National Capital RegionBUSINESS:
Functional BeverageFOUNDED IN:
October 2009LED BY:
Neeraj Kakkar, Suhas Misra, James Nuttall, Neeraj BiyaniCOOL QUOTIENT:
A great-tasting energy drink with a crazy name
Ask Bala Dutt Sharma what the favourite beverage of customers is at the canteen he runs at MDI (Management Development Institute), Gurgaon, and he replies: "Tzinga." He is not being facetious. The weird-sounding word is, indeed, the name of an energy drink made by a start-up
whose own name is equally intriguing, Hector Beverages.
The company was the outcome of a meeting between Neeraj Kakkar and Suhas Misra in 2009. Both had previously worked with Coca-Cola India, Misra till 2006 and Kakkar till 2008.
"We connected well over our shared passion for beverages and started discussing how India lacked a good option in functional beverages," says Misra, now Hector Beverages' Chief Marketing Officer. "As the night ended, we were both sure of our next move."
They put in their own funds, and began scouting boutique research and development firms in Europe for a "magic" formula that would provide an affordable energy drink that "did not taste weird", as Misra puts it. "The trick was in getting the taste, price and packaging right," he adds. They finally settled on one such formula, adding their own touch to it with natural ingredients such as lemon and ginseng and choice fruit flavours - all three variants of Tzinga taste of different fruit. They also expanded their team.
Kakkar brought in James Nuttall, a batchmate at Wharton. Nuttall, who had worked on flexible packaging technologies at Dow Chemicals, joined as a co-founder, while Neeraj Biyani, another former Coca-Cola employee, became the fourth co-founder. Biyani took one sip of Tzinga while it was still being tested and liked it so much that he, too, jumped in to the venture.
Another major source of support was Shripad Nadkarni, again formerly with Coke, and since then co-founder of MarketGate, a marketing consultancy, who helped with go-to-market strategies, apart from investing in the company in his personal capacity. While the co-founders together put in Rs 2 crore, they got another Rs 3.5 crore from angel investors and Rs 30 crore from venture capital funds Footprint and Catamaran.
Kakkar says energy drinks in India are projected as premium products and consumed mostly by athletes, gym enthusiasts and socialites - rarely by the average citizen. They are costly, primarily due to high import duties. Thus Red Bull
, which controls almost four-fifths of India's energy drink market, costs Rs 95 for a 250 ml can. Tzinga, in comparison, produced locally, costs Rs 25.
Hector Beverages is now expanding, as demand for Tzinga rises. It is already the top-selling energy drink in Goa and the north-eastern states, and the founders plan to increase its presence in the country's top 30 cities. It has a manufacturing facility at Manesar, near Gurgaon, and will soon start another one close to Bangalore.
The Manesar plant can produce 170,000 cases of 12 packs each a month. The new one will be bigger, with a monthly capacity of 500,000 cases. The founders refuse to disclose revenue or profit numbers, but say Tzinga currently sells a million packs a month. Having relied so far only on word-of-mouth publicity, Tzinga will now also launch a television campaign, says Kakkar.
The founders are well aware that they are up against formidable odds. Their zany website itself states: "Hector Beverages is a foolish idea. A new entrant, in an unproven space, out to take on giants with the deepest of pockets." It adds that even the company name, Hector Beverages, reflects their situation - according to Greek mythology, Hector, the Trojan prince, was killed by the Greek warrior, Achilles.
But history need not repeat itself - Hector may well prove a winner in the 21st century. The energy market is already at Rs 500 crore and growing at 40 per cent a year. "We know that Achilles does not have the most powerful heels," says the website.