Hector Beverages, the company behind the popular beverage brand Paper Boat, experienced a 71% increase in its net loss, reaching INR 90.6 Crores during the financial year 2022-23 (FY23). This contrasted with the INR 53 Crores net loss recorded in FY22, primarily attributable to increased cash burn.
Despite a 56% increase in revenue from operations, reaching INR 504 Crores in the fiscal year under review from INR 324 Crores in FY22, the startup’s bottom line suffered a setback.
Established in 2010 by ex-Coca-Cola executives Neeraj Kakkar and Neeraj Biyani, Paper Boat specializes in offering fruit-based beverages with unique Indian flavors like aam panna (raw mango) and jaljeera (spicy, tangy lemonade). In addition to its diverse beverage range, the company also provides dry fruits and wholesome snacks, including chikki and aam papad.
In December 2022, Biyani departed from the company and subsequently introduced a new skincare brand called Asaya.
Continue Exploring: Former Paper Boat Co-Founder, Neeraj Biyani, unveils skincare brand Asaya
The primary source of revenue for Paper Boat stems from product sales. In the fiscal year 2022-23, the company generated INR 474.9 Crores from the sale of fruit juices and INR 28.7 Crores from food items.
Considering other sources of income, Paper Boat witnessed a 56% increase in its total income, reaching INR 508.5 Crores in the fiscal year under review, compared to INR 325.1 Crores in the previous fiscal year.
Corresponding to the expansion of its revenue, Paper Boat experienced an increase in total expenses, reaching INR 599.1 Crores in FY23, up from INR 378.1 Crores in the preceding fiscal year.
The procurement of stock-in-trade increased to INR 205.2 Crores in FY23, up from INR 149.4 Crores in FY22, while the cost of material consumed rose to INR 182.3 Crores from INR 93.6 Crores in the preceding fiscal year.
Employee benefit expenses increased by 30%, reaching INR 54.7 Crores in FY23 compared to INR 42 Crores in FY22. These costs encompass salaries, PF contribution, gratuity, and other related expenditures.
Renowned for its campaigns evoking nostalgia, the startup allocated INR 13.2 Crores to advertising and sales promotion in FY23, marking an 11% increase from the INR 11.9 Crores spent in FY22.
Hector Beverages is supported by notable backers including Sofina Ventures, Catamaran Ventures, and A91 Emerging Fund. In its latest funding round in 2022, the startup secured INR 400 Crores ($50.1 Million) from Lathe Investment Pte Ltd, a company owned by the Singapore-based sovereign fund GIC.
In the Indian food and beverage (F&B) market, Paper Boat competes with Lahori and Raw Pressery. It also competes against FMCG giants such as Dabur, ITC, Pepsico, and new-age startups including Beyond Water and Coolberg.
The F&B industry in the country has been growing significantly and is projected to reach a market size of $156.25 billion by 2026.