Co- Founder, Hector beverages By S.KRISHNA CHAITANAYA NAIDU
Co- Founder, Hector beverages
ByS.KRISHNA CHAITANAYA NAIDU
•Neeraj's corporate career started after he completed his
MBA from MDI, Gurgaon in 1998.
• He worked with Union Carbide and later Wipro before
joining Coke in 2001.
•He had an amazing run with Coke- the kind that becomes
a part of Corporate Folklore (the jury is still out on whether
there is an entity that may be described as Corporate
Folklore) with the high point being his time in Bangalore
when he seemed to have settled the much-touted Cola
battle conclusively.
•In 2008, he headed to Wharton to do a second MBA and
is now in the thick of the action as CEO of Hector
Beverages Private Limited, India.
My schooling was in Panipat a small town in Haryana and I graduated out of MDI, Gurgaon in
1998.
I joined Coke in 2001 and worked for 7 years.
I worked at Wipro for some time. Then I went to Wharton to do my second MBA.
I came back in 2009 and started a start-up called Hector Beverages.
Before landing a job with the cola major, for a brief while I dabbled in my grandfather’s tailoring
business in Karnal.
It was more to help out the handful of tailors working with him, as their trade was dwindling.
Readymade garments were fast catching people’s fancy. I managed to bag some orders from
export houses but logistical bottlenecks put paid to the effort. It was time to move on…that’s when
Coke happened.
Things moved fast at Hindustan Coca-Cola Beverages. I got a promotion every 12
months – from an area sales manager, shifting to one department from the other, till
I became the general manager of their bottling plant in Bangalore, in charge of their
P&L.
Working for a MNC, which was the market leader, moving up the curve so early in
my career made me cocky about success.
Vandana felt I had turned arrogant…Maybe…I wanted something more
challenging and stimulating.
I was fancying a bigger role at the Atlanta HQ. So, I went to Wharton.
It was 2009, after my summer internship with
Helion Ventures in Bangalore. I was reporting to
Kanwaljit…it was great interacting and learning from
him.
But working alongside Helion’s portfolio companies,
sitting through series of investor presentations got me
thinking…
“Everybody out here is high on energy and wants to
change the world. What am I doing, sitting across the
table! Why had that ambition never entered my thought
process?”
That feeling kept building up and my zeal to get to
Atlanta started dripping.
What am I doing, sitting across the table! Why had that ambition never entered my
thought process?” That feeling kept building up and my zeal to get to Atlanta
started dripping.
The very thought of being on my own was so endearing…so much so that I didn’t
even stay on for my last semester at Wharton. I completed the course via distance
learning – I had to or else father would have been furious! He was anyway upset
about my quitting a job to pursue higher studies, the only consolation for him was
that I hadn’t settled down in the US…but I still hadn’t told him what was on my
mind.
Suhas from those days at Coke was looking to start something new. He had already
dabbled with entrepreneurship. Since I was pretty clued into beverages, both of us
felt it was a good opportunity to look at functional ones. At this point, James,
whom I knew during my Wharton days, too joined the venture. The three of us put
together 1.75 crore to bootstrap Hector Beverages. I pooled in my entire savings
of 75 lakh, Suhas pulled in 25 lakh and James the rest. We discussed and debated
on the target segment, the product…during one such session Suhas came up with
the idea of a protein-based drink. The rationale was that since Indians are protein-
deficient, there was a humungous need for a veg-based protein drink. It was like a
eureka moment…we were kicked, thinking it was a great insight. If we could make
a tasty product, people would be eating out of our hands…
We got moving on the idea…sourced soy isolate from
DuPont and got the product made out of Chennai. Priced
at 30 per sachet, Frissia was the first offering, a protein
powder that one had to mix with water and gulp down. It
was that simple. But we felt influencing consumers through
doctors would be tough, so why not hit the gyms…The
instructors would be our brand influencers and
ambassadors. Boy! How pumped up we felt about our
marketing strategy!
We would urge the regulars to try our unique offering…little did we realise the
reason why protein drinks were being sold in big jars.
While we were tom-toming “protein piyo, sehat ban jayegi”, the guys were not
impressed. The common refrain was, “Teen-chaar din se le raha hoon, phir bhi kuch
doley vole nahi aa rahe hain.” It was so exasperating convincing them that it would
take six to eight months for the results to be visible, that it wasn’t going to happen
in days.
But no one was buying the product. The only faithful ones consuming the product
were the three of us! Our startup lost 80 lakh on the experiment and my dad is cool!
It was time to move on. That’s when we chose to enter the energy drinks market.
Though we had failed in our maiden endeavour, we were never short on
confidence, nor were our first set of angel investors.
Helion was keen to invest, what we wanted was a $1.5 million cheque…for Helion,
the minimum ticket size was $5 million. So we chose to tap angel investors.
All the past associations came in handy…Kanwaljit invested in his personal
capacity, Shripad, whom I knew from Coke, and two of my classmates each of
them invested 25 lakh.
The big moment was when NRN came on board as
our first major investor, thanks to Kanwaljit, who
knew Josh at Footprint Ventures. Josh had
previously worked at Infosys as manager, corporate
planning, and had a good rapport with NRN. He
came down to meet us, liked what he saw…we
were stunned when he said, “I would like you guys
to meet NRN.”
The fear of rejection – that paisa nahi milega toh kya hoga thought was there at the
back of our minds…our plan was all on paper. But suhas tried to defuse the tension
by saying, “agar kuch nahin hua, toh zindagi mein yeh ek bucket list tick hojayegi
ki hum nrn se mile.”
Thankfully, there was chemistry the moment we introduced ourselves to NRN. He
liked our background, academics and more importantly the idea that we were
presenting…“This is our unique soft packaging …aimed at breaking the clutter and
moving away from the world of Tetra Pak….it is less damaging to the ecology”…I
went on passionately, showcasing the packaging for what would become Tzinga.
” I just mumbled, “Sir, I was nervous speaking in front of you.” That was it and
within minutes NRN went out of the room. We clicked pictures with him before
that…As we walked out of his office, we were kidding that I had battle scars all
over me. Josh was unsure, but I intuitively felt that our idea had resonated well…
I wasn’t wrong…we raised 5 crore in the first round in September 2010 and went
on to raise $4.5 million in two more tranches. It was around this time that Neeraj,
whom I knew at Coke, came on board as a partner, chipping in 50 lakh as capital.
It took us one-and-a-half year to work on the product. We launched it in 2011. The
product was good, but it wasn’t growing as fast as we wanted it to.
After more than a year, the burn rate wasn’t exactly inspiring. Maybe it was
that…somewhere down the line, we lost interest in developing the drink. Had we
continued only with Tzinga we would have been a relatively small success story.
But the launch was a good lesson for us in terms of branding, about how
distribution mattered.
One morning, James mentioned that his parents were coming down from the US
and he wanted them to have a local experience, especially gol gappa and aam
panna.
Sequoia Capital came on board. I vividly remember the first meeting with VT and
Sakshi at our Gurgaon office. It was January 2012.
Sequoia did invest… $5 million and $12 million over two rounds.
We built the company around those two words. By
creating this traditional drink we were being
authentic – the products were how they should be.
At the same time, alive meant it was modern,
contemporary, and cool despite being a traditional
recipe.
Marrying the two aspects to create a strong brand
was Ashwini and her team at Elephant Design.
They came up with a unique design and brand
name…Paper Boat. I believe this is Ashwini’s best
creation by far...
The plan was to launch aam panna, but we
realised that were no suppliers of green mangoes!
Most waited for the fruit to ripen.
Till such time that we fixed the supply chain, we
launched jaljeera, a concoction of lemon juice and
spices, and aamras, a ripe-mango smoothie, in
flexi laminated pouches with a plastic nozzle for
rs30 in 2013 in Delhi and Bangalore.
The initial reaction from retailers was “jo cheez
ghar pe banti hain usey koi kyun kharidega?”
Today, there is no looking back. We finally launched aam panna in 2014…we have
eight flavours, which are available through the year, and in eight seasonal flavours.
It takes one-and-a-half year, on average; to create a new drink…some take longer.
There are some flavours we haven’t given up on yet.
There is kaanji, a probiotic drink made from purple carrot that was once available
in the North, it is no longer is available in any part of the country.
The search for the elusive carrot took me all the way to Turkey! What a trip that
was…I had stuffed close to 30 kg of the produce to be brought to India for trial
tests, only to have it trashed by the customs department, thanks to the paranoia
around mad cow disease.
With your vast experience what would you like to advice
the young entrepreneurs for a successful start-up?
Definitely my first advice would be that if entrepreneurship is his/ her ambition,
then one should go for it . What I’ve seen among Indian youth is that most of them
are bound to do something new but many don’t come out due to the fear. One
should conquer the fear first. India as a country requires a lot of entrepreneurs.
Believe in yourself and your idea and go ahead. Indian youth are extremely
capable. Second thing I would say is choose the right thing at the right time. Be
clear on your idea and go ahead.