Snacks used to be an occasional fulfillment. However, today, snacking is almost synonymous with a ‘fourth meal’. With nearing $400 billion annual global sales, the snacking industry is robust and will continue to thrive. Notably, this growth is driven by soaring demands from developing regions such as India and China as they constitute a large part of the global population. In the savoury snacks market for instance, the Indian market has been forecasted to have the highest growth among all the other countries in the world – 16.6 percent between the years 2015 and 2020. To take a share from this huge business, Arul Murugan with his 2 friends established SnackExperts. To know more about the brand, retailer media caught up with the Founder, CEO, Arul Murugan to know more about the brand.
What speculated you to launch SnackExperts? Share the journey with us.
I worked in a food processing company for 7 years before starting SnackExperts. During that period, I realised the complex issues in the distribution of FMCG products, which made processing companies to add preservatives while processing. It takes hardly 2-3 hours in factory to convert raw material to ready to eat product. 70% of the times, the product is eaten by the consumer within 2-3 hours since most of the retail FMCG product comes in a 3-5 serving size. However, traditional supply chain takes 25-40 days to reach the consumer. This is forcing industry to add chemical preservative to product that increases shelf life. These preservatives are not good for health if consumed on a regular basis. We found a clear opportunity here to build a unique FMCG brand. My college friend, Arun Prakash, me and her sister Mary Shamla, who had IT back ground collaborated to build Snackexperts. Today, we are making snack products with 30 days shelf life. This year we crossed 1.25 crores turnover and are growing at a rate of 15-20% month on month.
What were the challenges you faced while establishing SnackExperts?
Being a first generation entrepreneur, coming from an agriculture family background and having worked in the industry for 7 years, it took some time for me to convince my family. After convincing them, All 3 of us (founders) were earning decent amount of salary, we fixed our expenditure plans in our budget. Initially I quit the job and started working full time. Later as we grew, Shamla and Arun quit their jobs and joined the team.
What is the USP of your brand?
Our unique snack product range is our USP. We are adding 2-3 new products month on month and we wish to continue the same in coming days. On the other hand, we are also eliminating underperforming products from our catalogue based on consumer response and feedbacks.
Having found your seed investor, how did you utilise the funds?
We have raised 2 rounds of seed funding from leading angel investors. We spent most of our funding into team building and ecommerce verticals.
What are the sources of your products and what is you distribution blueprint?
We identify ingredients with higher natural shelf life (Oats, Dates, Honey, Dryfruits, nuts) and nutritional values we do product development trials with different combinations to come out with better taste combinations.
Since we are following direct to consumer approach, we have no distribution model like traditional FMCG companies. As we grow, we are looking to follow Omni channel approach for delivering products.
On an average, how much does a customer pay for a single purchase?
On our website, we have 3 options:
- Customers can select an Rs.150 box for which he gets 3 different packets of snacks as tasting samples (50 gm each).
- Customer can pay Rs.699 and select 5 different full sized snack pouches (150gm each).
- Box for Rs 1799 has 3 boxes of Rs 699 each, which are available on discounted rate and customer can customise his/her options.
What are your expansion plans? Are you planning to deliver beyond national boundaries?
Even though we are an ecommerce company, we deliver across India – 90% of our orders are coming from Chennai region only. We have huge scope to expand to other cities and we have right product choices to scale. In next 2-3 years, we would like to focus more on building an FMCG brand out of India.
How do you deal with logistics limitations of e-commerce?
As a startup, operating in food space is a difficult problem to solve. We were insisting customers to place an order 2-3 days in advance to avoid delays. Our 3-box subscription model is helping us to plan our deliveries on time.
Any piece of advice for the aspiring entrepreneurs
We all need to learn to build a self-sustainable company before running a funded one. I feel this will save many startups from shutting down.