How I Built a Healthy Snack Company and Sold It For 500 Crores

Summary

In this insightful episode, Swas Samat, the founder of the health snack brand Yoga Bar, shares the journey of building a D2C megabrand. Samat emphasizes the importance of creating value in people's lives and the brand's offline-first approach, detailing the challenges and strategies in penetrating the market through general trade and modern trade. The discussion also touches on the impact of COVID-19 as a tailwind event, accelerating the brand's online presence and consumer health consciousness. The packaging's vibrant, modern, and international design is highlighted as a key to its lasting appeal.

Takeaways

• 😀 Swas Samat founded a healthy snack company, Yoga Bar, which became a household name in India, known for its healthy bars and breakfast options.
• 🌟 The motivation behind starting the business was not primarily to make money but to create a product that adds value to people's lives and makes a difference to society.
• 🛫 Yoga Bar identified a gap in the Indian market for healthy packaged food, inspired by similar products found in the US, and capitalized on this opportunity.
• 🎨 The brand's packaging reflects the founders' personalities, focusing on colors that evoke happiness and a sense of modernity and international appeal.
• 🏪 Initially, Yoga Bar was an offline-first business, which was crucial for establishing a strong brand presence before expanding to other channels.
• 📈 The company emphasizes the importance of offline sales, as they are often more profitable than online sales, especially for food businesses.
• 📊 Offline success is measured by the sales team's cost being a reasonable percentage of the total sales they generate, aiming for around 20%.
• 🔄 The COVID-19 pandemic was a turning point for Yoga Bar, as it forced the company to pivot to online sales and expand its product range to cater to the increased health consciousness of consumers.
• 🛍️ Modern trade retailers, like dmart and Reliance, are selective about the brands they stock, requiring proof of market share and success in general trade before considering a new product.
• 📚 The company's growth strategy involved careful market selection, focusing on high-throughput stores, and ensuring that sales team costs were proportional to sales generated.
• 💡 Tailwind events, such as increased health consciousness during the pandemic, can significantly impact a D2C brand's success, providing opportunities for growth and expansion.

Q & A

What was Swas Samat's primary motivation for starting a healthy snack company?

Swas Samat's primary motivation was not to create a large business or make a lot of money, but to make a difference to society and add value to people's lives by offering healthy packaged food options that were not available in India at the time.

What inspired Swas to start the Yoga Bar brand?

Swas was inspired to start Yoga Bar after noticing the absence of healthy packaged food options in India, similar to the kinds of bars they used to eat in the US after yoga classes. The idea was solidified when they trademarked the name 'Yaba' upon their sister's suggestion.

How does Swas define the product Yoga Bar in terms of the emotions it evokes?

Swas defines Yoga Bar not just as a healthy snack bar but as a product that sells happiness. The emotional response they aim to elicit from consumers is a feeling of happiness when they consume the bar.

What was the initial strategy for building conviction in the Yoga Bar product?

The initial strategy involved self-belief and passion rather than a rational thesis. Swas believed in the product's potential to create value, and early proof came from selling in yoga studios and receiving positive feedback, which helped build conviction.

How did Yoga Bar approach the offline market initially?

Yoga Bar started by focusing on a specific region, Bangalore, and learning from the experience. They ensured that their sales team costs were kept to a maximum of 20% of the sales they generated to maintain a sustainable business model.

What is the significance of having a product in both dmart and Reliance stores?

Having a product in dmart and Reliance stores is a strong indicator that the brand has arrived and is a credible player in the category, as these retailers only stock products that have proven market share and consumer demand.

What is the general profitability ranking of sales channels for food businesses according to the transcript?

The transcript suggests that General trade (smaller stores) is the most profitable, followed by modern trade (large retail chains like dmart), and then online sales channels.

How did Yoga Bar ensure their sales team was effective in on-boarding new stores?

Yoga Bar trained their sales team to passionately communicate the product's differentiation and provided product kits to shopkeepers, effectively turning them into brand advocates and part of their marketing strategy.

What was the impact of COVID-19 on Yoga Bar's business model?

COVID-19 forced Yoga Bar to pivot to online sales as offline retailers shut down. This led to the expansion of product categories and a significant shift in the company's trajectory, making it more tech-focused under the guidance of Swas's husband.

What were the key design considerations for Yoga Bar's packaging?

The key design considerations for Yoga Bar's packaging were to make it modern, international, and colorful. The packaging was intended to evoke happiness and be relevant globally, with a design that has remained consistent and appealing for the last 10 years.

How did Yoga Bar leverage the increased health consciousness during COVID-19?

Yoga Bar capitalized on the heightened health consciousness during COVID-19 by emphasizing their product's health benefits, such as protein and fiber content, aligning with consumers' growing interest in healthier food options.