 "Nature's Basket nurtures its own")
Godrej Nature's Basket, the 11-year-old gourmet food chain, is banking on a band of in-house brands to add speed to its sprint towards profitability. The chain has five within the fold - Desi Nature, Get Nature's Best, World Chef, L'Exclusif and Healthy Alternatives - and has plans to develop a few more.
The brands are expected to deliver higher margins and build a deeper connect with consumers looking for a healthy lifestyle. Importantly, these will also help the store sidestep the fractured supply chain of imported foods in the country.
The store says it is encouraged by the response to these brands and sees a visible shift in consumer tastes which has led to a sharper focus on labels such as L'Exclusif and Healthy Alternatives. "Our ambition is to grow Healthy Alternatives to 25-30 per cent plus over the next two to three years," says Avani Davda, the 36-year-old managing director of the company.
Set up in 2005, Nature's Basket has 37 stores in five cities. It houses food labels from around the world. From Thai sauces to Swiss cheese, the store is known for its expensive imported fare. The focus on in-house brands helps the store reduce its dependence on imported labels and thereby exercise greater control over supply and price.
Avani Davda says the chain is nurturing four to five brands which will be developed further after gaining sufficient customer feedback. The new brands, she hopes, will accelerate the growth process. The chain has managed to clock same store sales growth of 20-22 per cent, but is aiming for 25 per cent says Davda. Though the chain is yet to break even, she says the individual stores are profitable. Speaking to Business Standard in April last year, Mohit Khattar, the then managing director of the company had said that stores more than three years old were profitable. He expected that at the EBITDA level, stores would be profitable cumulatively by FY17.
Select clientele
The organic and natural food brand Healthy Alternatives and the savouries, ice-creams and gourmet jams and sauces brand, L'Exclusif, have both been in the incubator for a while now. Their products have managed to gather a small but loyal clientele, which has led to the heightened focus on these brands and their label being extended to a wider range of products.
The store believes that changing customer preferences augurs well for the future of these brands. According to a recent survey by market research and analytics firm, Nielsen, three-quarters of global respondents strongly or somewhat agree that they're concerned about the long term health impact of artificial ingredients, with the highest level of agreement in Asia-Pacific (80 per cent).
Healthy Alternatives, a snack brand, has about 90 stock keeping units (SKUs) and sells products such as organic grocery, natural fruit chips, gluten-free super-grain pastas and floral honey under its label. (SKU is a machine readable bar code that acts as a unique identifier for each product.) Davda, former CEO of the Starbucks Tata joint venture says that all the products under the brand are currently sourced locally. But she says, in the future, it will be a mix of local as well as international products. "Our customers told us that they want healthy snacks but it is very difficult to get them. That's the idea behind the brand," she says.
Nature's Basket is not the only chain offering healthy snacking options. Foodhall, owned by the Future group, offers similar products as do a clutch of online stores. The head of a competing Mumbai-based retail chain says that organic food as a category is struggling in the country and growing this will be tough.
Davda agrees, but says they will work hard on it. "We are working on our vendors, suppliers and farmers to come out with better products," she adds. She says the chain is also looking to launch Nature's Kitchen, a ready-to-eat foods brand soon.
Managing perceptions and supplies
Nature's Basket has traditionally been associated with expensive products and fresh produce. But Avani Davda believes that the store is not just for the affluent. "We are a destination neighbourhood food store known for finest, curated products," she says.
Even if the store does manage to convince a larger number of customers about its mass appeal in the coming months, it still has to contend with the problem that plagues other stores of its ilk. Many in the industry say relying on importers is a tricky preposition as supplies are not consistent. Thus developing a strong suite of in-house labels may help keep a tight control over the supply chain.
Davda does not agree that this is the core purpose of developing these in-house brands. Such brands, she says, have an edge over others given that the range and assortment in each category is large and they are curated and developed with a lot of research. Besides, the store is not as dependent on imported labels as it buys just about 30 per cent from importers, she adds.
She believes that the chain needs to nurture these labels, not because they will help tackle a supply problem but more because of the huge potential they represent. As consumers change the way they eat, she believes these brands could ride the wave and even sell in stores outside the chain in the future. Until then, Godrej Nature's Basket will continue to nurture them under its retail wing.
The brands are expected to deliver higher margins and build a deeper connect with consumers looking for a healthy lifestyle. Importantly, these will also help the store sidestep the fractured supply chain of imported foods in the country.
The store says it is encouraged by the response to these brands and sees a visible shift in consumer tastes which has led to a sharper focus on labels such as L'Exclusif and Healthy Alternatives. "Our ambition is to grow Healthy Alternatives to 25-30 per cent plus over the next two to three years," says Avani Davda, the 36-year-old managing director of the company.
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Avani Davda says the chain is nurturing four to five brands which will be developed further after gaining sufficient customer feedback. The new brands, she hopes, will accelerate the growth process. The chain has managed to clock same store sales growth of 20-22 per cent, but is aiming for 25 per cent says Davda. Though the chain is yet to break even, she says the individual stores are profitable. Speaking to Business Standard in April last year, Mohit Khattar, the then managing director of the company had said that stores more than three years old were profitable. He expected that at the EBITDA level, stores would be profitable cumulatively by FY17.
Select clientele
The organic and natural food brand Healthy Alternatives and the savouries, ice-creams and gourmet jams and sauces brand, L'Exclusif, have both been in the incubator for a while now. Their products have managed to gather a small but loyal clientele, which has led to the heightened focus on these brands and their label being extended to a wider range of products.
The store believes that changing customer preferences augurs well for the future of these brands. According to a recent survey by market research and analytics firm, Nielsen, three-quarters of global respondents strongly or somewhat agree that they're concerned about the long term health impact of artificial ingredients, with the highest level of agreement in Asia-Pacific (80 per cent).
Healthy Alternatives, a snack brand, has about 90 stock keeping units (SKUs) and sells products such as organic grocery, natural fruit chips, gluten-free super-grain pastas and floral honey under its label. (SKU is a machine readable bar code that acts as a unique identifier for each product.) Davda, former CEO of the Starbucks Tata joint venture says that all the products under the brand are currently sourced locally. But she says, in the future, it will be a mix of local as well as international products. "Our customers told us that they want healthy snacks but it is very difficult to get them. That's the idea behind the brand," she says.
Nature's Basket is not the only chain offering healthy snacking options. Foodhall, owned by the Future group, offers similar products as do a clutch of online stores. The head of a competing Mumbai-based retail chain says that organic food as a category is struggling in the country and growing this will be tough.
Davda agrees, but says they will work hard on it. "We are working on our vendors, suppliers and farmers to come out with better products," she adds. She says the chain is also looking to launch Nature's Kitchen, a ready-to-eat foods brand soon.
Managing perceptions and supplies
Nature's Basket has traditionally been associated with expensive products and fresh produce. But Avani Davda believes that the store is not just for the affluent. "We are a destination neighbourhood food store known for finest, curated products," she says.
Even if the store does manage to convince a larger number of customers about its mass appeal in the coming months, it still has to contend with the problem that plagues other stores of its ilk. Many in the industry say relying on importers is a tricky preposition as supplies are not consistent. Thus developing a strong suite of in-house labels may help keep a tight control over the supply chain.
Davda does not agree that this is the core purpose of developing these in-house brands. Such brands, she says, have an edge over others given that the range and assortment in each category is large and they are curated and developed with a lot of research. Besides, the store is not as dependent on imported labels as it buys just about 30 per cent from importers, she adds.
She believes that the chain needs to nurture these labels, not because they will help tackle a supply problem but more because of the huge potential they represent. As consumers change the way they eat, she believes these brands could ride the wave and even sell in stores outside the chain in the future. Until then, Godrej Nature's Basket will continue to nurture them under its retail wing.