Our success shows consumers are value conscious: Viraj Bahl

KFC, Burger King, Dunkin Donuts, Krispy Kreme, Domino’s, Pizza Hut –Veeba Foods Services is probably the only company which enjoys the legacy of working with competing clients. Founder Viraj Bahl, whose family had started Fun Foods and later sold it to German company Dr Oetkar, in an interview with Meenal Arora, talks about Veeba’s growth so far, future plans, among other things. The company counts DSG Consumer Partners, Saama Capital and Verlinvest among its investors.

Tell us more about Veeba.

Veeba was incorporated in 2013. I was very clear about the fact that Veeba will be a B2C (business to consumer) player. It takes time to establish a brand, a national distribution network. Before we reached that stage, we wanted volumes/scale. So we decided to go the B2B (business-to-business) route. It is still an essential part of our business. We are the leading supplier of sauces to Domino’s, Pizza Hut, KFC, Burger King, Dunkin Donuts, Starbucks, Cafe Coffee Day. In fact, we are one of the largest sauce (non-tomato ketch-up) manufacturers in the country. In 2016, we launched our retail brand.We are continuing to focus heavily on B2B but we are also acquiring new talent to focus on retail. In the next few years, high focus will be on B2B but future growth will come from B2C. That’s why you see large ad campaigns in print.

But advertising is very selective.

We have to be frugal with the ad spends. Our target group is reached by the magazine section. We cover about top ten cities but we are covering them via print.

You are catering to the top QSR chains and yet you don’t leverage that in your ads.

That business is very important. For example, the mayonnaise that we make for Dunkin Donuts differs from the one we make for Zinger (KFC) or for Burger King Whopper. We cannot put that in the market so there is no point advertising it. For example, we work with KFC and Burger King, Dunkin Donuts and Krispy Kreme, Domino’s and Pizza Hut. We are probably the only company which enjoys the legacy of working with two competing clients.

How big is the market for sauces, dips & dessert toppings?

No official study has been done for this segment. This market can be anywhere Rs 5,000-7,000 crore; it’s a rough estimate.

What is the compounded annual growth rate (CAGR)?

We don’t have a CAGR because we are not growing in percentages, but in multiples. In year-on-year terms, it’s late double digits or early triple digits.

How are you placed vis-a-vis competition?

In B2B we are doing very well. I think we are one of the largest players in India. In retail, we do not have any competition, we are about 3,4,5 steps above the other brands; our price points are higher as our philosophy is to give the best products possible, and if the product becomes slightly expensive in doing so, then be it. I strongly believe that ‘Indian consumer doesn’t want to pay money’ means that the consumers are value conscious, not stingy. They are happy paying a higher price for better quality & product. The success of our retail range kind of validates my position.

What is the B2B market share?

This is not formally tabulated. But we must have around high double-digit share, which is a lot considering there are 5-6 good players in India. So, we make it to top two or three definitely.

Can you please share some details about funding?

We don’t have any fund-raising plans for the future. We are well-funded and have got three of the best PE/VC funds. They—DSG Consumer Partners, Saama Capital and Verlinvest—are not only our investors but also our partners. Even if we require funding, I do not see myself going outside of what I call a family; probably stay within the family and talk to the same guys. But there is no immediate need. We have raised funds in mid-double digits.