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INTERVIEW

“We could explore possibility of external funding”
Monday, 08 April, 2024, 08 : 00 AM [IST]
The Organic World (TOW), part of the Bengaluru-based Nimida Group, is India’s largest chain of organic and natural grocery stores. It enables easy access to healthier, chemical-free food and lifestyle choices. The focus has been to provide a range of better choices, a product assortment that meets the everyday and monthly needs of an average Indian family. Indian retail industry is one of the most competitive industries in the world and the only way to thrive in this space is constant innovation, said Gaurav Manchanda, founder and director, Nimida Group, to Nandita Vijayasimha in an email interaction. Excerpts:

How would you describe India’s food retail scene? What are the visible trends?
India’s food retail scene reflects a dynamic landscape with several noteworthy trends. Firstly, there is a growing demand for organic and natural products, indicating a shift towards healthier food choices. Secondly, the market is shaped by regional diversity, with strong preferences for traditional and local products, necessitating adaptation to regional tastes for success. Thirdly, the e-commerce boom has transformed the industry, with a constantly increasing number of consumers opting for online grocery shopping. Another notable trend that we are seeing is the move towards sustainability, with Indian consumers valuing businesses that adopt eco-friendly practices.

Over the last few years, health and wellness have increasingly become top priorities for Indian consumers, leading to more informed and better food choices. There is also a growing emphasis on consumer education regarding the impacts of our food choices on the people and the planet. At TOW, we believe that responsible retailing – a business approach wherein we prioritise our responsibility to the people and planet – is the key to unlocking and sustaining holistic business growth.  

What are the challenges encountered in this space by retail business ventures?
The retail industry in India is one of the most competitive industries in the world and the only way to thrive in this space is constant innovation. Brands need to create unique value propositions and capture consumer attention. Innovative product offerings are essential for businesses to remain competitive in this vibrant market.

In terms of challenges, there are numerous factors that shape the industry landscape. For starters, supply chain disruptions pose a significant hurdle, affecting product availability and distribution. Given the fragmented nature of the supply chain, and the reliance on specific weather and growing conditions, ensuring a consistent supply of high-quality organic and natural foods is no mean task!

Add to that, the tough balancing act between cost-effectiveness and product quality. The diverse and price-sensitive market in India presents unique challenges in offering quality products while maintaining affordability. Another concern is implementing sustainable practices, which align with operational efficiency and cost considerations.

Adapting swiftly to changing consumer preferences and trends is essential in this dynamic environment. While embracing technological advancements, including e-commerce and digital marketing, is imperative, it can be daunting, particularly for traditional businesses.

Similarly, navigating the intricate web of regulatory compliance in the food and retail sector continues to be a persistent challenge, requiring continuous monitoring and adaptation. Lastly, talent acquisition and retention, particularly in specialised areas like organic and natural groceries, present ongoing challenges in sourcing and retaining skilled staff.

What are your views on organic products and its pricing?
Indian markets have traditionally been value-driven and price-sensitive. However, with the growth in demand for organic foods, we are seeing a perceptible shift in terms of consumer awareness and product pricing.

The fact of the matter is that limited supply or small-batch production, which is typical of organic farming, only marginally increases the cost of production. As long as food brands source locally-grown foods, and seasonal produce, which are high on nutrient value, and low on logistics and cold storage costs, organic foods can be reasonably priced.

We believe that consumers also have an important role to play in making organic foods more affordable and accessible. Choose traditional, local, and seasonal foods, grow the organic way, and shop from responsible retailers.

How has your company fared so far since the launch of your pilot store in JP Nagar, Bengaluru  in 2017? What are the growth plans envisaged going forward?
As India’s largest retailer for organic and natural groceries, we have experienced significant growth and success. Currently, we have 17 stores across Bengaluru, and we offer over 2,000+ products in the food, grocery, personal care and home care range, free of harmful chemicals.

We plan to expand our footprint across South India through the franchise model. By the end of 2025, we envision reaching a milestone of 100 stores.

How receptive are consumers to your outlets going by the competition in this space?
The steady growth of TOW’s brick-and-mortar stores bears testament to the remarkable customer love and loyalty that the brand has earned over the years. Despite the competitive nature of this retail space, we have managed to carve a niche as responsible retailers, who are 100% transparent with customers, and weigh their best interests over short-term financial returns and growth.

As India’s leading responsible retailer, we strive for authenticity, accessibility and affordability. And our consumers appreciate that! Our industry-first “Not in Our Aisle List”, which emphasises our commitment to providing products free from harmful chemicals and additives, has resonated strongly with consumers.

Our consumers are also vocal about supporting our efforts to source from local farmers and artisans, empowering them economically and promoting fair trade. We source fruits & vegetables only from certified organic farms and suppliers who follow sustainable agricultural practices. We support and empower SMES & women entrepreneurs whose vision aligns with ours, and provide them with the strongest and widest possible platform to compete with the big-box retailers.

The company has created a strict ‘Not In Our Aisle’ list… please elaborate and how has it helped the company sales?
Our “Not In Our Aisle List” is a definitive and hard stand we have taken to give our customers the confidence that every product on our shelves is a better, chemical-free choice for them. The list covers 25 chemicals and ingredients such as high fructose corn syrup, artificial colours, artificial flavours, parabens, phthalates and SLS/SLES. It has been instrumental in creating our brand identity.

By offering a range of products that adhere strictly to our “Not In Our Aisle List”, we provide customers with better choices that are free from harmful chemicals and additives. This approach has not only inspired more trust in our customers, but has also set us apart from the cluttered market of conventional grocery stores. The No List has become a symbol of our commitment to quality and transparency, enhancing our brand credibility significantly. This differentiation, in the long run, has contributed to increased sales and customer loyalty. Our consumers feel more empowered to lead a lifestyle free of harmful chemicals.

Which are your fastest growing products?
We offer the largest collection of chemical-free and preservative-free products under one roof – over 2,000 groceries, free of harmful chemicals. Among these, organic fruits and vegetables remain our top-selling category, indicating a strong demand for fresh, pesticide-free produce. Healthy snacks have also seen a significant rise in popularity, catering to the demand for convenient yet nutritious options. Furthermore, we are witnessing a growing interest in health and wellness essentials, such as supplements and natural remedies. We have recently expanded our vegan range as there is a niche but prominent category that is asking for such products.

So far you have 17 stores across Bengaluru, which are the stores showing positive growth? The company is exploring the franchise model and the plan is to steadily expand the brand’s footprint across Karnataka, share details.
All our stores represent our inclusive growth and profitability. As we grow the brand’s footprint across Karnataka and aim to launch 100 stores by the end of 2025, the franchise model offers a win-win strategy for us and our partners. With an investment of Rs 15 lakh and space availability of 300-500 square feet, potential franchisees are promised an assured, healthy return on investment in less than two years.

What sets our franchise model apart is the absence of royalty fees. Additionally, we offer perks, such as free transportation, assistance in staff hiring and training, and comprehensive marketing support. With a strategic approach, powered by strong collaboration, we are committed to creating an ecosystem that benefits all participants – consumers, farmers, partners, communities, and the environment.

What are the funding efforts made for expansion? How receptive are PEs and VCs to this food retail store model?
Currently, we are self-funded. As we grow, we could explore the possibility of external funding.
 
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