Ashwini Gangal
Interviews

"We don't promise consistency in taste over time": Neeraj Kakkar, Paperboat

Chatting with Neeraj Kakkar over a regular cup of coffee is a pleasant yet oddly paradoxical experience. After all, the CEO of Hector Beverages - and former Coca-Cola hand - sells drinks titled Kokum, Jamun Kala Khatta, Golgappe Ka Pani, Chilled Rasam, Aamras, Aam Panna, Jaljeera, etc., that are categorised as 'fortified, functional, non-carbonated beverages'.

The latest names on his list include Sattu (a Bihar-based drink), Kanji (made of carrots) and Neer Moor (Tamil Nadu-based drink), among others.

Currently, Karishma Lintas and Carat Media are busy putting together Paperboat's March-bound, TV campaign, for which the company has ear-marked around Rs. 10 crore. The objective is to grab share from the ready-to-drink beverage market, one currently dominated by colas and packaged fruit juices.

Kakkar co-founded Hector Beverages along with Suhas Misra, James Nuttall and Neeraj Biyani in 2009. Shripad Nadkarni, co-founder, MarketGate, a brand consultancy, has invested in the company.

Paperboat was born in 2013, until which time the parent company was best known for its energy drinks brand Tzinga.

Edited Excerpts.

Edited Excerpts

Paperboat is an unusual brand. What's your core consumer like?

We target 25-35 year olds, from SEC A, living in metros. Though we say we are a 'regional brand', our 'region' is the metros, really.

People from metros are exposed to international airports, large companies... they're exposed to the West... that's our core TG.

But, Paperboat offers ethnic Indian flavours... isn't that a contradiction?

No.

See, when it comes to food, we're used to consuming many different cuisines. But we don't behave similarly when it comes to beverages. For example, you may consume idli-dosa but you don't consume a traditional beverage with it. That's because when it comes to 'Indian' beverages, the options available are so limited. People either consume beverages like Coke, fruit juices or tea-coffee. We provide more options.

So while this consumer has an 'open palate', he/she also wants more choices when it comes to 'home food' or 'comfort food'... Paperboat gives them that.

Experts say a brand like Paperboat wouldn't have worked say 10, or maybe even five, years back. What makes the market ready today?

Consumer confidence.

I completely agree; Paperboat wouldn't have worked 10 years back. The fascination for 'foreign stuff' has changed. The brother from Canada is no longer perceived to be better off than the brother who stayed back in Chandigarh. This confidence of being comfortable in our own skin is very visible in cities like Bengaluru and Mumbai today. People are not so brand conscious anymore. They no longer do things just to gain the acceptance of others.

So you're saying, 10 years back, a consumer wouldn't want to be seen sipping packaged aam panna in public?

... Or a jaljeera.

Previously, the thought was: 'I want a drink which is far more... you know...'

... Cool?

Yes. If asked, 'So what do you drink?', 'Jaljeera' wouldn't be considered a good answer previously. Today, people will say it.

What kind of pre-launch consumer research do you do, before rolling out a new flavour?

We do not do formal consumer research.

We believe in the Lean Startup Theory, one that technology companies have adopted. The idea is to first give consumers a beta product in hand and then source feedback from them. We make products, put them in the market in the early stages, take consumer feedback and then keep improving.

Of our 11 products, one hasn't worked. Imli Ka Amlana - (a Marwadi product) - didn't work, so we changed the recipe once. It still didn't work. So we moved that product down.

We'll keep experimenting. If consumers don't like a product, we'll take it back and make a better one.

That's great, but how will you ensure consistency in taste over time?

We say this very openly - We do not promise consistency, quite unlike a Coke, which promises the same taste, every time, everywhere. Our promise is - We'll try to provide you with better taste every time.

All our recipes have undergone changes. Our recipe for Golgappe Ka Pani has been changed four times.

So your consumer research begins after you have launched a product...

Yes, social listening is a big part of it. We also source feedback from a panel of food critics and chefs. Shelf velocity, of course, gives us great feedback... there are certain outlets where trials are very high.

Which is your strongest touch-point? And which is the weakest?

Travel channels (airports and airlines), big modern trade chains (like Reliance, Big Bazaar, HyperCity, Food Hall and Nature's Basket) and office canteens work well for us.

The most difficult touch-point has been the neighborhood grocer. This channel has not picked up for us. The display mechanism is not very strong there. And unless people see the product, they won't ask for it, because many don't know about the brand yet.

Kirana stores stock products that their regular consumers ask for. So the challenge is to get consumers to ask their kirana guys for Paperboat. For this, we need to advertise and generate awareness around our products.

In a previous interview, you categorically mentioned that Mumbai has been a weak market for Paperboat. Why?

Distribution.

We haven't been able to crack the retail market distribution code in Mumbai.

Paperboat started marketing to the NRI community last February. What prompted this move?

The insight to market to Indians abroad came from the way Chennai reacted to our Jaljeera.

I had decided not to sell any Jaljeera in Chennai; I thought nobody would drink it. But, someone overruled my decision and sent 50 cases to Chennai. Six months down the line - surprise, surprise! The percentage of Jaljeera sold in Chennai was not a lot different from that sold in Delhi.

The hypothesis is - the farther the consumer is from home, higher the chances of picking up a product that reminds him/her of home. North Indians settled in Chennai loved our Jaljeera.

How do you know it's the North Indians settled in Chennai who're patronising your Jaljeera and not the Tamilians?

Tamilians are consuming it too.

But I say this based on observation. If, in Bengaluru, Paperboat sells more in a store in Whitefield - a market frequented by a cosmopolitan crowd - than in similar sized store in Jayanagar - a traditional market frequented by a 'Kannadiga crowd' - then you can assume the product is more popular among people who have come to the city from outside than among those who're from there.

Store profiling tells you a lot.