saffola Fittify

Written By Devika Singh

Nestle’s Maggi Masala Onion Poha Express (65g) is priced at Rs20, while Marico, Gits and MTR’s small poha pouches of 60g are also available at Rs20, each.

FMCG companies in India are increasingly eyeing the ready-to-cook (RTC) segment, but what is noteworthy is their newfound interest in traditional breakfast items such as poha and upma. Consider Nestle, which in December expanded its offerings under Maggi and introduced ready-to-cook poha and upma variants, whereas Marico had earlier last year introduced two different ranges – Saffola Fittify

Gourmet Power Breakfast and Saffola Perfect Nashta range, which includes poha, upma, dosa and idli. Gits Food, too, introduced ready-to-cook poha in cups and pouches in August 2019 and plans to further expand its range.

Then there’s MTR, among the first entrants in this category in 2017, which claims that within a year of its product launches, these products generated revenues of more than Rs 25 crore in FY18. While MTR already had traditional breakfast products in the market, its 3-minute range, which only needed hot water brought down the preparation time considerably. Now other players, too, want in to tap this growing segment and are launching similar products.

“We started with the launch of poha, upma and halwa and followed it up with seviyan upma in 2019, after research revealed that hectic lifestyles and time constraints have led to the trend of skipping breakfast,” says Sunay Bhasin, chief marketing office, MTR Foods.

According to Pakhi Saxena, head, retail and consumer packaged goods, RedSeer Consulting, the RTC market in India stood at Rs2,100 crore in 2019 and is expected to grow at a CAGR of 18% to reach Rs4,800 crore by 2024. Within the RTC universe, breakfast has 57% share, currently, with Marico, MTR Foods, Gits Food, Mother’s Recipe and Kellogg’s as some of the top players.

Thus far, the focus for most companies was either on non-traditional fares such as oats, or on instant breakfast mixes. “The urban and time-starved consumer is looking for convenient options for healthy and tasty foods, even in their main meals, especially breakfast. The current convenient options are seen as a compromise, either on taste, variety, nutrition or satiety,” says Koshy George, chief marketing officer, Marico. “Even the traditional breakfast mixes category is seen as a compromise and is used only occasionally. Marico had reported a value market share of 75% (June, 2019) in the flavoured oats category in the first quarter of the financial year 2020, but as per experts, most other players have seen limited success here.

“The companies operating in the breakfast space have misread the market for years now and have imported their perspective from the West. While convenience is important, it has to fit with the Indian cuisine and palate,” says Devangshu Dutta, chief executive officer, Third Eyesight.

According to Abheek Singhi, senior partner and managing director, Boston Consulting Group, while packaged food products including cereals have not been very successful in the breakfast category, the attempt to make traditional foods more convenient can yield better results.

However, with the entry of multiple players in this segment, competition is likely to be fierce, especially since most companies have products placed in a similar price bracket. Nestle’s Maggi Masala Onion Poha Express (65g) is priced at Rs20, while Marico, Gits and MTR’s small poha pouches of 60g are also available at Rs20, each.

Besides this, related sectors like food delivery apps and quick service restaurants (QSR) also pose a threat as they look to tap the same target consumer. “Competition is coming in from fresh foods, whether it is a Rs50 worth idli or poha delivered by food aggregators, or even a Rs50 burger offered by QSR players,” says Anurag Mathur, leader, retail and consumer goods, PwC India.

“Also in many of the target households, breakfast is cooked by the house help. This presents a structural problem for these players as there is fresh food available at reasonable prices both at home and out of home,” said Mathur.

Source: financialexpress

Tata Cliq turns direct seller, too


February 6, 2020

Written By Writankar Mukherjee, ET Bureau

KOLKATA: Tata’s has started direct selling to consumers through Tata Cliq in the namesake e-commerce marketplace, converting it into an entity which will become a seller holding inventory and not just run a marketplace. The group has also invested over Rs 300 crore into this entity – its highest ever — to support this expansion of role , two industry executives said.

The executives said this could be termed as an almost last ditch effort to spruce up the three year old e-commerce business since Tata Cliq has largely remained a fringe player in the Indian e-commerce landscape dominated by Walmart-owned Flipkart and Amazon.

Earlier, retailers, brands and other sellers would sell through TataCliq and the platform would earn revenue from it.

The new model may lead to higher sales and faster growth, since as a seller in the platform Tata Cliq is now holding inventory whereby it can directly control price, supplies, delivery and offer discount to consumers, two industry executives said.

As per regulatory filings made by the company to Registrar of Companies and sourced from Veratech Intelligence, Tata Cliq has raised around Rs 313 crore from its promoters – Tata Industries Ltd – this year till now. There has been fresh fund infusion in December and January.

The executives said bulk of this money will help Tata Cliq expand into the inventory model. Tata Cliq has already started trials of direct sales with television and home appliances of top brands like Xiaomi and Voltas, and will expand into other high value and fast moving categories like smartphones to gain volume.

In response to an email, Tata Industries executive director KRS Jamwal said the e-commerce business is experimenting with selectively acquiring head inventory, specifically for enhancing customer experiences, better delivery mechanisms and for enhanced margins. “This does not necessarily imply that we are implementing the inventory model,” he said.

Jamwal said the current infusion of capital is part of routine infusions of capital and will be ongoing. “Unlike a VC funded company, capital is not raised in bulky rounds,” he said.

He said the group is innovating an alternate ecommerce model that will speak to audiences who prioritise trust, brands and new launches as much as value.

An industry executive said Tata Cliq is approaching to sell exclusive models so that it can have a distinct space in the market as a seller and has a long-term target to generate a majority of the platform sales by itself.

Veratech founder Mohit Yadav said the shift to inventory model gives a unique advantage to Tata over Amazon and Flipkart as it is an Indian company and will not be tied down by the stringent foreign direct investment regulations in e-commerce. “It will help Tata leve .

Retail analyst Devangshu Dutta, chief executive officer at consultancy firm Third Eyesight, said just because Tata Cliq is now holding inventory it may not mean that it can easily achieve the scale of Flipkart and Amazon. Flipkart and Amazon have become what they are after years and spending billions of dollars, he said.

“That way, the Tata group is fairly conservative in spending capital and is not oriented towards throwing money at a business just to gain scale. However, holding inventory makes the business more predictable than depending on partners. After all, you don’t have to depend on the partner retailer for product availability, service level and pricing,” said Dutta.

Tatas have been investing money into the e-commerce business. In 2018-19, Tata Industries had invested Rs 292 crore, Rs 224 crore was in FY18 and Rs 172 crore in FY17. However, it’s a fraction of the thousands of crore which Flipkart and Amazon are investing on their India business every year. As per RoC filings, Tata Unistore net losses was Rs 246 crore in 2018-19 while its income was Rs 110 crore.

Source: economictimes

Flipkart shuts down Jabong for Myntra push


February 5, 2020

Written By Smita Balram, ETtech

Over four years after acquiring Jabong for $70 million, Walmart-owned Flipkart has formally closed its operations to shift focus completely on its premium fashion platform Myntra for its apparel business. As part of the move, Jabong’s flagship portal and app are being redirected to Myntra’s shopping window.

Experts said the move will help Flipkart consolidate operations and make its marketing budget efficient.

“The way ecommerce market in India has developed, customers need to be reacquired consciously. Since the level of stickiness is low, it is better to bring consumers to one site than spread money across multiple sites,” said Devangshu Dutta, founder of Third Eyesight, a strategy consulting firm, adding, “given how Walmart’s focus as a business is fairly cost and efficiency conscious, it makes sense to consolidate operations.”

Myntra did not respond to ET’s queries on official confirmation till press time. In July last year, Flipkart had said that it had begun to cut a bulk of its marketing expenditure on Jabong and redirecting users towards Myntra by offering incentives.

The Indian clothing market will be worth $59.3 billion in 2022, making it the sixth largest globally, comparable to the United Kingdom and Germany, according to data from McKinsey’s FashionScope.

However, online accounts for less than 10% of organised apparel retailing with Flipkart that acquired Myntra in 2014 and Jabong two years later, controlling about 70% of the market.

According to data sourced from SimilarWeb, which tracks web analytics for businesses, app downloads of Jabong in India had dropped by 12.71% in December from November in 2019. Usage on the app had been steadily declining as well.

Daily active users on Jabong were down by 10.61% in the same period. Myntra app, on the other hand, saw a 41.18% rise in downloads and daily active user count was up by 31.87%.

Source: economictimes