Offline surge: The Indian FMCG (Fast Moving Consumer Goods) industry has experienced a noteworthy 6 per cent growth in value during Q4 2023, primarily attributed to a 6.4 per cent increase in volume. 

This surge in volume indicates positive consumption patterns across various regions of the country, reflecting a robust demand for FMCG products at an all-India level, a Nielsen report suggests.

It is projected that online retail penetration will grow at an extraordinary rate, outpacing offline retail by 2.5 times in the next decade according to Deloitte.

New-age brands like YogaBar, Soulfull (now acquired by Tata) and Paperboat are opting for customer traction online, but also foraying into offline channels.

The reason brands choose a D2C (Direct to Consumer) presence as it gives them better control of margins, packaging and distribution as well as their brand narrative. But an offline route gives them more exposure and brand awareness, as well as retail partnerships.

Millet-based snack company Troo Good has marked a 66 per cent uptick in retail touchpoints in a year.

The brand, which counts CavinKare and Paper Boat as its competitors, was found in 2018 by Raju Bhupati as M for Millet.

Centred around their flagship millet chikki, Bhupati said the brand is doing better offline rather than online, where it has a 3-5 per cent share, due to its low-segment price point of Rs 5.

“I don’t think everything is online and D2C (Direct to Consumer) nowadays, as people still believe in the touch and feel offline retail offers. Our online channels is basically for consumers who are testing our products, and for those that know and have a sort of brand loyalty towards our products,” their founder Raju Bhupati told Republic Business.

The healthy snacks market size is expected to be worth around $58.6 billion by 2032 from $35.7 billion in 2022, growing at a CAGR of 5.2 per cent during the forecast period from 2023 to 2032.

Notably, the market size for millets is estimated to be $11.53 billion in 2024, and is expected to reach $14.43 billion by 2029, growing at a CAGR of 4.60 per cent.

According to Allied Research, The global millet snacks market is estimated to reach $3,736.6 million by 2031.

In terms of funding, Troo Good has raised close to $9 million in equity from OAKS Asset Management Capital and Sashi Reddi and his family office. 

“Currently, we are looking to raise around $25-30 million in funding…to accommodate our capital expenditure,” Bhupati said. 

The company is looking to raise around Rs 200 crores in its second round of funding ‘very soon’, he added.

In terms of financials, the brand is hitting almost Rs 100-120 crore at an annual run rate (ARR). 

The company has been EBIDTA positive for the past two years barring the COVID period despite the offline channel being capital intensive, Bhupati further said.

“We are doing around Rs 10 crore per month consistently which is about Rs 120 crore of ARR. We are always EBITDA positive as a company we are EBITDA positive, regardless of marketing and advertisement activities.”

Before 2023 was announced as the year of millets, Bhupati said the brand started including millet as a core ingredient in their products.

Troo Good has a presence in 50,000 retail touchpoints, which includes Kirana stores categorised in max and mini kiranas, apart from introducing a unique pan shop model which helps them replace sugary confectionaries  with millet chikkis.

But the brand has not yet explored modern trade as a channel for offline sales.

“We are now designing separate items of modern trade because the consumer mindset in the modern trade is very different. So they may not be able to appreciate this very low-priced product on the shelf,” Bhupati said.

Paper Boat, which primarily is into fruit juices and mixes, has raised $109.41M over 10 rounds. Their latest funding round was a Series D for $50.1M on August 25, 2022.

Headquartered in Bengaluru, the operating revenue of Paper Boat was over three billion Indian rupees in 2022, up as compared to the previous financial year.

In 2021, the brand launched some only-online products, but has an omnichannel presence with two manufacturing facilities, one in Mysuru and one in Manesar, Gurgaon.

The brand, available in more than 50,000 retail points, has monthly sales of 10 million pouches.

Meanwhile, Chennai-based Cavinkare Private Limited's operating revenues range is over Rs 500 crore for the financial year ending on 31 March, 2023. Its EBITDA has increased by 36.86 per cent over the previous year, with its salted and energy peanut snacks part of its range of personal care products.