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<\/i>Rashmi\nPratap, The Hindu Businessline<\/i><\/p>\n <\/i>Rashmi\nPratap, The Hindu Businessline<\/i><\/p>\n
Mumbai, 17 October 2016<\/i><\/p>\n
Paperboat\ncreated a new category of branded ethnic-flavoured drinks when it burst\non the scene, and its packaging too set it apart from the crowd. But\naccording to Harish Bijoor, CEO of the Bengaluru-based brand\nconsultancy that goes by his name, “Paper Boat’s communication is good,\ninteresting and different, but it is niche — and that is a negative.”![\"\"](\"..\/images\/neeraj-kakkar-paperboat.jpg\")
When\nNeeraj Kakkar and his team at Paper Boat decided to launch Kanji, a\ntangy probiotic drink popular in Punjab and Uttar Pradesh, they were\nsurprised to find that the original recipe had been modified due to\nunavailability of the key ingredient: purple carrot.
With orange\nand red carrots having taken the Indian market by storm, farmers had\nvirtually stopped cultivating the variety needed to make Kanji. And the\nsubstitute was a combination of orange carrots and beetroot.
After\nan intensive search across geographies, they learnt that purple carrots\nwere being cultivated in southern Turkey. Hector Beverages, the parent\ncompany of Paper Boat, imported its seeds in 2014 and began cultivating\nin Udhagamandalam (formerly Ooty). Now, the first crop is ready, and\nHector Beverages is looking to add Kanji to its portfolio by this\nwinter.
“We want to be the reference taste for every beverage we\nlaunch. We also believe that if there is something better-tasting than\nour product, we will stop selling it,” says Kakkar, explaining why he\ndidn’t settle for the carrot-beetroot combination for his Kanji.
And\nthat is one of the pillars of the company’s disruptive business idea,\nwhich has helped Paper Boat become the preferred drink for many despite\nentering a market crowded by the Pepsis and the Cokes, as late as in\n2013.
The disruption<\/span>
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Devangshu\nDutta, chief executive at retail consultancy Third Eyesight, says Paper\nBoat’s innovative products and packaging have been a force of ‘creative\ndisruption’, and the company has been able to back that up with\ndistribution.<\/span>
“Paper\nBoat’s traditional Indian flavours and its differentiated packaging\ngive it a unique look at retail stores. The company has clearly gone\nafter market share and taken a penetrative approach. Whichever\ngeography they choose, they are going after it very aggressively. It is\nclear that they want to be a deeply penetrated mainstream product,” he\nsays.<\/span>
But making a mark wasn’t easy. Retailers were wary\nof stocking the products, fearing they wouldn’t be sold. And that’s\nwhen Paper Boat’s deployed its second disruptive strategy: a\nno-questions-asked return policy. “We gave our retailers the freshest\nof products and refunded them in full in case of returns,” says Kakkar.
Most\nlarge companies, in contrast, only refund a percentage of the money.\nBut Paper Boat’s ‘insurance’ cover on returns ensured that its Aam\nPanna, Gol Gappa and Aam Ras beverages adorned every retailer’s shelf.
The\nthird pillar of Paper Boat’s success has been customer-centricity: it\nsources the best quality raw materials from across the country. “We\nhave invested in quality function. Our aim is to be better than MNCs\nbecause being equal to them has no meaning,” says Kakkar.
Another\nfactor, which Kakkar believes has worked well for the brand, is its\ncommunication strategy. “Be it communication on TV or social media, we\nhave followed the same distinctive tone of nostalgia and innocence.\nOnce you speak the same language, people remember you better.”
The\nstories that the brand narrated were reminiscent of the way IndiGo\nairlines lovingly created stories for its Airwiches (sandwiches on\nair). Tellingly, Paper Boat beverages are served on board IndiGo,\nbringing two great storytellers together at 30,000 feet.
Paper\nBoat relies heavily on digital marketing, and its digital campaigns are\nas funky as the brand. On Instagram, it tells its brand story using\ncreative doodles, videos and photographs, cleverly using two puppies\nnamed Hector and Beverages to add fun to the storytelling.
“We are digital first and mass media second. We use the cheapest way to reach out to people,” says Kakkar.
The challenge<\/span><\/p>
“Niche\nmarketing is good as an early entry strategy, but if a brand wants to\nappeal to a slightly larger mass, which has the money, it cannot remain\nniche,” he says.
Today, ethnic flavour drinks have a nearly 50\nper cent share of the Rs2,000-crore juices category. Already, other\nbrands – Dabur Hajmola, Cocofly – are emerging, with ethnic flavours\nsimilar to Paper Boat’s. Copy-cats typically eat into the market share\nof the incumbent. Going forward, Paper Boat may have to reach out to a\nlarger audience in a tone familiar to them.
Dabur’s Hajmola\nYoodley is surprisingly capturing public imagination. It’s seen more on\nmodern trade shelves (which is not surprising, given Dabur’s FMCG\ndistribution strength) and is piggybacking on the familiar Hajmola\nbrand, which helps with customer connect.
Dutta\nbelieves that Paper Boat’s geographic footprint can grow over time, as\nhas been the case with some other players. “They have an adequate\npresence in certain geographies and they are not as strong in some\nothers just like many other FMCG brands. I think it is a matter of time\nbefore they expand,” he adds.<\/span>
Paper\nBoat, meanwhile, is also keeping a close tab on costs. It replaced\ntetra packs with a flexi pouch that uses just 8gm of plastic as against\n25gm for a pet bottle, making it cheaper by at least 50 per cent. “Even\ntransportation costs go down with this packaging,” Kakkar points out.
And\nprofitability, he says, is not a concern. “Ours is not a cash-burn\nbusiness. We continue to invest in growth and advertising (at the cost\nof profitability),” Kakkar adds.
For now, the company has\nsettled down to a strategy of having some year-long products like\nChilli Guava or Aam Panna and other temporary launches once a year like\nThandai during Holi, Panakam during Ram Navmi and Kanji for two months\nin winter.
So far, Paper Boat seems to have got its mix right.\nIts ability to continue to juice out success from its differentiated\nstrategies will, however, be tested over the next few years.
(With inputs from Chitra Narayanan)<\/span><\/p>