Growing business

With a packet full of tangy flavours, these made-in-India chips and savouries are taking on MNCs

Prataap Snacks has come a long way from the narrow bylanes of Indore.

What began as a small-town venture has now evolved into India’s fifth-largest salty snack maker in terms of market share, according to data from Euromonitor. Some of its most popular products come under its Yellow Diamond brand: potato chips, the Motu Patlu rings, and tangy snack Chulbule.

Loyal customers have helped turn Prataap into a national snacking brand and a name to reckon with in India’s Rs 19,000-crore salty snack market. The company clocked a turnover of Rs757 crore and a profit of Rs 20.8 crore for the year ended March 31, 2016. The icing came when in 2016, Bollywood star Salman Khan agreed to endorse its chips.

But just like its spicy snacks, there is never enough.

Prataap Snacks’ has even bigger plans: an initial public offering that could raise up to Rs500 crore, helping it step up the game in a market traditionally dominated by foreign firms.

Not bad for a company that started out with 40-year-old equipment.

Savoury success

The story of Prataap Snacks began under the name of Prakash Snacks, and with a packet of cheese balls.

By 2003, Indore-based engineering graduate Amit Kumat had learnt the tricks of the trade in the four years he worked for packaged-food company Vardhaman Snacks. Key among the lessons he learnt was to manage a wide distribution and wholesale network.

When Vardhaman shut shop, Kumat decided to enter the fray. He roped in his brother, Apoorva, and their school friend Arvind Mehta who brought in the initial funds of Rs 15 lakh.

Prakash Snacks began functioning out of a tiny 10X10 office in Indore’s Navlakha locality in 2003. Looking to replicate the success of the Peppy brand of cheese balls popular in western India, the trio decided to launch its own version and called it Glow Fun. They focused on North and South India, though, where Peppy had limited presence.

Initially, Prakash outsourced production to local contract manufacturers but built a strong distribution network quickly. In the first year, it sold Rs 22 lakh worth of Glow Fun cheese balls in Indore and beyond.

“It is then that we realised that there was potential; we should do something bigger,” 47-year-old Kumat, now the managing director and CEO of Prataap Snacks, told Quartz.

Left to right: Arvind Mehta, Apoorva Kumat, and Amit Kumat.  (Prataap Snacks.)
Left to right: Arvind Mehta, Apoorva Kumat, and Amit Kumat. (Prataap Snacks.)

The team then decided to take on India’s massive potato chips market, created and dominated by food and beverage giant PepsiCo India through its flagship brands, Lay’s. So, two years after being founded, Prakash bought its first piece of equipment: a 40-year-old production line for Rs60 lakh in 2005.

“People thought we (had) bought junk,” Kumat recalls, “They told us it will never work.”

But the trio had its own secret mix of masala, created by a team of employees and family members right in Kumat’s kitchen, to make it all work. So, the Yellow Diamond brand of potato chips was launched in 2005. It gradually added more sub-brands like Chulbule, similar to PepsiCo’s Kurkure, and corn rings.

A brand for the masses

By 2010, Prakash Snacks was the go-to brand among the masses across West and North India, thanks to smart pricing.

The company sells 24 variants of snacks, all priced in the same range as the competition. However, Prakash offers 20-30% more of the snack for the same price. So, the Rs 5 packet of Chulbule weighs 28 gram, while other brands in the category only offer 22 gram. That made a big difference in the value-conscious markets of small town India. These Rs 5 packets now contribute over 80% to the company’s turnover.

Kumat says Prataap Snacks follows a bottom-up strategy, targeting small households in small markets.

“When we start a city, we start with a B-class place,” Kumat explained. “For instance, you will find us everywhere in a place like Najafgarh, (a suburb on the south-westernern outskirts of Delhi and home to a semi-urban and rural population).”

Industry experts say small-town brands that focus on the low-to-middle income population are typically led by strong distribution in local markets. “Local brands achieve 80% of their success from the fact that they have strong micro-market distribution and offer better value as opposed to large national brands,” said Shripad Nadkarni, a marketing veteran and former founder of MarketGate consultancy who is now investing in food start-ups. “The rest is a combination of taste and branding.”

By 2011, the company’s turnover had reached Rs 150 crore. Today, it has a close to 5% share of the salty snacks market, Euromonitor data shows. While it pales before PepsiCo’s 49.9%, the company has managed this without splurging on marketing and advertising.

However, as demand soared, the company’s limited capacity resulted in a supply lag.

Enter Sequoia

Mid-tier packaged food firms in India are expected to grow twice as fast as their multinational rivals by 2020, a 2014 report by credit rating firm Crisil shows. So it wasn’t surprising that Sequoia India, managing a venture capital fund of $920 million in the country, smelled an opportunity in Prakash.

In 2011, Sequoia invested $30 million in the company for an undisclosed stake, dubbing it an effort to help small-town brands achieve national prominence. “Our focus at Sequoia is all about the Indian domestic market, and such businesses are coming from non-metro areas,” VT Bharadwaj, MD at Sequoia, said then. The company declined to comment for the story.

The funding helped Prakash Snacks ramp up its distribution network, especially in India’s northeast, a region that companies and their brands usually don’t focus on due to its distance from mainland India. Kumat and his team took a calculated risk to scale up quickly in the market with a manufacturing facility in Guwahati. Today, it has three plants, one in Indore and two in Guwahati, Assam, and works with contract manufacturers in Bengaluru and Kolkata.

Following Sequoia’s entry, a separate entity, Prataap Snacks, was established by Prakash’s founder. Prataap then went on to acquire Prakash Snacks in 2012.

It was also 2012 that Prataap added a new product to its portfolio, the corn-based Motu-Patlu Rings, which is now the company’s fastest-growing brand, benefiting from a franchise agreement with a Nickelodeon show of the same name. The packet also carries miniatures of the two cartoon characters – Motu and Patlu – making Prataap India’s largest buyer of toys, too.

The partnership has helped boost the Motu-Patlu brand franchise and helped Prataap drive sales while facilitating a deeper engagement with kids, Nina Elavia Jaipuria of Viacom18 told Quartz. Jaipuria is business head, kids entertainment, at Viacom18, which owns Nickelodeon. Last year Prataap even sponsored the Nickelodeon Kids Choice Awards, reflecting its strong market among kids.

The company is now shifting gears, adding larger pack sizes and clutching deals with large supermarket chains previously considered too premium for the brand.

Spend money, make money

In 2016, Prataap Snacks finally decided the time was right to invest big in advertising. It spent Rs 24 crore on marketing, focusing on kids’ and general entertainment channels and tied up with Salman Khan for its “Dildaar Hai Hum” campaign. These ads are designed by advertising agency Lowe Lintas and attempt to take on bigger rivals like PepsiCo’s Lay’s and Kurkure and ITC’s Bingo.

“Everyone was eating Yellow Diamond, but people were not talking about it,” Kumat said. “The ads should make customers feel proud and part of the brand,”

The company has also clinched a deal with the Reliance Retail’s supermarket stores, marking its entry onto supermarket shelves after years of being sold primarily through small shops in tiny streets.

However, it won’t be easy fighting the behemoths in larger cities, Nadkarni said. “When smaller brands grow and expand to larger markets, that is when they meet the giants who have a much bigger distribution and bargaining power with shopkeepers.” Costs rise, too, as they expand their distribution, adds Nadkarni.

Nevertheless, this is only the beginning for the founding trio which is now charting a major expansion into confectionaries.

Kumat, whose favorite packet of chips is the Teekha Tadaka-Chulbule never thought a packet of chips would make him so popular, but he’s ready for more. “When we sold products worth Rs 100 crore we thought that would be the upper limit, but now we are wondering when Rs 2,000 crore will happen,” he said.

This article first appeared on Quartz.

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Swara Bhasker: Sharp objects has to be on the radar of every woman who is tired of being “nice”

The actress weighs in on what she loves about the show.

This article has been written by award-winning actor Swara Bhasker.

All women growing up in India, South Asia, or anywhere in the world frankly; will remember in some form or the other that gentle girlhood admonishing, “Nice girls don’t do that.” I kept recalling that gently reasoned reproach as I watched Sharp Objects (you can catch it on Hotstar Premium). Adapted from the author of Gone Girl, Gillian Flynn’s debut novel Sharp Objects has been directed by Jean-Marc Vallée, who has my heart since he gave us Big Little Lies. It stars the multiple-Oscar nominee Amy Adams, who delivers a searing performance as Camille Preaker; and Patricia Clarkson, who is magnetic as the dominating and dark Adora Crellin. As an actress myself, it felt great to watch a show driven by its female performers.

The series is woven around a troubled, alcohol-dependent, self-harming, female journalist Camille (single and in her thirties incidentally) who returns to the small town of her birth and childhood, Wind Gap, Missouri, to report on two similarly gruesome murders of teenage girls. While the series is a murder mystery, it equally delves into the psychology, not just of the principal characters, but also of the town, and thus a culture as a whole.

There is a lot that impresses in Sharp Objects — the manner in which the storytelling gently unwraps a plot that is dark, disturbing and shocking, the stellar and crafty control that Jean-Marc Vallée exercises on his narrative, the cinematography that is fluid and still manages to suggest that something sinister lurks within Wind Gap, the editing which keeps this narrative languid yet sharp and consistently evokes a haunting sensation.

Sharp Objects is also liberating (apart from its positive performance on Bechdel parameters) as content — for female actors and for audiences in giving us female centric and female driven shows that do not bear the burden of providing either role-models or even uplifting messages. 

Instead, it presents a world where women are dangerous and dysfunctional but very real — a world where women are neither pure victims, nor pure aggressors. A world where they occupy the grey areas, complex and contradictory as agents in a power play, in which they control some reigns too.

But to me personally, and perhaps to many young women viewers across the world, what makes Sharp Objects particularly impactful, perhaps almost poignant, is the manner in which it unravels the whole idea, the culture, the entire psychology of that childhood admonishment “Nice girls don’t do that.” Sharp Objects explores the sinister and dark possibilities of what the corollary of that thinking could be.

“Nice girls don’t do that.”

“Who does?”

“Bad girls.”

“So I’m a bad girl.”

“You shouldn’t be a bad girl.”

“Why not?”

“Bad girls get in trouble.”

“What trouble? What happens to bad girls?”

“Bad things.”

“What bad things?”

“Very bad things.”

“How bad?”

“Terrible!!!”

“Like what?”

“Like….”

A point the show makes early on is that both the victims of the introductory brutal murders were not your typically nice girly-girls. Camille, the traumatised protagonist carrying a burden from her past was herself not a nice girl. Amma, her deceptive half-sister manipulates the nice girl act to defy her controlling mother. But perhaps the most incisive critique on the whole ‘Be a nice girl’ culture, in fact the whole ‘nice’ culture — nice folks, nice manners, nice homes, nice towns — comes in the form of Adora’s character and the manner in which beneath the whole veneer of nice, a whole town is complicit in damning secrets and not-so-nice acts. At one point early on in the show, Adora tells her firstborn Camille, with whom she has a strained relationship (to put it mildly), “I just want things to be nice with us but maybe I don’t know how..” Interestingly it is this very notion of ‘nice’ that becomes the most oppressive and deceptive experience of young Camille, and later Amma’s growing years.

This ‘Culture of Nice’ is in fact the pervasive ‘Culture of Silence’ that women all over the world, particularly in India, are all too familiar with. 

It takes different forms, but always towards the same goal — to silence the not-so-nice details of what the experiences; sometimes intimate experiences of women might be. This Culture of Silence is propagated from the child’s earliest experience of being parented by society in general. Amongst the values that girls receive in our early years — apart from those of being obedient, dutiful, respectful, homely — we also receive the twin headed Chimera in the form of shame and guilt.

“Have some shame!”

“Oh for shame!”

“Shameless!”

“Shameful!”

“Ashamed.”

“Do not bring shame upon…”

Different phrases in different languages, but always with the same implication. Shameful things happen to girls who are not nice and that brings ‘shame’ on the family or everyone associated with the girl. And nice folks do not talk about these things. Nice folks go on as if nothing has happened.

It is this culture of silence that women across the world today, are calling out in many different ways. Whether it is the #MeToo movement or a show like Sharp Objects; or on a lighter and happier note, even a film like Veere Di Wedding punctures this culture of silence, quite simply by refusing to be silenced and saying the not-nice things, or depicting the so called ‘unspeakable’ things that could happen to girls. By talking about the unspeakable, you rob it of the power to shame you; you disallow the ‘Culture of Nice’ to erase your experience. You stand up for yourself and you build your own identity.

And this to me is the most liberating aspect of being an actor, and even just a girl at a time when shows like Sharp Objects and Big Little Lies (another great show on Hotstar Premium), and films like Veere Di Wedding and Anaarkali Of Aarah are being made.

The next time I hear someone say, “Nice girls don’t do that!”, I know what I’m going to say — I don’t give a shit about nice. I’m just a girl! And that’s okay!

Swara is a an award winning actor of the Hindi film industry. Her last few films, including Veere Di Wedding, Anaarkali of Aaraah and Nil Battey Sannata have earned her both critical and commercial success. Swara is an occasional writer of articles and opinion pieces. The occasions are frequent :).

Watch the trailer of Sharp Objects here:

Play

This article was published by the Scroll marketing team with Swara Bhasker on behalf of Hotstar Premium and not by the Scroll editorial team.