While choosing the right energy drink, a person googles about various products including the amount of caffeine in drinks available in the market. But did you ever search for ingredients like lemon balm, rosehip, inulin, chamomile and centella asiatica? Sipwise Beverages will make you look for these words as it offers unique functional beverages made with such natural ingredients. All its beverages have a functional benefit around which the products are crafted and developed.
The company was initiated by Vadodara-based, Harish Mohan. He holds an engineering degree from the National Institute of Technology in Durgapur, West Bengal, and a management degree from the Indian School of Business, Hyderabad. With no prior experience in the FMCG industry, Mohan came up with his start up idea in 2013 after his observation of health drinks in the United States. In his interview with founderINDIA, Harish talks about his journey and the hardships involved in incorporating Sipwise Beverages.
Q. Tell us in brief about Sipwise Beverages and its range of products?
Sipwise Beverages was started in 2017 with a vision to be category creator in the growing domain of functional beverages. Our motto is to ‘nurture through nature’. We provide smarter choices as compared to existing alternatives in the market.
We have two brands- What If and 1947.
What If was created with an idea to offer natural ingredients like green tea and herbs in chilled form, with numerous health benefits. 1947 is a healthier energy drink as it has the right amount of caffeine which is 50 mg and is extracted from a natural source of tea. The founding team has a right mixture of technical and management expertise. The technical team is led by R & D engineers, who are well versed with the knowledge of natural ingredients and invent products out of tea based extracts. They have over 20 years of experience in the Food & Beverage segment. The management team brings in a detailed understanding of the beverage market and provides a unique approach to a novel product portfolio.
Currently, we are in 4 cities-Mumbai, Bangalore, Pune, and Goa. We have pan India association with Nature’s Basket, Hyper City, Star Bazaar, Big Basket and Grofers.
Q. What was the missing gap in the beverage industry that you identified & filled?
While I was at the Duke University as a part of the exchange program, I got exposed to a range of functional beverages. After witnessing a gap in the Indian market for beverages that could offer value beyond cola and fruit pulp based drinks, I thought of bringing the access of age-old herbs and natural ingredients to the Indian consumers at an affordable price. The beverage industry is looking at a slump in the existing categories as consumers are looking for healthier alternatives. I decided to pursue this idea further and in collaboration with the R & D team based out of South India, my dream for Sipwise Beverages was born.
Q. Define your first year of entrepreneurship. What were the major obstacles and important learnings in these initial 12 months?
From the inception, there have been challenges in getting the packaging right. We took a risk by opting for the triangular shaped bottle to differentiate ourselves on the retail shelf. That involved a series of trial and error procedures to get it right.
In addition, there were various regulatory hurdles in product clearance as we were using ingredients which have not been used in the beverages till now. Getting the product approved and out for production was the first hurdle. The next hurdle was to try and get the right people on board and get our distribution system in place. This is an ongoing challenge and we seek to address it in the best way possible. Learning is a continuous process for us and hopefully, we should be able to expand at the right pace while also retaining the right team.
Q. What’s your current customer base? How did you go about building it?
Seventy per cent of our current sales come from modern trade chains like Nature’s Basket, Star Bazaar, Big Basket and Grofers. Our customer base consists of the conscious indulgers, who are looking out for healthier alternatives while wanting to experiment with their taste palate. The process of identifying and targeting them was established after trying to understand their purchasing patterns and behaviour. This led us to narrow down the right outlets, which were a part of our distribution strategy during launch. This is why we approached an outlet like Nature’s Basket with our first pitch.
Q. What are the three most important and challenging business decisions for any start up entrepreneur?
Identifying the right market, establishing a clear differentiating factor that would give you an edge over the competition, and timing your entry into this market. Apart from these, we are always juggling between the decisions to find the right mix of capital infusion and quality talent at an affordable price.
Q. Explain your business model.
Our business model is pretty simple. At Sipwise Beverages, we believe in guilt-free refreshment. Any product that comes out of our stable is always a healthier alternative to the choices existing in the market.
Through our investment in promoters across all retail chains, we believe in consumer education where we try and make customers understand the benefits of our proprietary ingredients. This establishes our brand as a category creator and helps us to create a niche.
Q. Tell us about the funds that you’ve raised or looking to raise in the future.
We are funded through internal accruals from our parent company, Scientific Remedies, which is in the business of pet healthcare. We have not received any external funding till date. We plan to go for our first round of funding in early 2019.
Q.By when should you reach your breakeven? Or are you already profitable?
We reached the sales figure of Rs 1 crore in the first year of operation. We plan to reach around Rs 10 crore in the next three years in the Indian market.
Q. What are your plans for the next two years?
Our target is to be in all metro cities and the top 10 Tier-I cities in the next three years. We are investing in the R&D segment, either through our in-house lab at Trivandrum or by liaising with top quality departments to produce beverages in the field of cognition, mental health, diabetics, hangover cure, and sexual health. The foreseeable future involves us being a leader in the niche market that we have created for our existing categories and also for future products.
Q.How much do you value customer feedback, and how do you collect it?
We value customer feedback tremendously. We’re in an extremely competitive FMCG industry and consumer acceptance can either make or break entrants into the market. It is important to assess customer feedback, quickly adapt and make the necessary changes to survive and thrive in a rapidly expanding FMCG market.
Our on-field promoters and sales staff continuously assess feedback while interacting with our customers and provide us the valuable information that we need to iterate on the product development front.
Q. What does “Make In India” mean for you?
One of my idols is Mr. Rajiv Bajaj, the managing director at Bajaj Auto. In one of his talks, he has stressed that more than “Make In India”, it is important that we “Make for India”. I am happy to say that we follow both the principles. In the energy drink market, that is dominated by strong outside players, we are India’s entry, banking on our own homegrown products made with natural ingredients. We source ingredients from abroad to provide nothing but the best for today’s evolving Indian consumers.
Q. What suggestion would you have for your 10-year younger self?
Learn to be more patient. Learn to cultivate the art of weathering storms and know that everything will pass. Focus on the process and stay humble.
Q. What kept you going during a difficult business phase?
There was a period in my brief entrepreneurial phase where we were stuck due to lack of product approvals and proper regulatory policies. With a lot of money already invested in the product development stage, we were not sure if the product will eventually make it to the markets. During these times, it was important to be patient. I know a lot of stress is laid on the value of persistence, but entrepreneurs must be patient as well. Every entrepreneur goes through difficult times.
- Best leisure time activity: Yoga, Squash, Hiking
- Your Role model: Rajiv Bajaj & M.S Dhoni
- A must-read book on entrepreneurship: Zero to One by Peter Thiel for the insights. I would also put Meditations by Marcus Aurelius on the list to develop the mental fortitude
- A must-watch movie for every entrepreneur: Rocket Singh, Moneyball
- One hilarious moment at work when you’d just started off: I often joke that an entrepreneur’s job is to straddle multiple worlds at a single time. One moment, you are sitting with the creative heads of an agency, thinking of subconscious ways of reaching out to your target consumer, the next moment you are in multiple calls trying to make sure that your goods are reaching the distributors on time. Each moment of the journey is filled with humour and exhilarating highs!