The Indian snacking market is estimated to be between $15-20 billion currently. Healthy snacking would be around 2-3 percent of this market currently. The market opportunity for snacking is around $30 billion. The kids and teens snacking category itself is $10 billion. Therefore, there is enough headroom to grow the kid’s food and nutrition segment in India.
It is expected that as we progress economically, our consumption patterns would shift towards healthier alternatives. As snacking touches $30 billion within 5 years, we feel that ‘better for you’ healthy snacking would be at least 15 percent of the overall category. This is a fivefold growth over the next 5 years. Seeing the huge potential that the category holds, a brand called Lil' Goodness has been launched in March 2020.
Explaining the idea behind starting the brand, Harshavardhan S, Co-Founder and CEO, Lil'Goodness said, “Kids, especially in the age group of 5-18 years old can be molded to make good food choices for a healthier next gen. Junk eating especially during snacking is a major contributor. Looking around the retail shelves or even online, there were limited options for kids compared to whole shelves and aisles dedicated to kids’ food and nutrition in European and US stores. The potential for creating impact is huge. The passion to create an impact for 100 million kids and their families is what drove me to start up Lil’ Goodness. As fathers, we felt that our kids should eat better growing up, and perhaps that is the most important inspiration that keeps me on the growth path.”
Lil' Goodness offers a gamut of healthy snacks like chocolates, puffs, chips, and dairy drinks with Goodness based ingredients. The brand offers India’s first dark chocolate at Rs 20 with prebiotics and real cocoa or India’s first super grain extruded snack with teff (a super grain from Ethiopia) at Rs 30.
“We use the nutrition in traditional ingredients such as chicory, teff, and other millets mixed with exciting formats such as chocolates, milkshakes, and puffs to create exciting snacks that kids love for taste and adults endorse for nutrition. Lil’ Goodness is the first brand in India to launch gut health-friendly prebiotic dark chocolates,” stated Harshavardhan.
The brand plans to launch 5 new products within existing categories including India’s first probiotic chocolates.
“We have plans to add 5 new games in the next quarter for on-pack gamification. The community for teenage nutrition has also been planned to go live in the next quarter,” he added.
The brand has an omnichannel presence with 60 percent online revenues and 40 percent offline revenues with a repeat rate of 34 percent. It is present on Amazon, Flipkart, Big Basket, and Jiomart, besides its own website.
“Our website has seen close to 300,000 purchases over the last year,” Harshavardhan noted.
Lil' Goodness has a robust offline presence as well. It has a presence in 14 territories, 42 towns in India, across 3000 stores. This includes the top 6 metros, and select territories in West, South, and North Eastern India. The brand is also present in major retail chains such as Reliance Retail, Nature’s Basket, etc. It also maintains a presence across 3 warehouses across the country to improve the shipping experience for customers.
“We are currently experimenting with creating unique snacking experiences within certain stores, for instance, store-in-store models or exclusive retail presence in certain physical spaces where our consumers are present. These plans will be more concrete over the next 6 months before we plan to have a significant offline presence,” he further said.
All of Lil' Goodness’ new packs are gamified. Each pack has a unique QR code that is scanned to access an online portal that has content, nutrition awareness-related gamification, and rewards for consumers. The brand will be the first in the category to do this.
Lil' Goodness is digitally enabled and connected, end to end, from its customer touchpoints to its inventory management systems, even the retail ordering and distribution management. It is also adding another layer of technology integration through on-pack gamification, content engagement, and communities.
“We are also working with partners to enable traceability till the source of raw materials, especially for products that are specifically customized for us,” asserted Harshavardhan.
Everyone top-down speaks to customers to get a real pulse of what is happening in the market, what is their reaction and feedback to our products, and to understand macro trends that will shape the industry. The brand communicates with its customer through online channels, use events and activations to reach out to them for feedback, and use data from online marketplaces to reshape its go-to-market. It has already piloted a customer data platform and web engage for online marketing automation of customer cohorts based on website and purchase behavior.
Simultaneously, the brand uses shelf placement and engagement on packs to drive retail purchases, along with promotions, and presence in all events relevant to kids/ families to create brand awareness and conversions. It further utilizes online data to identify territories/ pin codes to enter new retail markets.
Lil' Goodness has garnered Rs 2.4 crores of revenue in FY22. It is estimating a fivefold growth for FY23. The company has achieved a gross revenue run rate of Rs 1.5 crore/month in Dec’22, growing 6x in 10 months.
“Our vision is to be a Rs 500 crore brand by 2025, with an intermediate milestone of Rs 100 crore by 2024. We want to touch at least 20 million families with kids, through our products,” Harshavardhan said.
Additionally, the brand plans to raise a Series A round in the next 6 months.
Lil' Goodness also plans to scale to 10,000 retail stores by September 2023 and scale tenfold in online marketplaces.
“We also plan to launch 10 games for on-pack gamification and establish collaboration with at least 500 schools across India. We also plan to increase presence with instant grocery channels and improve penetration within existing retail channels,” he explained.
“Our plan also includes scaling website sales through partnerships such as Disney and increasing repeat sales to 50 percent of the website,” concluded Harshavardhan.