Meet the New Snac(k)ing Happilo serves an exclusive range of nuts, dried fruits, organic seeds, dry roasted snacks, trail mixes, and festive gift hampers.
Happilo is a company that sells nuts, dried fruits, organic seeds, dry roasted snacks, trail mixes, and festive gift hampers.
How this entrepreneur is making us MU(N).
Vikas D. Nahar was raised in Sakleshpura, a small village in Karnataka that is famous for its tea, coffee and spice plantations. His father was an entrepreneur who grew coffee and other commercial products. Nahar moved to Bangalore in 2000-02, where he graduated from Bangalore University. In 2005, Nahar joined his brother’s business in Bangalore as a graduate. He eventually became the head of all international business. The business was primarily domestic, focusing on the trading of spices that were either grown in India or imported from around the world.
Nahar spent the three years between 2005 and 2008 establishing his international business. Nahar spent this time traveling to China, Vietnam and Sri Lanka to import spices from Southeast Asian countries into India, as well as exporting them to the UK. Nahar, who was preparing for the CAT exam, took a short break to complete his MBA in 2008 at Symbiosis Centre for Management and Human Resource Development. Nahar studied marketing at the Symbiosis Centre for Management and Human Resource Development in Pune from 2008 to 2010. During this time, he was able understand why certain brands command higher prices, greater affinity or loyalty. Nahar recalls that his desire to build a brand began immediately after he completed his MBA. After I returned to Bangalore, I spent six months trying to figure out what I wanted to do, as building a business and being an entrepreneur were the things that had me stuck. He decided to not accept any job offer, and instead start his entrepreneurial journey.
Nahar started his first retail venture in 2011 called Satvik Specialty Foods. It sold gourmet products such as high-end chocolates and sugar-free chocolates. They also offered a variety of snacks that were high quality, including sugar-free snacks. Many aspirational items, that one would either want to gift or use for a novelty and premium, were sold. This included a large number of gift bags and hampers, and products from 30-40 different countries. Nahar says, "I was fascinated at the time by the market for healthy snacks and dry fruit snacks."
"I thought that if someone from India could build a brand in this category, perhaps investing in technology, backend, packaging, and product innovation, we can build a brand. "I have always worked in the food business and this was an opportunity that we could not miss," he says. Nahar left the retail business in 2015. He worked for 2-3 brands for an year and a half to gain experience in the distribution business. He was also working on his own brand. Nahar recalls, "I had a limited amount of capital, I only had INR 10,000 to launch my brand Happilo around the end of 2016 quarter, in September and October. I went to BigBasket as the first launch. After the initial launch, Nahar went to several cities to find distributors. Happilo offered a range of exclusive nuts, dried fruit, organic seeds and dry-roasted snacks. They also had festive gift hampers, trail mixes and dry-roasted snacks.
"I wanted to see 2-3 traditional dry fruit stores or merchants in every city. I wanted to become that national Meva Vala.
"People are always looking for the best value, but I wanted to create a premium brand that could be the biggest brand not just in India, but also around the world. I wanted to see 2-3 traditional dry fruit stores or merchants in every city. I wanted to be that national store, where we were available at all touchpoints: railways and airports, airlines and travel retail, vending machine, supermarkets or hypermarkets; modern trade, ecommerce, quick commerce, our own website, stores. Nahar aspires to become the national Meva Vaa.
They then went to Hyper City which was at the time a popular hypermarket. Nahar recalls the initial challenges: "We ended up only supplying 50% of the stock they requested because we didn't really have the capital." We got a positive response, and we went on to Reliance. Amazon was in India in 2016 and they were waiting for it to happen. We created the category together with them, as there were no brands in the category and the platform itself was new. They were also welcoming new brands and sellers. We launched it on Amazon in 2016. In 2017, the business began to mature and the brand started being taken to all modern trade outlets and ecommerce marketplaces.
After Walmart acquired Flipkart in 2019, they began focusing their efforts on the grocery sector. Happilo again was in charge of building the category together. Today, we are one the most searched keywords on Flipkart. Nahar claims that this is second only to Cadbury when it comes to search volume. The brand is currently available in over 10,000 stores. It aims to reach 1,00,000 in 12-18 months, by increasing 100% each year since its inception. Hapillo's initial launch was built to face the challenges that a bootstrapped start-up would have.
Nahar says, "When I first started my company, I got a lot from my wife. I think I spent around 10,000 INR. She gave me INR 20 lakh of our savings to start the business. This was a sort of seed capital, but also a debt that I had to pay back within three years. After that, I became a beneficiary of CGTMSE. It was through events organized by JITO & SIDBI that I found out about the scheme. I knew we would get collateral-free loan of up to a crore for startups founders who are looking to start their own business. So, I was able to get INR 75 Lakh. "I invested all the money I had in 2017-18 into automation, trying to improve the technology and packaging parameters and build on back-end.
The brand was able to generate INR 200 crores of revenue within the first four year period by working from scratch. The brand was able to raise INR100 crores in the first Series-A round from A91 Partners by 2021, the fifth year. Motilal oswal invested INR 180 crores in the company last year.
The COVID Trigger
COVID left the business with a large amount of inventory. Nahar recalls, "We were trapped for 15 days with millions of inventory and hundreds of team-members whom we could not pay salaries to at all."
"We faced a difficult situation for 15-20 days. But as the business grew, e-commerce exploded. We were the biggest brand available on ecommerce. We went to the commissioners to convince them that this was an essential product. People at home wanted to eat healthy food and build immunity. Happilo is only a product which is better, healthier and good for people. We went to them and convinced them.
After much deliberation, and after 2-3 visits, we received limited passes that allowed us to restart the business. After that, there was no turning back. We never took a weekend or Sunday break in the following two years. We built and expanded the business. We never reduced or debited salaries. In fact, we paid everyone on time. We were able increase our staff by 3X, from 100 to $300 by the end COVID. Our revenue increased by 4X as well. Covid-19 was the catalyst for accelerating growth, as consumption of healthy snacks and brands increased. Happilo was one of those healthy brands.
Nahar's international ambitions are described as follows: "After achieving some success, perhaps just one or two percent of what we could do, now we have global aspirations. We want to become a global brand of dry fruit snacks. We are coming from India. "In fact, to achieve this aspiration, in May we will launch the Dubai operations, and in the next 2-3 months, plans are in place for the US."
Currently, the company operates two factories. Another one is expected to be operational in the near future. In the future, they plan to launch a number of innovative products with dry fruits at their core. All products are healthy and non-fried. They use US technology that makes the products air-roasted and increases shelf life. The 20,000-square-foot R&D centre works on new innovative products. Nahar's transition from a traditional brand to a D2C one was not difficult.
The Year of Incorporation is 2016
Team Size: 660+
Equity Capital Raised: $25Mn Dollar
A91 Ventures and Motilal Oswal Private Equity are key investors
Stores available in: 10,000