The youngest entrant in the sauces, dressings and condiments space, Veeba is looking to catch up in the market going up against some stiff competition.
With a growing eating out culture and the well-travelled or aspiring Indian’s strong appetite (pun intended) for global cuisines, the trend of cooking unconventional, international dishes at home has taken off in some markets. Spurring this on are foods companies like the homegrown Veeba, which aspires to cater to such change in palates.
Veeba Food Services was launched in 2013 by Viraj Bahl, its founder and managing director. Veeba started off as a B2B company with offerings across sauces, dressings and dips developed to bring to the Indian consumer more global tastes, say, a harissa dressing or a tartare dip. It supplies to players like Domino’s, Pizza Hut, Dunkin Donuts, Burger King, KFC, Starbucks, etc.
As per Technopak’s Indian Food Services Industry Overview, the size of the Indian food services market in India (organised and unorganised) is projected to grow at a CAGR of 10% over the next five years to reach Rs 5,52,000 crore by 2022. Veeba entered the space pitched against players such as Dr Oetker (to which Bahl and family had sold Fun Foods to, back in 2008), Cremica, Kraft and Del Monte, among others.
The entry strategy was to first achieve traction and volume by the B2B route. The aim, however, always was to be a retail company. Eventually, 2015 was when Veeba chose to enter retail. Bahl shares that till about 10 months ago, B2B contributed to 90% of revenue. As it stands currently, B2B now brings in 60% of revenue, as the company has upped its push for B2C.
More recently, the brand rolled out its first mainstream campaign with the Aaj Kya Khaoge? proposition. The core target audience is 22-40 year-old women but with self-cooking becoming more of a lifestyle activity among urban males, the brand hopes to rope in that set of consumers too.
With a two-pronged agenda of pushing further into B2C while still retaining B2B, an 11-episode series titled Veeba Cook-Off was rolled out on FoodFood on January 26. A 60-episode series titled Veeba Aaj Kya Khaoge?, which sees five chefs present various dishes with each hosting 12 webisodes, was also rolled out on January 25. Plans to bring this property to TV eventually are also on the anvil.
With an obvious focus on tier I and metro cities, tier II is where the promise of growing the category lies, says Bahl. The company has recently doubled capacity at its manufacturing plant at Rajasthan, with around 3000 sq ft dedicated to research and development. For distribution, depots have been set up in almost every state, except for say, the North East region, where the depot in Assam is the base.
The problem of reach is currently being addressed by retailing online, as its products are available on Amazon, BigBasket, Paytm Mall, etc. Bahl believes, pre-Veeba, none of the incumbents had taken on the onus of growing the category.
“As a company, we do want to grow rapidly but we don’t want the category to remain the size it is,” Bahl notes. “To encourage trial and eventually adoption, we have launched pouches of mayonnaise.” The one weighing 875 gm is the value proposition and the smaller 100 gm trail unit (nicknamed among the 900 strong-Veeba team as Chotu) is priced at Rs 34. This is in addition to tasting opportunities crafted for consumers. Incidentally, the eggless mayonnaise variety brings in the most moolah for the company currently.
While it may seem like educating the tier II consumers about the category, Veeba believes the task is more about bringing specific tastes to consumers as the ground work has been done by the QSR players over the years by introducing various global cuisines. Dilip Radhakrishna, research analyst, Euromonitor International, attests to that, saying, “Products such as mayonnaise and salad dressings are already well-received. This is expected to continue as consumers are willing to experiment with different flavours and indulge in preparing dishes at home.” As per FICCI and Technopak’s Indian Food Services Industry: Engine for Economic Growth and Employment report, QSRs are second only to casual dining restaurants, where the latter are growing at a CAGR of 16% to reach Rs 1,05,500 crore in 2022, followed by QSRs at 15% to reach Rs 21,500 crore in 2022.
Growing B2C, emphasises Bahl, will not be at the cost of B2B even as it is looking to scale B2C at 30% y-o-y. Typically, for a brand that deals in products of slightly sophisticated or non-native tastes, to achieve traction at a faster rate, modern trade proves to be beneficial as elements such as packaging and chances to run an in-store tasting or promotion are higher. However, for Veeba currently, general trade works better, accounting for 70%.
Veeba dedicates 20% of its revenue towards communication with 80% going towards TV to achieve scale.