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INTERVIEW

“People moving towards experiences. Cooking at home will be a big part”
Monday, 20 April, 2020, 08 : 00 AM [IST]
Habanero Foods helps people ‘Cook like a chef’ at home. The company manufactures sauces (peri-peri, spicy barbeque sauce, hot sauce, sriracha and spicy pasta sauce), salsa and dips, and wraps for the B2C and B2B market, offering premium import quality products at affordable prices. The products are full flavoured, vegan and gluten-free, helping consumers make a healthy yet flavoursome choice, Griffith David, who in spite of an IT industry background was inspired to venture into the food industry in the country, tells Nandita Vijay in an email interview about his company and more. Excerpts:

Why did you decide to switch from the restaurant business to sauces, salsa and wraps?
I used to work with Intel and Yahoo earlier, managing teams and business units across Asia, Europe, and North America. My professional engagements demanded lot of travel abroad. In fact, I ended up living in countries like the US, Finland, Dubai and Singapore for several years. During these stints I was exposed to and began enjoying various kinds of cuisines across cultures. I made up my mind that I wanted to venture into the food industry.

In 2012, I set up an authentic Mexican cuisine restaurant called Habanero in Bangalore. The restaurant won several awards and was extremely popular for its authentic tasting food and good service. Customers would always request for in-house salsa, dips, and wraps to take away. This sparked the idea of venturing into the retail business. So in 2018, I decided to pivot the business towards retail. The retail business offers a range of sauces, salsa and wraps available across the country - online and offline.

How did the company diversify into different product categories?
Having introduced Bangalore to authentic Mexican cuisine with the Habanero restaurant, we saw that this was something people enjoyed but could not find ingredients to make at home. Habanero’s retail business started with salsa and tortillas; we then added the sauces (spicy barbeque sauce, peri-peri sauce, hot sauce spicy pasta sauce and sriracha sauce) to the portfolio.

For us, the decision of which product categories to add to our portfolio is research driven. It involves: analysing which are the fast-moving products in the import category food groups.

Looking at the prevailing price points for imported and Indian goods, there is a clear gap in the pricing between these two segments, and that is the spot we want to be in.

Understanding the sweet spot in terms of pricing that consumers are comfortable paying. Someone buying a very economically priced brand is willing to pay a bit more to get a good quality product.

We then arrive at a possible pricing for our products, and determine if this works for both us which is from a margin perspective and for the customer (in terms of the quality he/she gets).
 
And after this, we work on creating a premium product that we can offer to consumers at an affordable price.
We offer premium import quality products at affordable prices – so people can enjoy international cuisine at home. Our products are available both online and offline, so it’s easy for everyone to purchase. And we are focussed on health – our products are vegan and gluten-free.

There is a spurt in the gourmet food category and foreign players are entering the Indian market more than ever before. This product is pricey.

at Habanero, we source our ingredients locally, and manufacture the products in Bangalore. Therefore, we can provide authentic tasting products at very affordable prices.

What were the reasons to opt for Bangalore to start the business?
When I moved back to India I moved to Bangalore. When I established the Habanero restaurant in 2012, Bangalore had a very cosmopolitan culture with consumers who were willing to experiment with international cuisine. And therefore, when I decided to pivot the business towards retail, Bangalore was the natural choice.

Currently, Habanero products are available across approximately 500 modern and general store formats in Bangalore, Chennai and Hyderabad. These products are also available online on Big Basket, Amazon and on our ecommerce site at www.habanero.in.

What is the business' turnover for last year? How many employees?
Last year, the company touched Rs1.5 crore in revenue, with 30 employees. Despite adverse economic conditions, the business expanded at 60% over the last one year.
We see an opportunity for us in the near future as people will move towards creating experiences at home. Cooking at home will be a big part of this.

Which of the products are most sought after?
This is slightly difference in the HoReCa (Hotel/Restaurant/Café) versus the B2C segment. In the B2B segment, tortillas and nachos move fast as it helps the team save time in making this from scratch. And in the B2C segment, the pasta sauce and tortillas are a hit. It helps people save time in the kitchen and yet, make great tasting food.

How would you describe the current scene for your industry? What are the visible trends?
The Indian condiments market stood at $638.96 million in 2018 and is projected to grow at a CAGR of over 13%, to reach $1,340.5 million by 2024. Increasing cross-cultural interaction, inclination towards consumption of Western food & cuisines and growing number of modern retail outlets offering price and convenience
 advantages to the customers is fuelling market growth.

Additionally, increased consumer demand for specific food choices as well as focus on R&D activities in the food industry has inspired innovation in products such as sugar-free and gluten-free condiments. The two most significant trends emerging rapidly in the Indian food market are: The expansion of imported food categories and products (40% growth rate); The incremental popularity of the gourmet food market amongst Indian consumers (CAGR 25%).
 
And therefore, we are focussed on catering to this growing consumer set by providing international quality products at affordable prices.
We also see an opportunity for us soon. The economy will witness a bit of a slowdown in the near future, and people will move towards creating more experiences at home. Cooking at home will be a big part of this, where consumers will crave authentic tasting international cuisine at home. This will be a positive step for our business.

What are the challenges sighted in this space?
The current economic conditions will post a challenging situation. We expect an increase in import costs. Also, in the near term, people will refrain from making too many purchases.

However, as mentioned earlier, people will be at home a lot more, and cooking will become a huge part of this time. So, we expect to scale up, especially on ecommerce.

What is the USP of the products?
Our USP is the full flavoured products that we make. For example look at our spicy pasta sauce – there is the spice aspect we added to it that makes us different from anything else in the market. Our hot sauce, peri-peri, spicy barbecue – all have a unique flavour to it that the consumer is seeking but is not finding elsewhere. And we offer premium import quality products at affordable prices.

Lastly, our sauces and salsa are vegan and gluten-free. So very healthy as well!

Who are the competitors? How is the company staying ahead of them?
We compete with anyone operating in the same space as us – Indian or international. As a consumer, one will look for different options in sauces and condiments. And a large part of the consumer set is price-conscious, while seeking the right flavour profile. Where we stand out is the flavour profile – sriracha, peri-peri, spicy barbecue, hot sauce, tomato salsa etc. And the other point is the price at which we are providing these products. So authentic tasting world class products at very affordable prices – in India.

What are the future plans for the company?
We are looking to broaden our offline footprint in the country. So we will be entering new geographies. We are also exploring foreign markets.

We are focussed on strengthening the product portfolio over the next couple of years. With the growing desire of people wanting to lead a healthier lifestyle, we are looking to add wholesome, flavourful salad dressings.

We are also looking at making a wider range of tortillas and wraps.
From a business standpoint, we are looking to raise funds to fuel growth, and are in talks with several VCs for this.
 
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