Esah Tea bolsters presence in Delhi, sets sights on 5,000 outlets nationwide by 2024

News

By

-

November 7, 2023

Esah Tea, an Assam-based D2C tea brand, has announced its grand expansion in Delhi. This strategic leap marks a significant milestone in the brand’s journey, bringing the rich heritage of Assam’s tea culture to the bustling capital region.

Esah Tea has established a notable presence in Delhi, encompassing key locations such as West, East, Central, and North Delhi, offering its products in over 80 departmental stores. With plans to expand further, the brand aims to extend its reach to South Delhi, Gurgaon, and Noida, ensuring accessibility for tea enthusiasts across the entire Delhi-NCR region.

This expansion aligns with Esah Tea’s ambitious mission, intending to convert more than 20,000 acres of land to organic tea cultivation in Assam. Simultaneously, they plan to onboard over 1000 local small tea growers by the year 2025.

Esah Tea’s diverse range can be found in multi-brand stores across Delhi-NCR, with specific modern outlets such as Baniya ki Dukan (BKD), Max Bazar, Kia Bazar, and Kisan Mandi showcasing the brand’s exceptional collection. Among the 10 unique product variations available, each promises a distinctive tea experience.

Moreover, the brand has introduced a line of instant chai that features tempting variants like Cardamom, Masala, and Kadak chai. Additionally, catering to the health-conscious consumer, they’ve launched the Instant Mango Turmeric Latte.

On the expansion Bijit Sarma, Founder and CEO of Esah Tea said, “Our journey, expanding from our humble beginning to Delhi-NCR and beyond, is a testament to our unwavering commitment to providing the healthiest, and the most authentic tea experience for our valued customers. As we grow, we remain resolute in our promise to provide premium, organic teas that not only taste great but also embody our dedication to eco-friendliness and healthy living.”

The standout product among Esah Tea’s offerings is the Assam Organic Gold CTC Chai. This distinctive blend presents a cup of tea with a bright yellow-brown hue, reminiscent of the original Assam Tea from the 19th century. In contrast to traditional teas that darken upon boiling, Esah’s organic variant maintains its appealing color, setting it apart.

What distinguishes the tea brand further is its meticulous approach in selecting tea blends sourced from over 150 local gardens and small-scale tea cultivators. This ensures a swift journey from the garden to the cup in just ten days, skipping intermediaries and preserving the tea’s freshness and quality.

The pricing of Esah Tea products aligns with the brand’s aim to make organic tea accessible to a wider audience. This pricing structure positions Esah Tea on par with conventional tea brands, with just a 10% premium cost. Additionally, the brand is currently offering exclusive discounts in stores.

Established in 2021, Esah Tea, initially available in just ten premium stores, has rapidly expanded its footprint to encompass over 600 stores nationwide. This presence extends to both online platforms, exclusively on Big Basket and Amazon.in, as well as offline locations in key cities like Guwahati, Delhi-NCR, Bangalore, Hyderabad, and Kolkata. The startup is gearing up for its next funding round, aiming to secure investment to realize its ambitious target of reaching 5,000 outlets across India by 2024. Beyond India’s borders, Esah Tea exports to over 10 countries, including the USA, South Korea, Abu Dhabi, and the UK. With a growing customer base of over 100,000 individuals, both online and offline, the brand’s unique strategy of offering complimentary in-store tea tastings has garnered positive feedback and encourages immediate purchases.

Onion price hike could push India’s inflation to 6%, economists say

News

By

SnackTeam

-

November 7, 2023

0

Economists have suggested that the recent increase in onion prices is unlikely to exert a substantial influence on October’s inflation figures. However, they warn that this upward trend in onion prices could potentially result in inflation reaching approximately 6% in the upcoming months.

During the initial week of November, onion prices surged by almost 75% in comparison to the preceding month.

“Alongside a rise in broader vegetable prices in October, we expect CPI inflation to rise to 5.3% y-o-y from 5.0% in September, with headline inflation tracking 6% in November/December, before moderating next year,” said Sonal Varma and Aurodeep Nandi, economist, Nomura.

Despite economists’ assertions that declining tomato prices will likely maintain inflation at bay in October, they warn that the scenario might deteriorate in the future.

“Daily food prices from the National Horticulture Board is indicating a 10.9% MoM rise in onion prices in October, which is being countered by a 9.3% decline in tomato prices. Potato prices are also showing a mild decline in October. Overall vegetable prices, on a CPI-weighted basis, are showing a mild positive increase on a month-on-month basis,” said Gaura Sengupta, economist, IDFC First Bank.

Onions account for 0.64% of the overall retail inflation basket, while tomatoes hold a slightly lower 0.57% weight within the inflation basket.

“Retail prices are up by 30-40% y-o-y basis, so the impact can be around 0.19-0.24% in October,” said Madan Sabnavis, chief economist, Bank of Baroda.

Nevertheless, economists argue that a recurrence of the July-August period, during which inflation exceeded the Reserve Bank of India’s upper threshold of 6%, is improbable.

“The pick-up in onion prices is due to uneven monsoon distribution, which has impacted arrivals in September and October. But the disruption in supply isn’t as steep as it was in the case of tomatoes. Seasonally, onion prices tend to rise in October and November and then decline in December or January,” Sengupta said.

The government maintains a reserve of 500,000 tonnes. As of October 28, a total of 170,000 tonnes from this stockpile had been released for sale.

“The government has swung into action, announcing export duties on onions, minimum export prices and offloading buffer stocks, although prices are yet to cool,” said Nomura economists.

Even with declining prices, food inflation maintained an average of 6.6% in September. The strain caused by elevated onion prices is anticipated to sustain high food prices.

October’s inflation data will be made available by the government on November 13th.

India and Brazil strengthen trade ties with MoU for soybean oil imports

News

By

SnackTeam

-

November 7, 2023

0

The Solvent Extractor’s Association of India (SEA) and the Brazilian Association of Vegetable Oil Industries (ABIOVE) have entered into a memorandum of understanding (MoU) to facilitate the import of soybean oil.

India holds the distinction of being the world’s largest importer of edible oils, bringing in approximately 15-16 million tonnes of various edible oils. This includes a significant portion of around 3.5 to 4.0 million tonnes of soybean oil, primarily sourced from Latin America.

“Brazil is one of the major suppliers of soyabean oil to India. In 2022, Brazil exported 1.4 million tonnes and in the current year till September, it has exported 1.2 million tonnes of soyabean oil to India,” said SEA in a media release.

On November 2, 2023, the Memorandum of Understanding (MoU) was signed by Ajay Jhunjhunwala, the president of SEA, and Andre Meloni Nassar, the president of ABIOVE.

Both organizations have reached an agreement to collaborate on matters related to the supply, utilization, and commerce of soybeans, soymeal, soybean oil, and other oilseeds along with their by-products.

“The objective of the MoU is to create a common platform to facilitate the joint interaction of both institutions under the governmental spheres of both countries and promoting public-private partnerships of mutual interest towards economic integration between the two countries in the oilseeds sectors, through the reduction of bilateral and multilateral trade barriers on oilseeds, oilseed products and edible oils,” said SEA.

Home furnishing startup Vaaree secures $4 Mn in seed round led by Peak XV’s Surge

News

By

SnackTeam

-

November 7, 2023

0

Vaaree Co-Founders Pranav Arora, Garima Luthra, and Varun Vohra

The home furnishing startup Vaaree has successfully raised $4 million in a funding round with Surge by Peak XV (formerly known as Sequoia Capital India & SEA) taking the lead. Other notable participants in this funding round include PeerCapital, All In Capital, and Better Capital.

The startup announced that the funding will expedite their efforts to invest in recruiting talent and improving the user experience on their online platform.

Established in 2022 by Garima Luthra, Pranav Arora, and Varun Vohra, this Bengaluru-based startup, Vaaree, operates as an omnichannel home decor company. Their product range spans from kitchenware tailored for home chefs to bedding items that promise comfort and quality.

Commenting on the funding round, Co-Founder Vohra said, “We’ve got great traction and response online, and now we’re poised to make an even greater impact with our first physical store in Bengaluru. With the infusion of this latest round of funding, we’re set to catalyse growth across various fronts — from expanding our team to investments in cutting-edge technology and AI applications.”

According to him, this funding will empower Vaaree to focus on key aspects, including curation, merchandising, supply chains, and the development of seamless omnichannel experiences.

Within a year of its launch, the home furnishing and decor startup asserts that it has successfully delivered 150,000 products to households across India and expanded its offerings to over 20,000 products. Vaaree recently inaugurated its inaugural retail store in Bengaluru, showcasing a collection of 2,000 products.

At present, it showcases carefully curated lifestyle collections that are updated on a weekly basis.

The startup also includes notable investors in its roster, such as Kunal Shah, Arjun Vaidya, Vineeta Singh, Ghazal Alagh, Varun Dua, Manish Dugar, Anjali Bansal, Suhail Sameer, Prabhu Rangarajan, Mohan K, Ruchi Deepak, and more.

Based on a research report from Research Markets, the home decor market in India is projected to attain a value of $40.98 billion by 2028, with a compound annual growth rate (CAGR) of 4.14%.

Recently, the interior design startup Flipspaces secured $4 million in its Pre-Series B funding round, aimed at expanding its operations on the West Coast of the US and strengthening its technological infrastructure. Additionally, in March, Design Cafe reportedly obtained $4.8 million to facilitate its entry into new markets.

Mamaearth marks its entry on NSE with nearly 2% premium debut

News

By

SnackTeam

-

November 7, 2023

0

Mamaearth, the D2C unicorn, marked its debut on the Indian stock exchange NSE, opening with a nearly 2% premium. The shares were listed at INR 330, showing a listing gain of INR 6 from the issue price of INR 324.

Mamaearth’s shares debuted on the BSE with a flat listing at INR 324.

In the early hours of trading, Mamaearth shares reached INR 337.60 per share, but they later stabilized at INR 331.45 on the NSE. Presently, the company holds a market capitalization of $1.28 billion.

Honasa Consumer Limited (HCL), the company behind Mamaearth, allocated 2.36 crore equity shares to anchor investors, generating INR 765.2 crore in funds as a component of its initial public offering (IPO).

On its first day, the IPO received a tepid response, registering a subscription rate of only 0.13X. According to BSE data, the offering attracted bids for 36.25 lakh shares out of the 2.88 crore shares available. Interestingly, the segment designated for employees was oversubscribed by 1.98X by the close of the day, as employees bid for 67,344 shares against the 34,013 shares allotted.

On the final day of the public issue, the IPO saw significant oversubscription of 7.61X, primarily due to strong interest from qualified institutional buyers (QIBs). It garnered bids for 22 crore shares compared to the 2.89 crore shares on offer.

Early-stage investors have reaped substantial profits from the listing. At the highest listing price of INR 324, Snapdeal cofounders Rohit Bansal and Kunal Bahl are poised to achieve returns of nearly 101X on their initial investment, whereas actor Shilpa Shetty is anticipated to witness returns of 7.74X.

Within the group of angel investors involved in Mamaearth’s OFS segment, the standout beneficiary appears to be Rishabh Mariwala of Sharrp Ventures. At the highest listing price, he is expected to gain a substantial windfall of INR 181.23 crore, representing a return of over 53X on his initial investment of INR 6.05 per share. Following the sale, he will retain ownership of 34.2 lakh shares with a combined value of INR 110.81 crore.

Commenting on the startup’s stock market debut today, Prashanth Tapse, Senior VP Research Analyst at Mehta Equities, remarked that the flat listing aligns with the brokerage’s anticipated outcome.

“Though risky investors feel the price is good for long-term as the business model has high potential of growth, we would continue to remain cautious on Mamaearth on the back of the loss-making nature of the business, high portion of OFS, high competition with margin pressure, low promoter stake, and weak financials which suggest a cautionary stand as historical listings with high valuations have often faced post-listing challenges,” Tapse added.

Established in 2016 by a husband-wife team, Mamaearth has grown to encompass a diverse portfolio of brands within its parent company, Honasa Consumer. The startup presides over four beauty and personal care brands, namely The Derma Co., Ayuga, Aqualogica, and Dr. Sheth’s.

Mamaearth has announced that the funds raised from the fresh issue will be allocated towards bolstering marketing endeavors, amplifying brand presence, setting up new exclusive brand outlets, and extending the network of BBlunt salons.

Mother Dairy eyes expansion with a new INR 500 Crore facility in Maharashtra

News

By

SnackTeam

-

November 7, 2023

0

Mother Dairy is contemplating the establishment of a new facility in Maharashtra, earmarking an investment of approximately INR 500 crore for the production of milk and value-added dairy products. This initiative aligns with the company’s overarching investment strategy, which encompasses an outlay of around INR 700 crore in the coming years.

Mother Dairy, a prominent player in the dairy industry, operates as a fully owned subsidiary of the National Dairy Development Board. In addition to its extensive range of milk and dairy products, Mother Dairy has gained recognition for its Dhara brand of edible oils. Furthermore, under the Safal brand, the company offers a diverse array of products such as fresh fruits, vegetables, frozen vegetables, snacks, pulses, and concentrates, catering to a wide spectrum of consumer needs.

Manish Bandlish, Managing Director, Mother Dairy said, “We have recently got a nod from our board for investments of about INR 700 crore which will be made over the next few years.”

The company will be making significant investments to expand its manufacturing capabilities.

“We are in the advanced stages of land procurement to set up a new plant in Nagpur, Maharashtra. This plant will manufacture dairy and value-added dairy products. We will be making investments of about INR 500 crore in setting up this plant. This will become a hub for us to serve Western and Southern regions,” he added.

Last year, the company boosted its manufacturing capacity by 20-25% in the dairy and value-added dairy products segment. The upcoming plant is anticipated to provide an additional 15-20% increase in the company’s capacity within this segment.

“In the food processing segment, we are also looking at setting up a new plant in Karnataka,” Bandlish added.

During the fiscal year 2023, Mother Dairy witnessed a revenue increase of approximately 17%, reaching INR 14,500 crore.

“Last year, the growth was significant from the revenue perspective. We saw 16-17 per cent volume growth. During this fiscal, the summer was impacted due to unseasonal rains. However, post August we are seeing handsome growth rates,” he explained.

Bandlish added that post-August, the company has seen an uptick in sales even for seasonal categories such as ice creams. “In the current festival season too, one is witnessing strong consumption trends,” he added.

The company has stated that it possesses a robust lineup of innovations spanning various categories, including bakery, ice creams, paneer, and other value-added products.

“We have announced plans to launch 100 new products over the next three years and we are on track to achieve this goal,” he added.

Radico Khaitan reports 19.4% surge in Q2 profit driven by high-end brands demand

News

By

SnackTeam

-

November 7, 2023

0

Radico Khaitan, an Indian liquor manufacturer, announced a 19.4% increase in its second-quarter profit on Monday, attributed to robust demand for its high-end brands.

The consolidated net profit for the three months ending on September 30 increased to 618.7 million rupees ($7.4 million) from 518.2 million rupees compared to the same period last year.

Over the past year, the company has placed a growing emphasis on the expansion of its premium category, known as ‘Prestige and Above,’ targeting a consumer demographic that remains largely unaffected by inflationary pressures.

The premium segment’s sales, encompassing products like Magic Moments vodka and Jaisalmer gin, surged by almost 22% to reach 2.8 million cases during the period from July to September. This segment represents nearly 41% of the overall sales and contributes to over half of the total revenue.

In contrast, the sales of its lower-priced segment declined by 16.5% to reach 3.2 million cases.

The revenue increased by 23.1% to reach 37.15 billion rupees for the quarter.

“We expect demand momentum to improve with the upcoming festive season,” Chairman and Managing Director Dr. Lalit Khaitan said in a statement.

At the same time, analysts noted that prices for Extra Neutral Alcohol, a crucial ingredient in liquor production, have increased due to elevated grain prices, while other input costs like those for glass, paper, and packaging have decreased.

As a result, the company experienced a 15.4% surge in its raw material costs, leading to a 23% rise in total expenses, amounting to 36.32 billion rupees.

Radico Khaitan is the first major listed Indian liquor company to report its results. Rivals United Spirits and United Breweries will report their results later this week.

Radico Khaitan’s shares concluded 1.3% lower prior to its results. Year-to-date, they have surged by 28.7%, contrasting with a 22% increase in United Spirits and a 6.5% decrease in United Breweries.

October sees major drop in Thali costs as tomato and potato prices tumble

News

By

SnackTeam

-

November 7, 2023

0

In October, the price of a thali decreased due to the declining costs of tomatoes and potatoes, contributing to greater affordability in food, as per the most recent report from Crisil.

The cost of a vegetarian thali dropped by 5% compared to the previous year and 1% sequentially, while non-vegetarian thali prices reached their lowest point in more than a year.

“The cost of non-veg thali declined faster as the price of broiler (~50% share in the thali cost) softened an estimated 5-7% on-year on a high base,” said Crisil.

In October, a vegetarian thali was available at a price of INR 27.5, while a non-vegetarian thali cost INR 58.4.

Tomato prices saw a 38% reduction in October compared to the same period last year, while potato prices dropped by 21%.

Fuel expenses were also reduced due to the government’s decision to provide a subsidy on LPG cylinders. The price of an LPG cylinder has now decreased to INR 903 from its previous rate of INR 1,053.

Nevertheless, Crisil anticipates a potential price increase in November, especially if onions, constituting 10% of the thali cost, experience a surge in prices. During the first week of November, onion prices were 75% higher compared to the previous month.

During October, onion prices acted as a deterrent, preventing thali prices from experiencing a more significant decrease.

“Further decline in thali prices was capped by a rise in onion prices in the second half of the month to INR 40/kg on average from INR 34/kg in the first half, trading 25% higher on-year in the second half owing to a lower kharif output estimated in 2023,” it stated.

Bikaji Foods International delivers strong 46% YoY profit growth in Q2 FY24

News

By

SnackTeam

-

November 7, 2023

0

Bikaji Foods International Limited (Bikaji), a manufacturer of ethnic snacks, announced on Monday a 46% increase in its profit after tax (PAT) for the quarter ending on September 30, 2023. According to the company’s regulatory filing, the PAT for this quarter stood at INR 59.8 crore, compared to the INR 40.9 crore recorded during the same period in the previous fiscal year.

In Q2 FY24, the company’s revenue from operations increased by 5.5% year-on-year (YoY) to reach INR 608.7 crore, surpassing the INR 577 crore in revenue recorded during Q2 FY23.

According to the BSE filing, the company’s total expenses for Q2 FY24 amounted to INR 539.4 crore, marking an increase compared to the INR 526.8 crore in total expenses incurred during the corresponding period in the previous fiscal year.

Bikaji Foods reported a YoY EBITDA growth of 36.5%, reaching INR 87.7 crore, resulting in a margin of 14.4%, which represented a YoY increase of 330 basis points (bps) and a QoQ increase of 80 bps. This improvement was attributed to enhanced operating efficiency, a more favorable product mix, and the positive impact of lower raw material costs, as compared to the EBITDA of INR 64.2 crore in the previous period.

Deepak Agarwal, managing director of the company said, “Our steadfast commitment to improve profitability has successfully helped us achieve record EBITDA. A key aspect contributing to our success this quarter has been the enhanced operating efficiencies we’ve implemented across our operations. This has helped us to position for further growth and advancement across various markets. With festivities around the corner, we are confident and optimistic about the upcoming quarter.”

Zomato’s Gold loyalty program continues to drive sales, but analysts suggest adjustments for profitability

News

By

SnackTeam

-

November 7, 2023

0

While Zomato’s loyalty program Gold, which underwent a relaunch in January this year, continues to boost the company’s sales, analysts and experts suggest that adjustments may be necessary to mitigate its impact on the company’s profitability. They emphasize that while loyalty programs are vital for retaining customers, it’s equally important for the program’s financial viability to be sustainable in the long term.

The programme is attractive and may help the company win the market share game… but it needs to be accretive on the margins after a point,” commented an analyst based in Mumbai.

In the company’s earnings report for the September quarter, released on a Friday, Zomato’s Chief Financial Officer, Akshant Goyal, revealed that Gold members accounted for 40% of Zomato’s gross order value (GOV) for food delivery.

However, “a Gold order is less profitable than a non-Gold order due to the impact of programme benefits,” he had said. “The delivery charges paid by the customer are almost negligible (due to the free delivery benefit for orders above a certain value),” Goyal had noted in Zomato’s letter to its shareholders.

In the quarter ending on September 30, the company disclosed a net profit of INR 36 crore, marking a notable rise from its previous quarter ending in June when it achieved its first-ever quarterly net profit, which amounted to INR 2 crore.

Also Read: Zomato turns profitable in Q1 FY24, reports INR 2 Cr consolidated PAT

“There is some assurance in the fact that loyal customers are ordering and are ordering more… but it is important that drag on food delivery margins does not turn into value eroding,” said an analyst. “I’m sure the company has plans to turn some levers that could increase margins from Gold customers without affecting the growth… That’s where the focus is required.”

The analyst emphasized that the company’s strategy of using discounts to promote Gold adoption resulted in a membership increase that exceeded their initial expectations.

“The adjusted ebitda (earnings before interest, taxes, depreciation and amortisation) margin for food delivery expanded marginally in Q2 compared to Q1 (from 2.5 to 2.6 percent)…this was likely to come in higher if not for the added discounts,” the person said.

Swiggy, a competitor of Zomato, offers its own subscription service known as Swiggy One, which offers advantages within the food industry. These benefits also apply to their quick commerce platform, Instamart. However, Zomato Gold benefits are not applicable to their quick commerce division, Blinkit.

According to a research note from UBS Securities dated October 4, Zomato has recaptured the majority of the market share it had lost to Swiggy since the relaunch of its loyalty program, as evidenced by data from the first six months of 2023. The report highlighted that in the latter half of the 2022 calendar year, Zomato experienced a decline in market share to Swiggy. This was primarily due to the suspension of the Gold program and Zomato’s increased emphasis on profitability.

In order to promote Gold adoption, Zomato has employed a strategy of offering the subscription at discounted rates. However, the company has mentioned that this strategy is likely to undergo modifications. During the analyst call following the earnings report on Friday, Goyal suggested that the rate of membership growth for Gold was anticipated to decelerate.

As of September 30, the company disclosed a Gold membership count of 3.8 million, a significant increase from the 2 million reported in the previous quarter. In contrast, Swiggy One’s subscriber base was reported to be in the “low-single-digit millions” as of late August, according to an informed source.

“Zomato Gold is a fairly new programme, and the idea is to keep the programme affordable for our customers and make sure they are loyal to our platform,” Zomato’s CFO said. “We expect the pace of increase in gold membership to slow down from here on… These are usually the more frequent customers who want to become members, so from here on that pace will slow down.”

The company acknowledged that its cost per order for Gold customers was elevated due to various factors, including increased delivery expenses stemming from longer average delivery distances, priority service provided to Gold members during peak hours, and the additional costs associated with the no-delay guarantee benefit. To stimulate Gold membership adoption, Zomato has been offering the subscription at reduced rates, some as low as INR 49 for a three-month period to select customers.

“I think one (aggressive Gold pricing in response to competition) is past and the other (contribution margin from Gold expected to improve) is the future. From here on, we expect the delta in margin between a gold and non-gold order to reduce,” Goyal said. “I think we have a good handle on those things by now, and hence we can be sharper in terms of pricing more effectively going forward.”

NewsHub