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August 30, 2024
In a startup world, founders are typically creators first while investors see themselves as the monitors. Therefore, conflicts between the two are almost a default feature of a relationship that in effect funds a dream. From ‘off’ chemistry to differences of opinion to what some founders see as shackles on entrepreneurial freedom, the reasons could be any or a mix of all. Watch this discussion, with a mega-panel of intense start-up founders on the one hand and investors with VC funds on the other, addressing the pain points on Cash, Control, Creativity, Chemistry and Culture in a supercharged encounter. Session Anchor, Devangshu Dutta (Founder, Third Eyesight) reflected, “Those who have heard classical music jugalbandi or witnessed jazz musicians jamming will appreciate the creative tension, the give and take that was the thread throughout this discussion, reflecting the reality of the relationship between entrepreneurs and VCs.”
Watch the video
INVESTORS:
Ankita Balotia, VP, Fireside Ventures
Aashish Vanigota, Principal – Investments, IvyCap Ventures Advisors Private Limited
Bhawna Bhatnagar, Co-founder, We Founder Circle
Nitya Agarwal, VP-Investments, 3one4 Capital
Harmanpreet Singh, Founder & Managing Partner, Prath Ventures
Vamshi Reddy, Partner, Kalaari Capital
Zoeb Ali Khan, Vice President, Sauce.vc
D2C FOUNDERS:
Abdus Samad, Founder, Sam & Marshall Eyewear
Akshay Mahendru, Co-Founder & CEO, The Pet Point & Nootie
Malvika Jain, Founder, SEREKO
Nitin Jain, Founder, Indigifts
Puneet Tyagi, Egoss Shoes
Radhika Dang, CEO & Founder, The Good Karma Company
Rahul Aggarwal, Coffeeza
Udit Toshniwal, Founder & Director, The Pant Project
Vaani Chugh, Co-founder & Director, D’chica
Yash Kotak, Co-founder, Bombay Hemp Co.
Yashesh Mukhi, Co-founder, Chupps
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August 19, 2024
Ratna Bhushan, Economic Times
New Delhi, 19 August 2024
Close to a dozen small to mid-sized global cafes and restaurant brands have either entered India in the past two quarters or are in talks with local players at a time when large global chains are seeing sharp decline in same store sales and growth.
Mid-sized global chains are making investments even in a modest range of Rs. 20-30 crore to tap select cities and intend to keep store counts under about 30 to stay profitable on each store. This is in contrast to earlier times when cafes and chains entered India with mega deals and investment plans, executives said.
Belgian bakery Le Pain Quotidien, French patisserie chain Laduree, UK’s JD Wetherspoon and Frank HotDogs are among those to have inked collaborations with Indian partners, while newer homegrown ones such as Harley’s, Paper & Pie, abCoffee and First Coffee are expanding with first-time investors and mid-rung store rollouts.
“A combination of factors is driving this change of newer, smaller launches,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. “There are niches the newer chains are addressing as consumers’ choices evolve and get more specific. Also, there’s a broadening of a wealth base in India leading to mid-sized business houses having capability to invest and willingness to try out newer segments,” he said.
With the big-bang launches in food services drying up, there’s been a mushrooming of small deals that is expected to surge.
Bake & Brew, which has inked a master franchise agreement with Belgian bakery chain Le Pain Quotidien to re-enter India, is investing Rs 35 crore in the first year. “We’ll start in metros and may expand to smaller towns later. We also see potential in travel retail, airports and larger train stations,” Annick Van Overstraeten, chief executive of Le Pain Quotidien, told ET. Bake & Brew is backed by the Nalanda group with core business interests in automotive metal parts.
Earlier this month, the French patisserie chain Laduree said it was launching its cafe at Ritz-Carlton, Pune, in collaboration with CK Israni Group which has business interests in home decor and construction. Its Managing Director Chandni Nath Israni said in a statement that the CK Israni group planned to expand Laduree’s presence across other Indian cities.
Experimenting in newer cuisines is also driving the change. “Our decision to expand in India stems from a deep appreciation for variety and a passion for bold flavours. We see great potential in the Indian market,” said Benjamin Attal, founder of US chain Franks Hot Dog.
Smaller and newer homegrown chains, in contrast, are expanding, backed by mid-ticket investors and business houses, many of whom are foraying into food services for the first time.
Last week Brigade Group, a realtor, announced a partnership with specialty coffee chain abCoffee to set up six outlets within Brigade properties.
“We partnered with abCoffee to enhance the F&B offerings at our office parks. abCoffee is able to retrofit into operational buildings without requiring additional water or gas points,” Arvind Rao, vice president – commercial business, Brigade Group, said.
Specialty coffee startup First Coffee plans to open 35 stores by 2024-end “focused on delivery and minimalist store aesthetic,” according to a company statement, to sell flavoured coffees, cold brews and bubble teas.
(Published in Economic Times)
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August 19, 2024
Sagar Malviya & Faizan Haidar, Economic Times
19 August 2024, Mumbai/New Delhi
About a dozen listed lifestyle, grocery retailers and quick-service restaurants (QSRs) reduced their employee count by nearly 26,000 in FY24, retreating from the hiring spree of the past two financial years after they slowed down store expansion rate amid weakening demand.
According to their latest annual reports, the reduction was completely led by five retailers – Reliance Industries’ retail arm, Titan, Raymond, Page and Spencers – which saw their combined workforce decline 17% or by 52,000 people. The staff count was across permanent and contractual employees and adjusted for attrition in the retail segment, the second largest employer after agriculture. These retailers had a combined workforce of 429,000 people in FY24 compared to 455,000 employees a year ago.
“There is a shortage of talent and we are trying to tie up with universities so that the industry has the option to hire. Some companies might have reduced staff due to shutting of some business, but companies like Shoppers Stop and Trent continue to expand and will require staff,” said Kumar Rajagopalan, CEO of Retailers Association of India that represents organised retailers in the country.
Consumers had started reducing non-essential spending such as that on apparel, lifestyle products, electronics and dining out since Diwali 2022 due to inflation, increase in interest rates, job losses in sectors like startups and IT, and an overall slowdown in the economy. India’s retail sales expansion slowed to 4% last year after a surge in spending across segments-from clothes to cars-in the post-pandemic period, triggered by revenge shopping.
RIL in its annual report said the overall voluntary separations in FY24 were lower than FY23 and the retail industry typically has a high employee turnover rate, especially in store operations.
“Store productivity usually happens in cycles and we have seen consumers unleash their spending post pandemic, which led to retailers expanding their network or square footage. However, if some of the stores are unviable, then management teams are now highly objective, even ruthless, and will shut stores,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “In addition, any company planning to list would like to have healthy and lean operations, although we cannot pin-point it to Reliance in this case.”
Weak sales saw these retailers having the slowest pace of store expansions in at least five years at 9%. The retail sector took 7.1 million square feet of space across top eight cities in 2023, which is expected to dip to 6-6.5 million sq ft in 2024, according to commercial real estate services firm CBRE.
“There’s an enormous management bandwidth requirement to just get this entire ship running in the right trajectory, right direction, and with the relevant speed. We are thinking about what this company will be 10 years from now. And hence, if you want to reach there in a nice way without too much damage or bruises, then what is the kind of talent we need to have today in the next 2 years, in the next 3 years?” Avenue Supermarts CEO & MD Neville Noronha asked investors.
(Published in Economic Times)
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July 28, 2024
Writankar Mukherjee, Economic Times
Kolkata, 28 July 2024
Top retail chains such as Reliance Retail, Shoppers Stop and Spencer’s Retail are facing a prolonged slowdown in consumption, pushing them to exit unprofitable markets, raise debt and control costs.
India’s largest retailer Reliance Retail shuttered 249 stores in the three months ended June. The company is also going slow on expansion, opening 331 new stores in the quarter compared to 470-800 stores opened every quarter in FY22, FY23 and FY24. The closures mean the retail business of Reliance Industries made 82 net new store additions last quarter–the lowest in 15 quarters.
Spencer’s Retail has decided to completely exit North and South India markets by closing 49 stores in the National Capital Region (NCR), Andhra Pradesh and Telangana. The step will erase Rs 490 crore of annual revenue, but the company is hopeful it will improve profitability.
Shoppers Stop chief executive officer Kavindra Mishra told investors last week that it may have to defer a few store openings this fiscal due to regulatory and other issues. The company will also borrow Rs 100 crore for expansion with demand remaining soft.
Meanwhile, V-Mart Retail has closed 22 stores in the first six months of 2024, as per its latest investor presentation.
“Pruning underperforming locations is a natural reaction during times of demand stress,” said Devangshu Dutta, CEO of retail sector consulting firm Third Eyesight.
Pure Economics
“Demand forecasting can never be perfect due to a lag between demand assessment and supply. Retailers now try to do away with underperforming stores at the bottom of the pile quickly. Earlier there were prestige issues in shutting down stores, but now it’s acceptable industry practice and pure economics,” said Third Eyesight’s Dutta.
Analysts say most retailers expanded rapidly after the pandemic, banking on pent-up demand and revenge shopping at the time. With demand turning sluggish, the industry is now being forced to take various steps to sustain operations. At Reliance Retail, net profit rose by a modest 4.6% from a year earlier in the June quarter to Rs 2,549 crore while revenue grew 6.6% to Rs 66,260 crore. It was the slowest pace of revenue growth and came after a 9.8% increase in Q4FY24. Net profit and revenue from operations fell sequentially in the June quarter.
Spencer’s Retail CEO Anuj Singh told analysts on Thursday the 49 stores it is closing make up nearly 22% of revenue, but also Rs 56 crore of losses at the regional Ebitda level in North and South India. “They were a drag on the balance sheet. We will now focus on Uttar Pradesh and the East where there is a sizable consumption opportunity with a 250 million population,” he added.
Singh said the store rationalisation exercise and about 35% headcount reduction at corporate offices will reduce overheads from 8% operating cost to 6.3% of total sales. “We now expect to achieve Ebitda breakeven by March 2025 which will give us the option to raise capital,” he said.
Mishra at Shoppers Stop said demand remained subdued last quarter due to fewer wedding dates, long election season with polling dates on weekend, heatwaves, and high level of cumulative inflation. All these factors combined hit growth and volume recovery, except in value fashion and beauty.
More stores shut than opened
In fact, the sustained demand slowdown saw chains like Pantaloons, Spencer’s Retail and Nature’s Basket close more stores than they opened last fiscal. Retailers like V-Mart Retail, W, Aurelia and Titan Eye+ had a higher rate of store closures than openings in the March quarter.
(Published in Economic Times)
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July 8, 2024
Sharleen D’Souza, Business Standard
Mumbai, 7 July 2024
In 2023, after more than two years of development and testing, Mondelez India launched a version of Bournvita that delivers about half the recommended daily allowance of key micronutrients for children, including iron, iodine, and zinc, as well as vitamins A, C and D. All this while having 15 per cent less added sugar.
“Prior to this and around two years ago we also introduced Bournvita 50 per cent less sugar variant to provide an option for consumers. We have made adaptations to our portfolio products like Bournvita biscuits, which now have 15 per cent less sugar, and our most loved Oreo chocolate variant has also seen a 5 per cent decrease in sugar content,” the company said in an email.
This drive is not confined to Mondelez. Other multinational companies, too, such as Coca-Cola, PepsiCo, and Nestle India, have been working on bringing down the sugar, salt, and sodium content. They could be patting themselves on the back for doing this. Not only has the Indian consumer become more health conscious than ever — with all the talk going around that salt and sugar are two of the monsters in your kitchen (the third being maida) — but also the country’s food regulator has swung into action.
On Saturday, the Food Safety and Standards Authority of India (FSSAI) approved a proposal that information about the sugar, salt and saturated fat content on labels of packaged foods and beverages should be bolder and bigger. “Along with empowering consumers to make healthier choices, the amendment will also contribute towards efforts to combat the rise of noncommunicable diseases and promote public health and wellbeing,” the FSSAI said in a statement.
Earlier, the regulator advised ecommerce platforms to ensure that dairy-, cereal-, and maltbased beverage mixes were not available under the “health drinks” or “energy drinks” categories. The recommended sugar intake is 20 grams a day for adults and 25 grams a day for those below 18. Not more than 5 to 10 per cent of a person’s total energy intake should come from sugar. Children under two are not supposed to consume any added sugar. However, these guidelines are often breached because people tend to consume packaged foods.
Therefore, experts and activists have been calling for a different labelling, which would announce out loud what lies inside.
Eating right, drinking right
Some multinationals had already been working on reducing the salt and sugar content. For instance, Coca-Cola removed more than 900,000 tonnes of added sugar globally since 2017, and 19 of its top 20 brands offer reduced-sugar or zero-sugar options. In India, Coca-Cola’s Minute Maid Honey Infused drinks offer added dietary fibre for healthy digestion in three flavours.
“In 2022, approximately 68 per cent of our global beverage portfolio contained less than 100 calories per 12-ounce serving (350 ml), with 246 low- or no-sugar options launched,” Coca-Cola India said in a statement to Business Standard.
The company added that it prioritised transparency by placing calorie information on the front of all its packaging worldwide and did not market its products directly to children under 13.
Nestle India joined the FSSAI’s Eat Right movement and signed the pledge to reduce an average of 6 per cent added sugar, 10 per cent salt, and 2.5 per cent fat in its relevant product categories. “The company has achieved these commitments,” it said.
Varun Beverages, PepsiCo’s India bottler, told its investors on a conference call that its gross margins improved significantly, rising by 385 basis points to 56.3 per cent — and sugar had a role to play in it.
“This increase was largely driven by our focus on reducing sugar content and the light-weighting packaging material, incidentally, also meeting our sustainability initiatives along with the benefits from reduced PET prices which contributed to this improvement,” Raj Pal Gandhi, chief financial officer of Varun Beverages, said on the investor call.
Approximately 46 per cent of the company’s reconsolidated sales volumes, he said, came from low-sugar or no-sugar products. The no- or less-sugar trend is working for the company as it optimises its cost structure and enhances its overall efficiency.
“These efforts have had a tangible impact on our financial performance with EBITDA increasing by 23.9 per cent to the level of Rs. 988.76 crore year-on-year, and the Ebitda margin improving by 240 basis points to the level of 22.9 per cent in quarter one of 2024 (January-March),” Gandhi said. Ebitda, a widely accepted benchmark of profitability, is short for earnings before interest, tax, depreciation, and amortisation.
“So, we are developing more and more — Gatorade, we mentioned a new launch which PepsiCo has given us formulation with zero sugar. So, effort is there, and constant effort is there to reduce the sugar content,” Gandhi said. PepsiCo India said in an earlier statement it had initiated trials of a blend of sunflower oil and palmolein oil in certain parts of its portfolio last year, thus becoming one of the few players in the food industry in India to do so.
Rush of junk
Experts say the standards for food and beverages vary across the world and India should have its own. “There should be thresholds for healthy and unhealthy and, in my view, this should be labelled boldly on the front of the pack,” says Arun Gupta, convener, Nutrition Advocacy for Public Interest (NAPi), a think tank.
A report titled The Junk Rush, jointly brought out by the Breastfeeding Promotion Network of India and NAPi, said: “India faces a severe public health crisis of obesity and diabetes.” In 2022, a group of public health experts, consumers, lawyers, and patient groups had called upon the government of India to check the soaring consumption of junk food among the country’s youth.
“Certain countries are more stringent than others. Even global brands have the same product, but the ingredients differ across countries and continents,” says Devangshu Dutta, founder of Third Eyesight. He explains that India still has some road to travel on food safety, alleging that some ingredients benefit companies more — such as by providing a longer shelf life — than the consumer.
“The Indian regulator is still very new to the game. If you look at processed foods, it is a newer market and the regulator needs to pick-up pace,” Dutta says.
On Saturday, the FSSAI picked up pace.
(Published in Business Standard)
