Barber Shop Episode with Kip and Akhil

Jun 24, 2024

Mindmap

Barber Shop Episode with Kip and Akhil

Introduction

  • Host Introduction: The typical Barber Shop episode focuses on entrepreneurs, business leaders, and CEOs, discussing their experiences and insights about their businesses.
  • Special Focus: The episode aims to dive deeper into understanding one's business inside-out, a crucial aspect for young entrepreneurs.

Guests: Kip and Akhil from ANV

  • Business Overview: ANV is in the Food and Beverage industry, focusing on high-quality, minimally processed food free from chemicals and preservatives.
  • Revenue: The company is three years old, clocking 70 crores in revenue.

Business Model and Products

Core Products

  • Ghee and Oils: Main categories, focusing on traditional manufacturing methods.
    • Ghee: Three types – Gir (Gujarat), Halikar (Tamil Nadu), Cream (mixed cow breed, A2 ghee)
    • Oils: Six types – Groundnut, Sunflower, Coconut, Mustard, Yellow Mustard, Sesame

Unique Selling Proposition (USP)

  • Production Methods: Uses traditional Bona methods for ghee and cold/wood press methods for oils, focusing on quality over quantity.
  • Supply Chain: Decentralized model to support rural employment; factories set up in specific regions for optimal crop growing conditions.

Business Metrics and Channels

  • Revenue Breakdown:
    • Own D2C website: 1 to 1.5 crores
    • Amazon: 2 to 2.5 crores
    • QuickCommerce (Blinkit, Zepto, Instamart): 2 crores
    • Retail (modern trade): 30 to 40 lakhs

Pricing Strategy

  • Comparative Pricing:
    • Oils: 2-2.5 times more expensive than refined oil, but comparable within the cold press category.
    • Ghee: Premium market segment about 6-7% of total market.

Operations and Impact

  • Farmer Engagement: Focus on generating employment and increasing farmer income.
  • Decentralized Factories: Small units close to sources, many run by local micro-entrepreneurs.
  • Quality Control: High standards, with batch testing and QR codes for transparency.

Financial Performance and Goals

  • Financial Tight Spot: Previously operating at a loss, now focusing on profitability.
  • Current Profitability: Achieved EBITDA positive status in January with 7 lakhs profit.
  • Future Goals: Aim to reach 11 crores monthly revenue with 4% EBITDA by next year.

Cost Management Initiatives

  • Inventory Management: Reduced from 90 days to 15-16 days.
  • Cost Reduction: Controlled costs while maintaining growth investments.
  • Profitability Mindset: Learning to grow while being profitable.

Market Trends and Expansion

  • Category Growth: Cold press oils and A2 ghee markets expanding rapidly, with larger FMCG companies entering the space.
  • Brand Focus: Decision to deepen expertise in ghee and oils rather than diversify into other food categories.

Future Strategies

  • Channel Expansion: Major focus on quick commerce and other online channels.
  • Cash Management: Healthy cash reserves and prudent financial management.

Closing Remarks

  • Entrepreneurial Insights: Emphasis on knowing core products, maintaining profitability, and managing capital efficiently.
  • Acknowledgment: Gratitude towards investors and supporters for their contributions and belief in the business. The impact aimed at improving the lives of rural farmers and producing high-quality, minimally processed food products.