Indulge Beverages’ Bonhomia coffee and tea capsules cater to the fast-paced customers who prefer quality beverages on the go. Funded by Kanwaljit Singh, former senior MD of Helion Ventures and other angel investors, the company plans to launch up to 12 new blends by FY16KUNAL BHAGAT, CO-FOUNDER, INDULGE BEVERAGES
“One of the best pieces of advice we received from our investors was that we need to create an impact in the community without compromising on our team, because the success of a business doesn’t just depend on just the CEO, but also on the collaborative effort of the team,” recalls Kunal Bhagat, the co-founder of Indulge Beverages (Indulge), as we go back in time to trace the origins of this startup.
The company, which sells premium coffee and tea capsules under the brand name Bonhomia, was founded by Bhagat, Tuhin Jain and Rohit Gupta in January 2012. What’s interesting about this startup is that each of its founders comes from a different professional background bringing in to play the riches of diverse experiences. While Bhagat was an investment banker, Jain holds considerable experience in the FMCG sector (his earlier stint being in PepsiCo) and Gupta carries considerable operational experience (with his earlier stint being with Vodafone). Thus, when they founded Indulge Beverages, Bhagat managed external investments, Jain took charge of sales and marketing and Gupta worked at the factory floor. “Our entire go-to market strategy was relatively smooth largely because we had the right founding team in place,” adds Bhagat.
Indulge’s products which are packaged in the form of capsules are currently available in six different varieties; mild green tea, intense black tea, mild espresso coffee, strong espresso coffee and more. The capsules are produced out of a single manufacturing plant which holds a production capacity of 20 million capsules per annum and they are compatible with Nespresso machines that are available in India.
Treading new terrain
While each founder came with a diverse experience they were still faced with several unforeseen challenges at the early stage. For example, the company’s products witnessed considerable demand in Ghana and other Asian markets. However, shipping products to other countries required considerable paperwork and approvals, which the team didn’t factor in. “As entrepreneurs, we want to scale a business very quickly. But often our growth is curtailed due to incompatible regulations and prolonged approval processes,” points out Jain. A typical approval takes two to three months, within which the shelf life of a product may diminish considerably.
Despite these odds the team believes that the demand within the country itself makes up for the challenges faced in exporting to external markets. “We, as a country, are one of the leading producers and consumers of tea and coffee. Additionally, a lot of consumers today are willing to experiment with new brands in the market. This proves to be advantageous for us,” opines Bhagat. Currently, Bonhomia’s target consumers are the ones who can afford to pay a premium for quality coffee or tea. Its product range is currently offered at a price point of Rs. 50 per box of 10 capsules.
Bhagat has an interesting take on who Indulge views as competition. “In fact, we would view a Starbucks or Cafe Coffee Day as a demand enabler rather than as someone eating into our market share, because when consumers try our products at these outlets and like it, they might want to purchase more for regular consumption,” he explains.
Indulge has a two-fold approach to sales by operating in both the B2B and B2C space. Its product range is available in premium restaurants and hotel chains like Taj Group, Westin, Sheraton Group of Hotels, The Oberoi Group and at retail outlets such as Godrej Nature’s Basket and Foodhall, and ecommerce portals such as Bonhomia World (its own store powered by Shopify), Snapdeal and Fabmart. For now, Indulge’s retail presence is restricted to tier-1 cities such as New Delhi, Mumbai, Hyderabad, Bengaluru and Pune.
In April 2015, Indulge Beverages raised its first round of external funding to the tune of US $2 million from various investors such as Kanwaljit Singh (former senior managing director of Helion Venture Partners), Ashok Dhingra (former director of strategic initiatives at SAB Miller), Shripad Nadkarni (former marketing head of Coca Cola), Sarvesh Sahara (business head of the foods segment at Ruchi Soya), Apurva Salapuria (of the Salapuria Group) and more. “Our board of directors come with a vast experience in each segment. For example, Tuhin spends several hours a week with Mr. Sahara to design impactful branding and marketing strategies for our products. Additionally, as we scale the business, they advice us in time about potential roadblocks we are likely to face with each step we take,” explains Bhagat. He notes that the funds from the recent rounds are largely being channelised towards brand building and product development. “We are planning to launch up to 12 more blends this financial year and leverage our online and offline presence,” he adds.
With prior testing held at international markets such as France, Australia, Singapore and United Arab Emirates, the team is looking to expand outside of India and capitalise on the global market in the near future. “While the Indian Nespresso market size is Rs. 200 crore the global market size currently stands at U.S. $10 billion. Today, coffee is an affordable luxury and among the widely consumed beverages across the world. So why not look at the bigger picture?” states Bhagat, parting on a note of confidence.
Founders: Kunal Bhagat and Tuhin Jain
Concept: Manufacture and sell premium coffee and tea capsules under the brand name, Bonhomia
Investors: Kanwaljit Singh (former senior managing director of Helion Venture Partners), Ashok Dhingra (former director of strategic initiatives at SAB Miller), Shripad Nadkarni (former marketing head of Coca Cola), Sarvesh Sahara (business head of the foods segment at Ruchi Soya), Apurva Salapuria (of the Salapuria Group), and more.