Gurugram based D2C FMCG brand, Mitra has strategically forayed into the mustard oil market and has been seeing an impressive growth with the oil portfolio. “Mustard oil is doing extremely well for us, particularly because mustard is in season. The demand is really high, especially among our target demographics,” said Abhishek Kaushik, Founder and CEO of Mitra.
In an exclusive conversation with Snackfax, Kaushik delved into the company’s growth trajectory in the food market. Kaushik shared insights on the company’s journey, the critical role of fundraising, and future plans, including an upcoming expansion into the spices market.
Founded in January 2023, Mitra has swiftly positioned itself as a formidable player in the FMCG sector. Reflecting on the past year, Kaushik expressed his enthusiasm for the company’s progress. “Last year, we started in January, and it was an incredible journey for us. What we expected in our P&L and what happened in the market were vastly different; we received a response 2-3 times greater than anticipated,” he shared.
Mitra’s mustard oil venture has proven particularly successful. “Mustard oil is used three times per day, from breakfast to dinner, representing a significant market opportunity. While there is considerable untapped potential, the presence of adulterated products is a challenge we are addressing,” he explained.
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Mitra started white labeling mustard oil last September, and quickly realized the vast market potential, selling around 20,000 liters per month. This success led the brand to open their own plant. The company’s transition from trading to manufacturing has significantly enhanced their margins and control over product quality. “Our gross margin nearly grew by 2.5 times when we inaugurated our own plant,” he added.
Currently, with the manufacturing of mustard oil, Mitra expects monthly sales of mustard oil to reach INR 1.5 to 2 crores. “With the upcoming season, especially post-monsoon, we anticipate a surge in demand. We are confident in delivering a monthly recurring revenue (MRR) close to INR 3 crores, with mustard oil potentially accounting for this amount on its own,” he said.
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On the other hand, fundraising has been a critical component of Mitra’s growth strategy. The company raised approximately INR 5 crores at a INR 35 crore valuation, with investments from platforms like Best Vantage Investments, Beach Network and Southern Unicorns. This capital has been instrumental in scaling operations and preparing for future growth. “We are planning to take our numbers to 3x this year, aiming for INR 35 to INR 40 crores,” Kaushik noted.
Mitra clocked over INR 30 crore in revenue last year, with flour being their best-selling product.
With a firm foothold in the Delhi-NCR region, which accounts for 65% of their revenue, Mitra is expanding its reach. The establishment of two manufacturing plants in Mathura has bolstered their production capacity, enabling them to meet increasing demand. “We now have a flour plant with a 600-ton capacity and an oil plant capable of producing 3 lakh liters per month,” said Kaushik.
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Besides, Mathura, the FMCG brand is also focusing on Ayodhya. “We see a tremendous opportunity in this region which extends from Noida along the Mumbai Expressway to Ayodhya, covering a distance of 357 kilometers. Our core strategy has always been to target tier 2 and tier 3 markets, where we see substantial market gaps and opportunities for growth. This focus has proven to be highly effective for us,” he said.
Mitra’s next big move is entering the spices market, a sector currently under scrutiny due to quality concerns with major brands. “We are setting up a spice plant, which should be operational within the next quarter. We will start with raw and powdered spices,” Kaushik revealed. This expansion aligns with Mitra’s core strategy of focusing on essential commodities. “Our aim is to deal with essential products like flour, oil, pulses, rice, and spices,” he added.
Operating in the volatile commodity market presents its own set of challenges. “Commodity prices, particularly for mustard, can be extremely volatile. It’s crucial to maintain our gross margins, regardless of price fluctuations,” Kaushik explained. The company’s strategy involves balancing affordability with premium packaging to attract a broad customer base without compromising on quality. “Premiumization of our products has been a key USP for us, and we intend to maintain this approach,” he stated.
As Mitra prepares for the festive season, the company anticipates a significant uptick in demand. “The festive season is a crucial period for FMCG businesses. We expect our revenue to increase 2-3 times during this period,” Kaushik predicted. With plans to utilize their full plant capacities and introduce new products, Mitra is well-positioned for sustained growth.
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