This year the company plans to spend about 70% of its budget on the digital mediums
Naturals Ice Cream, which has operated only out of its exclusive brand outlets so far, is changing its retail strategy to boost sales. Siddhant Kamath, in a conversation with Devika Singh, talks about forging tie-ups with modern and general trade stores, increasing marketing spends, and making up for lost revenue.
The lockdown impacted your peak consumption season. How do you plan to bounce back?
About 50% of our revenue comes in during the summer time, which has been wiped off this year. Our aim now is to achieve at least half of the revenue we earned last year. We have been operational through select stores and online aggregators since mid-June and the response has been good. We had been witnessing good sales through food aggregators even before the lockdown, and now 70-80% of that business has returned. We have 130 stores, out of which, 104 are operational currently. Offline, we are doing 40-50% of the business, as compared to the same period last year. We have not opened a few stores as they are either in containment zones or malls.
We are only selling family packs at the moment, and avoiding scoops, to limit human contact as much as possible. We plan to launch innovative packs going ahead, as we anticipate that home consumption of ice-cream will go up. So far, we have retailed only out of our exclusive parlours, but are now thinking about tying up with modern trade and general trade stores.
Are tie-ups with hyper-local delivery players on the cards?
We are keeping an eye on sales at the moment, and will take some strategic decisions soon. We have plans to partner with companies that offer last-mile delivery such as Dunzo. Also, some of our stores offered delivery before, but now we are working on a solution under which all our stores will deliver through their own fleet. We will soon introduce a web link for deliveries on our website.
Given the cash crunch, are you offering any payment plans to your franchisees?
We have 115 franchisee-operated stores, and out of this, 90 are operational currently. We have worked out a very flexible payment plan, in a way that they have cash flow and can pay rents, salaries, etc, on time. We have offered them extended credits. We are also negotiating rents with our landlords, but we understand that it is a dire situation for everyone. We are being transparent about our revenue with them, and, hopefully, we will reach some sort of agreement with them soon. The focus is to create a win-win situation for everyone.
With consumers becoming more health and hygiene conscious, how are you assuring them about the safety of your products?
We have usually relied on word-of-mouth for marketing. Traditionally, about 5% of our revenue goes towards marketing. However, this year, we plan to double the marketing expenditure. Earlier, we would split our marketing budget equally between digital media and other channels; this year, we plan to spend about 70% of our budget on digital. We are producing videos and engaging with influencers to assure consumers about the safety of our products, stores and manufacturing facility.
Will you be launching immunity-boosting variants, as is the trend currently?
Our products are made with only three ingredients — milk, sugar and fruits. It is well known that fruits and milk boost immunity. We are natural, and don’t add any preservatives. The shelf life of our products is only 15 days, and hence we don’t feel the need to roll out any new products. We may bring back our ginger-honey range, but we will stick to our core offerings. We have pushed our plans to launch dairy-free and sugar-free products to Diwali time.
Has the plan to double your store count by 2024 been put on hold?
No. We may delay the launch of a few stores, but we plan to open 250 stores by 2024. This year, we plan to open five new stores. Region-wise, our focus is going to be North — 60% of our new stores will be launched in this region. However, we also plan to launch a store in Chennai by the next financial year, as it is the only metro city where we are not present.