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.

HOW THIS ENTREPRENEUR IS MAKING US MU(N)CH BETTER

Vikas D Nahar was born in a small town, Sakleshpura in Karnataka, which is known for tea, coffee, and spice plantations. His father was a farmer, largely into farming coffee and other commercial produce. As Nahar grew up, he shifted to Bangalore for higher education in 2000-02 for his graduation from Bangalore University. In 2005, he joined his brother's business as a graduate trainee there. And eventually went on to lead the entire vertical of international business. The business was more domestic in nature largely into trading of spices, which were grown in India or bought from other parts of the world.

From 2005 to 2008, Nahar spent three years establishing the entire international business. During this period, Nahar traveled to countries like China, Vietnam, Sri Lanka, and other countries importing a lot of spices from Southeast Asian countries to India and also exporting spices of the south to the UK and other countries. During this period, while preparing for CAT exams, Nahar took a break in 2008 to do his MBA at Symbiosis Centre for Management and Human Resource Development. From 2008 to 2010, while pursuing his MBA in Pune in marketing, Nahar was able to understand why some brands demand more prices, more affinity, or more loyalty than any other product. Talking about his interest in building a brand, Nahar reminisces, "The aspiration of building a brand came immediately after my MBA. Once I came back to Bangalore, I took a six months break to try and understand what exactly I want to start up, because building a brand and being an entrepreneur had stuck me there." That's when he decided not to go for any placement offer and begin his entrepreneurial innings.

In 2011, Nahar launched his first retail venture called Satvik Specialty Foods; it was largely selling gourmet products like high-end chocolates, sugar-free chocolates, dry fruit snacks, a lot of high-quality snacks, and sugar-free products. A lot of aspirational products, which one would want to either gift or use as a premium and novelty largely, creating a lot of hampers and gift bags for customers and sold products from around 30-40 countries. "During that time, I was actually quite fascinated by the healthy snacking and dry fruit snack market," shares Nahar.

"When I thought if somebody from India can actually build a brand out of this category, maybe invest in technology, backend integration, packaging and product innovation can actually build some brand out of it. I have always been in the food industry and it was a great opportunity for us to seize," he adds. In 2015, Nahar exited the retail venture. In an urge to learn the distribution side of the business, he worked for oneand- a-half years for 2-3 other brands. Parallelly, he was working on launching his own brand. "I didn't have much capital at my disposal, with just INR 10,000 I launched my brand Happilo in 2016 in the last quarter around September-October and went to BigBasket for the first launch, recalls Nahar. After the initial launch in six cities, went to multiple cities to appoint distributors. Happilo served an exclusive range of nuts, dried fruits, organic seeds, dry roasted snacks, trail mixes, and festive gift hampers.

"I had the aspiration that every city has 2-3 dry fruit merchants or stores, which are largely traditional. I wanted to be that national Meva Vala.

RETAIL FORAY

"People always look for value for money, but I always wanted to build that aspirational premium brand, which can actually be the largest brand in India and not only India but across the globe as well. I had the aspiration that every city has 2-3 dry fruit merchants or stores, which are largely traditional. I wanted to become that national store where we are available across all touch points be it railways, airports, airlines, travel retail, vending machines, or wherever in supermarkets, hypermarkets, modern trade, e-commerce, quick commerce, own website, own stores. I wanted to be that national Meva Vala," aspires Nahar.

From BigBasket, they went to Hyper City, which was a popular hypermarket at that time. Talking about the initial challenges, Nahar says, "We actually ended up supplying only 50% of the inventory they asked for since we didn't have that much capital. But we got a good response and further went to Reliance. Amazon was waiting to happen in India at that time in 2016. We were responsible to create the category with them because there was no brand that existed in the category itself and the platform was very new. So they were also welcoming all the new brands and new sellers. So we launched it in 2016 on Amazon itself." From 2017 onwards the business started maturing and the brand was taken to every modern trade outlet and e-commerce marketplace.

In 2019, after the acquisition of Flipkart by Walmart, they started focusing on the grocery division. Again, Happilo was responsible to build the category with them. "Today we are one of the largest searched keywords on Flipkart. This is only second after Cadbury in terms of search volumes," claims Nahar. Today, the brand is available in more than 10,000 stores and wants to expand to 1,00,000 stores in the next 12 to 18 months by growing 100% year on year from the year of inception. The initial start of Hapillo was built with the struggles a bootstrapped startup would face.

Nahar mentions, "When I started the company with around INR 10,000, actually I had a lot of backing from my wife. She gave me our life savings of INR 20 lakh to actually set up the initial phase of the business. So that acted more like a seed capital but was also a kind of debt for me that I returned back in three years. And after that, I was a beneficiary of the government scheme CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises). I learned about it through some events organized by JITO and SIDBI. I knew that we will get collateral-free loans of up to one crore for startup founders who want to build their own business. So I benefited from that I got INR 75 Lakh. I invested the entire money in 2017-18 in investing in automation trying to build on technology back-end and improving on the quality and the packaging parameters."

However, the brand managed to clock INR 200 crore of revenue in the first four years by remaining bootstrapped. In the fifth year, they were able to raise INR 100 crores from A91 partners in 2021 as the maiden Series-A round. Last year, Motilal Oswal also invested close to INR 180 crore in the company.

THE COVID TRIGGER

When COVID happened the business was stuck with a lot of inventory. "We were stuck for 15-20 days with crores of inventory, stuck with hundreds of team members whom we couldn't pay salaries and all," remembers Nahar.

"We had that tough situation in the 15-20 days, but as things moved e-commerce opened up. We were one of the largest brands available on e-commerce and we went to the commissioners and convinced them that this is actually an essential product and people at home want to eat something nutritious, and healthy and want to build immunity because Happilo only falls in a product, which is good for you, better for you and healthier for you. So we actually went there and convinced them.

After a lot of deliberation and 2-3 visits, they gave us limited passes for which we were able to start the company again. And there was no looking back after that, we never took a Sunday or a Saturday break for the next two years. We built the business and grew it further. And from being a 100 odd people team and worried about how do we pay salaries, we never debited any salaries or reduced any salaries, in fact, paid everybody on time. And we're able to increase our manpower by 3X from 100 to 300 by the end of COVID and we are able to increase our revenue also 4X," notes Nahar. Covid-19 was a catalyst in terms of accelerating growth because the consumption increased for healthy snacks and healthy brands and Happilo stood out.

On international foray, Nahar says, "After achieving a little bit of success, maybe just one or 2% of what we can actually do, we now have global aspirations, we want to be a global dry fruit snack brand. We're coming out of India. In fact, for that aspiration, we are actually launching the Dubai operations in May, and plans are underway for the US also in 2-3 months down the line."

The company currently operates two factories and another one will be operational very soon. Going forward, they will be launching a lot of innovative products in terms of product pipeline keeping dry fruits as the core of every new product. All the products are non-fried with zero cholesterol and goodness of health. The technology they work on comes from the US, which makes products completely air roasted and improves the shelf-life. Their R&D center of 20,000 square feet works on innovative new products. Seems like moving from a traditional foray to building a D2C brand wasn't a tough nut to crack for Nahar.

FACTS

>> Year of Incorporation: 2016

>> Team Size:660+

>> Equity Capital Raised: 25Mn dollar

>> Key Investors: A91 Ventures, Motilal Oswal Private Equity

>> Stores available in: 10,000

>> Online v/s offline revenue split: 60:40