100 years of Sabyasachi? The fashion designer’s quest for legacy

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November 17, 2023

Smita Tripathi, Business Today

17 November 2023

“I don’t care about being No. 1 or No. 2. I don’t care about how much money I’ve made today, or how much money I’m going to make tomorrow. I think you are successful as a business if you last. Because when you’re trying to create a business, what is important is longevity,” says Sabyasachi Mukherjee, arguably the leading fashion designer in the country.

It is a sultry September morning in Kolkata as we interact with a relaxed Mukherjee—dressed in his signature white kurta-pyjamas and self-designed black sleeveless jacket (he made a guest appearance recently on Season 2 of Amazon Prime Video’s Made in Heaven with the same look)—at his beautiful home in Alipore, a tony locality in the City of Joy. The interiors, which ooze his signature baroque style, are an extension of his personality, which is also reflected in every Sabyasachi store. Mukherjee has tastefully decorated his abode with beautiful curios from around the world. Just like in his stores, the interiors of his home exude class and grandeur.

Billionaire Kumar Mangalam Birla-led ABFRL has bought 51 percent stake in Sabyasachi. Experts believe that ABFRL and Mukherjee complement each other well (Photo Credit: Business Today)

Mukherjee reveals that a few years ago, he was going through the anniversary issue from the 1930s of a leading fashion magazine. “I saw a small ad that said we are now open for business on Bond Street. It was for Tiffany’s. There were other larger ads for bigger brands from that time. But I don’t remember them. I remember Tiffany & Co. because it lasted and the rest of them just evaporated. And I said to myself that I’ll try my best that doesn’t happen to mine,” says the 49-year-old, who has come a long way since setting up his eponymous label in 1999 with a workforce of three, having borrowed Rs 20,000 from his family.

Over the past two decades, Mukherjee (or Sabya, as he is popularly called) has dressed Bollywood royalty (read Deepika Padukone, Anushka Sharma, Priyanka Chopra, Alia Bhatt), heiresses (Isha Ambani), models, and hundreds of brides across the world. Being a ‘Sabyasachi Bride’ has become a cultural phenomenon that has established the brand as a leading design house.

But Mukherjee doesn’t believe in resting on his laurels. It is the next 20 years that he is planning for. “I want to be India’s first global luxury brand.” And he is working towards it slowly and steadily.

Designer Sabyasachi Mukherjee’s flagship store in Mumbai. Launched in March this year, it is his largest flagship store yet. Spread across 25,000 sq. ft, it is housed in a majestic neo-classical heritage building at Horniman Circle (Photo Credit: Business Today)

Over the past few years, he has launched his jewellery line as well as accessories. The brand now offers ready-to-wear western wear and he recently entered into a collaboration with US luxury eyewear brand Morgenthal Frederics to launch his range of sunglasses. On the cards is a beauty and wellness line that should launch in a few months. Last year, he opened a store in New York; he had a window display of his jewellery at the Bergdorf Goodman store in Manhattan; and his clothes and accessories will be available at top luxury departmental stores like Selfridges and Browns in another couple of years. In March, he opened his largest flagship store, at 25,000 sq. ft, in Mumbai. “I have spent the last five years growing the brand and making it visible. If this country cannot occupy a position of power in the luxury industry, then shame on all of us. Luxury has been a part of our ecosystem,” he says.

Keeping in mind Mukherjee’s two goals—longevity and global growth for the brand—he sold a 51 per cent stake to Aditya Birla Fashion and Retail Ltd (ABFRL) in 2021, reportedly for Rs 398 crore. “Nobody in my family is interested in my business, I don’t have children, and often a mistake that many entrepreneurs make is that they don’t let go of control at a time when they should, so that they can build tomorrow,” says Mukherjee. “But what I want to do—while I’m still in my prime and I still have full control over my company—is to use the next 20 years to [plan for] tomorrow. I want to create my second-in-command; I want to create a succession plan. So that [brand] Sabyasachi does not go down with me; it deserves a much longer shelf life,” says the designer who broke the rules by signing out of fashion weeks in India and launching his collection directly on Instagram in 2016. It’s a practice the brand continues with the latest Autumn-Winter 2023 collection having dropped on Instagram in mid-September. “Why bother with front row politics, when the world can be your front row,” he says.

As he continues to grow, Mukherjee has not forgotten his middle-class roots. His father was the son of a refugee, raised by a single mother. He was a chemical engineer who worked in a jute/wool mill that shut down and he lost his job. “My father gave maths tuitions, my mother taught art and I taught English as a teenager to make ends meet,” he says, adding there was a time when he didn’t want to go to school because he was traumatised with the privilege that his friends enjoyed. “I once saw my father crying while standing next to the kitchen sink. And I realised that’s what money does to you. It brings you to your knees and strips you of your pride. I felt the same helplessness during Covid-19. I was responsible for all these people,” says Mukherjee. However, after a conversation with his CFO, the designer was relieved to know that they could survive for three years and as a result, no one was let go.

Mukherjee says he had been in talks with billionaire Kumar Mangalam Birla, Chairman of the Aditya Birla Group, for a few years before Covid-19 and it was his decision to sell the majority stake to ABFRL. He says he wanted to work with Birla for the way he has treated his children. “I think it takes a very wise parent to be able to allow his children to be what they want to be. I told him I wanted to partner with you because I think that you have a lot of wisdom. And for me, that’s a great value.”

The designer believes it is this wisdom that makes working with the group easy. “They’re silently trying to build an ecosystem for me without interference, because they know that I do the job the best because I know the domain the best. And they let me lead naturally… When I work with them, I don’t have to be mindfully conscious of the fact that they’re a $57-billion empire. They treat me as an equal partner.”

Harminder Sahni, Founder & MD of consulting firm Wazir Advisors, says that the only way forward for brands like Sabyasachi is to either sell to a corporate or to corporatise. “For growth, you need the backing of a corporate house. Especially if you want to go global as it’s an expensive foray and it is uncharted territory.” As far as expansion into various categories is concerned, Sahni says there is no playbook. While some may expand into larger small-ticket categories to make the brand available to a larger demography, others may stick to their core.

“For any brand to scale globally, it needs to be relevant to consumer audiences that are outside its home market,” says Devangshu Dutta, Chief Executive of consultancy Third Eyesight. For any brand whose products draw heavily from the roots in terms of silhouettes and embellishment techniques, adding products that fit with the ethos and needs of the targeted global markets becomes a must, he adds.

ABFRL and Mukherjee complement each other as the company brings its expertise in understanding consumers at a larger base while the designer is more aware of consumers at the top of the pyramid. “They have a very acute understanding of a consumer that is not mine today but will be mine tomorrow. And I have a very acute understanding of the consumer that they don’t have yet but might get tomorrow.” Mukherjee says he did not take private equity funding earlier because he was not ready. “I’m not here to make money. I’m here to create value. And there’s a huge difference. Value creates money eventually. But money never creates value. With ABFRL, we are very clear about what we want to do.” As for financials, in FY22, Sabyasachi Calcutta (what the company is called post the acquisition) posted a turnover of Rs 229.42 crore, which rose to Rs 343.86 crore in FY23, per ABFRL’s annual report. But profit after tax fell from Rs 27.72 crore in FY22 to Rs 7.96 crore in FY23.

He feels luxury is becoming more abstract and it is about finding value. Moreover, consumers are buying less but better stuff. “People are flirting, but they’re not consuming. It’s like they are channel surfing. What is going to happen is that consumers are going to buy less, but they’re going to buy better. And I’m preparing my brand for that.”

With ABFRL’s backing, the designer is busy strengthening the brand. “We are going to use our core—which is wedding couture—for storytelling, to be able to create different-tiered products at different prices to be able to engage our customers who will slowly and steadily find a ladder to climb up to the core.” However, he plans to make wedding couture very limited and very exclusive. He has already started creating guardrails. Bollywood partnerships have reduced significantly and he is no longer giving his creations for the red carpet. In today’s age of social media, Mukherjee says that everyone believes that they are a celebrity. “For us, our customers are our celebrities. And we are trying to create something that is unique for them. And that’s something that’s not made very visible. But what we are going to make democratically visible are our entry-level products; once we get into beauty that is going to be the most widely distributed. And then it’s going to be accessories.”

Mukherjee says that Indian clothing, which is the heart and soul of the brand, will become more and more exclusive. In clothing, the focus will be on western ready-to-wear. However, that too will be of the best quality. For instance, ready-to-wear starts at Rs 35,000 for a silk shirt with an original artwork, digitally printed. “We are very mindful that we will never dilute the core.” he says.

While currently it is wedding couture that contributes the maximum to revenues, he expects jewellery to surpass that over the next few years. Mukherjee launched his jewellery collection in 2017 and while it was a natural fit, he had an interesting reason for doing so. “When I started looking at people’s selfies, I realised that we occupy the smallest real estate. You see a little bit of the blouse in a wedding picture, you see the garland, the make-up and the jewellery. Where are the clothes? Nowhere. And if the bride decides to wear a bikini blouse, then God save us,” he laughs. “So that’s when I realised that I want more real estate in that picture. And, for me, it was a logical move to start getting into beauty which we’ll eventually get into, and to get into jewellery.”

Accessories is another category he is focussing on as that allows more people to own the brand. Mukherjee is one of the most copied designers in the country. “Today, all top jewellers in the country are copying my jewellery. It happened with my clothes, it’s now happening with my jewellery, so I know we are on the right track,” he says. The same is the case for his accessories. “You go into a copy market and you see LV, Calvin Klein, Gucci and Sabyasachi. I am flattered because that means we have done something right,” he chuckles.

Over the years he has entered into some remarkable collaborations, establishing his brand further. In 2015, he announced his first global one with Christian Louboutin with a collection of limited-edition shoes and handbags, showcasing Sabyasachi’s hallmark embroidery and craft, with Louboutin’s iconic red sole. He also launched the Sabyasachi for Nilaya collection in collaboration with Asian Paints. Other collaborations have included Pottery Barn, H&M, L’Oréal, Strabucks, Thomas Goode, etc. He says he is open to more collaborations but only with brands that are the best in their field and those that allow him to “tell the Indian story without apology”. “I would never do a collaboration, irrespective of how much money was being offered to me, if I was not able to tell the story of who I am and where I come from. I can make more money by selling on my Instagram,” says the designer who went off all social media three years ago to get away from the clutter and the noise. His brand, though, is very active on social media.

(Photo Credit: Business Today)

Mukherjee can be credited with revolutionising luxury retail in the country. Walk into any Sabyasachi store and you are transported to a world of opulence and luxury rarely seen anywhere else. For instance, at the Mumbai store, over 100 chandeliers, 275 carpets, 3,000 books, and 150 works of art created by the Sabyasachi Art Foundation—which he runs to promote art—are layered among antique Tanjore paintings, vintage photography, rare lithographs, and historical trinkets, some from his own collection.

“When I saw the Ralph Lauren flagship store for the first time, it made me realise how important the soft power of a retail store is to be able to influence a customer because it’s an immersive journey, which tells the length and the breadth of the brand’s story,” says Mukherjee, adding that today it is not just about the product but also the experience of selling the product.

With the opening of the Mumbai flagship store, the total number of Sabyasachi stores in India stands at four, the others being in Kolkata and Delhi, and a jewellery store in Hyderabad. In addition, there is the New York store and an exclusive Sabyasachi Jewellery boutique in Dubai.

Will he look at more expansion? Not immediately, he says. “We are going to build our flagship stores one geography at a time. I first want to expand brand literacy by building our flagship so that the story of what the brand is all about and who we are does not get diluted. We will take our time to understand the geography and then expand later,” he says. However, a part of the business is going to be opened to wholesale again. “Which means that in a couple of years, we are going to start speaking to departmental stores such as Selfridges, Browns, etc.,” These are stores where Mukherjee used to retail at the beginning of his career in 2004-05.

“Right now, I’m charting my own growth, one brick at a time, so that I last those 100 years,” he signs off.

(Published in Business Today)

Luxury brands script clause to share space with equals at Jio World Plaza

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November 4, 2023

Faizan Haidar, Economic Times
4 November 2023

Some of the super-luxury brands that have opened stores at the recently inaugurated luxury mall, Jio World Plaza in Mumbai, have put in a condition that at least four top brands – such as Louis Vuitton, Gucci, Cartier, Burberry, Tiffany, Valentino, Bulgari, Zegna, Giorgio Armani and Bottega Veneta – should be present in the same complex, to ensure the position of their brands is not diluted.

ET has seen copies of the agreements between Reliance Industries, the owner of Jio World Centre, and five brands, accessed through data analytic firm CRE Matrix.

Reliance Industries and the brands did not respond to emails seeking comment till press time on Friday. Brands often have an exclusivity clause with the mall where they don’t want competing brands near their stores. However, in the high-end segment, to ensure a similar buyer profile, they want similar stores nearby. Jio World Plaza already meets the condition with several of these super-luxury brands having opened their outlets there.

“If at least four among the mentioned brands are not open within six months of us starting the operation, we should be entitled to a reduction of the licence fee by 25% for the period that this criteria remains unfulfilled,” Christian Dior Trading, which will operate Dior, has said in the agreement.

Dior will pay ₹21.56 lakh in monthly rent for a 3,317 sq ft space in the complex. Gucci has given a list of six luxury brands – Louis Vuitton, Dior, Cartier, Bulgari, Valentino and Burberry – and demanded that at least four have to be represented in the shopping centre.

Louis Vuitton, Cartier and Bulgari have also put in similar conditions. Most of them have kept the right to terminate the agreement after serving the notice for nine to 12 months.

“In the super-luxury segment, most of the brands complement each other and that is why they want the presence of these brands next to each other. Good mall developers also go with zoning of brands and don’t want to mix the super-luxury brands with the premium or mid to premium brands. As more luxury brands are contemplating India entry, we will see more luxury spaces coming up,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.

India only has a handful of malls that give space exclusively to super-luxury brands.

Decathlon FY23 sales shoot up 37% in India

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October 26, 2023

Sagar Malviya, Economic Times
26 October 2023

Surging demand for fitness wear and sports equipment for disciplines other than cricket and football helped Decathlon’s India unit expand sales 37% to Rs 3,955 crore in FY23. With more than 100 large, warehouse-like stores selling products catering to 85 sporting disciplines, the French company is bigger than Adidas, Nike and Asics all put together in India.

In FY22, sales were Rs 2,936 crore, according to its latest filings with the Registrar of Companies. The retailer, however, posted a net loss of Rs 18.6 crore during the year ended March 2023 compared to a net profit of Rs 36 crore a year ago.

Experts said a host of factors – from pricing products about 30-40% lower than competing products to selling everything from running shoes, athleisure wear to mountaineering equipment under its own brands – has worked in its favour. “They have an extremely powerful format across different sporting activities and have something for both active and casual wear shoppers. For them, the market is still under penetrated with the kind of comprehensive product range they sell for outdoor sports beyond shoes and clothing,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “Even their front end staff seem to have a strong domain knowledge about products compared to rival brands.”

By selling only private labels, Decathlon, the world’s biggest sporting goods firm, controls almost every bit of operations, from pricing and design to distribution, and keeps costs and selling prices low.

Decathlon uses a combination of in-house manufacturing and outsourcing to stock its shelves. In fact, it sources nearly 15% of its global requirement from India across sporting goods. And nearly all of its cricket merchandise sold globally is designed and made in India.

(Published in Economic Times)

The Classic pivot: Charting ITC’s FMCG growth story

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October 13, 2023

Anand JC, Economic Times
13 October 2023

Once the butt of jokes in Dalal Street circles, 113-year-old ITC has turned a new leaf in recent years, as its strategy to derive higher revenue from its consumer business is bearing fruit, bit by bit.

Registered in Calcutta as the Imperial Tobacco Company, the FMCG major has always relied on its cigarettes and leaf tobacco business for a major chunk of its revenues. ITC’s true diversification move might have begun with the launch of its hotel in Chennai in 1975, including a failed attempt at the financial services business, but it wasn’t until August 2001 that the tale of the FMCG behemoth came to be.

Having relied on its cigarette business since 1910, ITC has increasingly sought to earn more from its ‘cleaner’ consumer goods products. In a 2018 interview, CEO Sanjiv Puri admitted that while the journey to diversify the company started a long time ago, it only got traction around 2008. Under Puri’s first term as the ITC chairman, the company embarked on the ‘ITC Next’ strategy. The first decade was focused on preparing the company for the transition, he said. ITC now can innovate products, create brands and allow “pro-neurs” or professional entrepreneurs to build businesses in FMCG.

The plan has worked

ITC, a darling of dividend-led investing lovers, has always been a long-term growth story in the making. Nearly two decades after entering the food business, the company holds a leadership position across categories.

As per the company’s latest annual report, it holds the leadership spot in the branded Atta market through Aashirvaad, cream biscuits segment via Sunfeast, bridges segment of snack foods via Bingo!, notebooks via Classmate and dhoop segment via Mangaldeep. Its Yippee noodles trails Nestle’s Maggi, as the latter continues to lead in a highly consolidated market. However, Yippee has managed to gobble up Maggi’s share at an enviable pace. Capturing these positions, this quickly is no easy feat either.

One of the things that worked for ITC is their understanding of the distribution of products, stemming from their strength in the tobacco business. ITC started exploring aggressively diversifying away from the tobacco business around the 90s, says Devangshu Dutta, head of retail consultancy Third Eyesight.

ITC’s foray into the food business was supported by its presence in the hotel business. “Some of the marquee products that used to be served in their hotel restaurants, packaged dal and so on, they packaged and sold but it was not a humungous success. It was marginal at best.”

“But they started understanding the distribution aspect because those were sold through traditional distribution channels,” Dutta says.

ITC also put in a lot of financial muscle behind the brand building, given no dearth of resources, Dutta says. This helped them grow rapidly in product categories in which they didn’t have a presence earlier on.

“Starting from scratch, particularly on the foods side, ITC has been one of the most successful companies in the last 15-20 years. Their overall revenue this year has been roughly Rs 19,000 crore, out of which Rs 15,000-16,000 is purely from foods segment,” Amnish Aggarwal, Head of Research, Prabhudas Lilladher told ET Online.

“For a company which started this business, maybe, say, two decades back, this is a very big achievement,” he says.

Unlike its commanding position in its cigarette business, ITC’s ‘other-FMCG’ ambitions faced stiff competition from local and national companies in categories including soaps, shampoos, atta, snacks, biscuits, noodles and confectioneries.

Supporting ITC’s ‘other-FMCG’ ambitions is its core competency, the cigarette business. ITC’s consumer business’ growth has weathered storms, in part, thanks to the cash flows generated by its cigarette business which has helped it create stronger brands, an essential part of any consumer-centric business. Through its cigarette business, ITC also gets unparalleled access to a network of brick-and-mortar stores that have a diverse presence across India.

Also complimenting its growth is ITC’s agri-business, a segment which has also grown in strength over the years. From 10 per cent in FY14, the agri-business in FY23 contributed around 24 per cent to the company’s revenue from operations, as per ET Online’s calculations. ITC over the years has invested in building a competitive agri-commodity sourcing expertise. Some of these structural advantages have facilitated the company’s sourcing of agri raw materials for ITC’s branded packaged foods businesses, be it towards its atta, dairy or spices.

Like its peers, ITC too has given a fair deal of importance to its digital push, with more and more companies launching their D2C platforms. These platforms help customers buy products directly from the company website without the hassle of dealing with channel partners, and at the same time, the companies get their hands on first-party data. Such access can help the company market its offerings better. ITC, like some of its other peers, has also been investing in start-ups to diversify its product portfolio. It recently invested in Yoga Bar and Mother Sparsh.

The numbers behind ITC’s consumer business behemoth

Built to engage in the tobacco business, ITC got into cigarette packaging nearly 100 years ago. Another intent in recent decades has been to focus more on the non-cigarette business.

Puri saw it coming.

Upon being asked about the FMCG business overtaking cigarettes, Puri had said “We do not give guidance. But it will certainly happen because the other businesses are growing faster.”

After contributing nearly 62 per cent to the overall revenue in FY14, the cigarettes business in FY23 contributed only around 37 per cent.

ET Online calculations show that the other-FMCG business contributed 17 per cent to the overall revenue in FY14, which grew to 25 per cent in FY23.

Data confirms the claims made in the above segment. ITC’s non-cigarettes businesses have grown over 31-fold and currently form over two-thirds of its net segmental revenues. The company’s other-FMCG business didn’t start turning consistent profits up until FY14. Since then, it has gone from strength to strength.

ITC’s Other FMCG segment (the second largest contributor to sales) is also witnessing strong earnings and growth momentum, unlike most consumer staples peers.

The segment clocked a revenue of 19 per cent YoY while Nestle and Britannia saw 21 and 11 per cent growth each. FMCG EBITDA performance was even better, with the margin expanding by 430 bps YoY to 13.3 per cent & EBITDA growing 2.1x YoY.

Laughing stock no more

For years, the cigarette business has funded the growth of ITC’s other businesses like non-cigarette FMCG products, sometimes to the ire of shareholders who weren’t happy with the slow growth in financials and scrip value.

A slower growth in scrip value meant that for years ITC was also the laughing stock among social media circles. The stock often remained elusive during market rallies in the previous decade, offering poor returns in comparison to FMCG peers. Between 2014 and July 2022, ITC rose with dividends rose 53 per cent while Nifty50 rose 200 per cent, as per moneydhan.com, a SEBI RIA. ITC’s shares trailed the Sensex for five out of eight years through 2020.

“In the last ten years, HUL has done far, far better than ITC. And if you look at other companies in the same universe, say Dabur, it has also given superior performance. ITC has actually underperformed many of the large consumer names,” Aggarwal said.

But fast forward to 2023, not only is it among the best performers within the benchmark index, ITC has even trumped it. While Nifty50 has gained around 17 per cent in the last year, ITC has grown nearly 40 per cent. The ITC scrip in July crossed a market capitalization of Rs 6 lakh crore, beating HUL to become the largest FMCG company.

Sin stock

Prompting a move away to other segments is the nature of the cigarettes business. Tobacco is toxic, and investors are increasingly recognising it as such. Sin stocks are shares of companies engaged in a business or industry that is considered unethical or immoral.

While Environment, Social, and Governance (ESG) investing may be at a nascent stage in India, it is a serious parameter for global investors. Asia’s largest cigarette maker ITC cannot ignore it.

“The company sustained its ‘AA’ rating by MSCI-ESG –the highest amongst global tobacco companies– and was also included in the Dow Jones Sustainability Emerging Markets Index,” Puri noted in the company’s 2022 sustainability report.

Cigarettes, a bitter but essential overhang

For all the accolades for its gains in its other-FMCG business, ITC is nowhere close to ending its love for cigarettes, not that we are claiming it wants to. The Gold Flake-maker currently controls nearly 80% of the cigarette market.

The numbers in recent years suggest that the segment is flourishing more than ever before.

On an annualized basis, the return on depreciated cigarette assets is approaching a staggering 240%, three times the level two decades ago, as per a Bloomberg report. The entire legal cigarette industry was bleeding in the recent past due to punitive and discriminatory taxation on cigarettes. Taxes on cigarettes in India are multiple times higher than in developed countries viz. 17x of USA, 10x of Japan, 7x of Germany and so on, data shows.

But, companies are now recovering due to stable taxation. ITC’s three four-year cigarette sales CAGR are at their best levels since FY15 despite the company not taking material price increases over the last 13-14 months, as per a Motilal Oswal report.

ITC, which accounts for three out of every four cigarettes sold in the white market in the country, is currently seeing its best growth levels in over a decade, and is far superior to the flattish volumes of the past ten and twenty years.

(Published in Economic Times)

All charged up

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September 25, 2023

Akanksha Nagar, Financial Express

September 25, 2023

Adding to the fizz in the energy drink market, NourishCo, a division of Tata Consumer Products (TCP), has unveiled Say Never — a caffeine-based energy drink priced at Rs 10 for a 200 ml cup — in two variants of red (berries) and blue (tropical flavours). In its initial phase of launch, the brand will be available largely through general trade outlets in Karnataka and some key markets of the north, including Delhi, NCR, Uttar Pradesh and Bihar. Vikram Grover, MD, NourishCo Beverages, TCP, says, “With Say Never we are celebrating the heroes who carve their own path.”

As a functional beverage, the energy drinks segment has grown by leaps and bounds in recent years to stand at Rs 3,500 crore in 2022. Experts reckon the market will touch Rs 10,000 crore by 2027. Red Bull is the category leader with a 61% market share of the market.

PepsiCo’s debut of Sting a few years ago at an inviting Rs 50 for 250 ml (as opposed to Red Bull’s Rs 125 for 250 ml can) had shaken up the category. With a 7% market share Sting has surpassed PepsiCo’s older products like Mountain Dew to become the company’s fastest-growing brand. Charged by Thums Up kept up the buzz for Coca-Cola during the 2023 edition of the Indian Premier League on Star Sports. Grover says Say Never will stand out for two reasons — the attractive price point and the cup delivery format, which the company has used with Gluco+. “The rapid growth in this energy segment in the recent past has come on the back of price disruption, and we feel that we can take that disruption forward,” he adds.

As energy drinks still operate in a niche segment with a premium play, an affordable price point can be a game-changer, say experts. “Affordability is a significant driver in India, especially for pre-teens, teens and college students,” says Devangshu Dutta, CEO, Third Eyesight. For many years energy drinks were treated as a niche premium opportunity, but the availability of lower price options has opened up the mass market as demonstrated by PepsiCo’s Sting in PET bottles with a much lower price point.

While the cola giants have an obvious advantage in terms of shelf space accessibility, given the market’s trajectory even smaller players stand a good chance to create a space for themselves. “Clarity in positioning, techniques to make the brand stand out, and ensuring availability with strong distribution and replenishment is imperative to get ahead,” Dutta suggests.

TCP plays in the energy space with Tata Gluco+, a glucose-based energy drink targeting a young consumer set; for Say Never the target is the youth between the ages of 18 and 35.

Besides pricing, what will be make or break is marketing muscle and a differentiated appeal, says Samit Sinha, managing partner, Alchemist Brand Consulting. “Say Never can position itself as a party-drink — akin to how Red Bull is equated with active lifestyles. There are enough opportunities to create nuanced differences in attributes, functional benefits and most of all, emotional benefits.”

NourishCo contributes 4% to the TCP overall business and in Q1 of FY23, its recorded a strong revenue growth of 60%. TCP’s flagship drink Tata Gluco+ registered a growth of 61% in the same period.

(Published in Financial Express)