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How Honey Money Top is creating alchemy in perishables

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The retailer has built the brand on its expertise in the perishables category and today Honey Money Top stores enjoy a reputation for their wide and eclectic assortment in fresh fruits and vegetables

New Delhi: Honey Money Top started its retailing business way back in 1997 when it opened its first store in Delhi’s New Friends Colony. The retailer has since assiduously built on its expertise in the perishables category and today Honey Money Top stores enjoy a reputation for their wide and eclectic assortment in fresh fruits and vegetables.

The biggest chunk of customers at Honey Money Top stores come for their range of fruits and vegetables, which is very uncommon for a supermarket where food and consumer packaged goods are the top draws. With over 22% of total store sales coming from fruits and vegetables, the focus of all Honey Money Top stores has always been on building up the other categories around fruits and vegetables.

The retailer is now readying itself for its next phase of expansion with aggressive plans for pushing its retailing model around perishables to small-format stores and partnering with other retailers through the Shop-in Shop business model.

Soon after the plush 12,000 sq. ft. Markketo superstore opened in south Delhi’s Malviya Nagar a little over a year ago, it realized that managing its perishables category comprising fresh fruits, vegetables, and assorted greens was no tame affair. The store, known for its much vaunted assortment across different categories, wanted to bring some pep and pizzas to a category known to be notoriously difficult to handle.

It’s an open secret that whereas margins on the standard packaged goods stretch in the range of 4-15%, fruits and vegetables are known to offer juicer margins and a drooling rate of return on the investment. But perishables as a category are prone to a lot of wastage and spoilage, making it a problematic category for many retailers.

Luckily, Markketo did not have to look long and hard to find an ideal partner. Taking the Shop- in-Shop (SiS) approach, it brought on board Honey Money Top, a retailer in Delhi-NCR with over 25 years of experience and a storied pedigree dealing in premium fruits and vegetables.

The retailer has the distinction of serving as the official food service partner for the annual Formula One Indian Grand Prix held at The Buddh International Circuit, Greater Noida, in 2013. “Apart from our own Honey Money Top stores, we supply fresh fruits and vegetables to many other retailers, companies and institutions in Delhi-NCR, including Google. We supply about 1,600 kg of fresh fruits and vegetables per day worth Rs. 1 lakh to Google’s corporate office in Gurgaon,” says Nalin Kumar Gupta, Group Promoter, Honey Money Top.

Honey Money Top’s Shop-in-Shop at Markketo has a very simple business model wherein the latter gets to earn a handsome commission from the sales without making any investment apart from offering space within its store set-up. “It’s a very simple revenue-sharing model where they earn a fixed commission from the sales, which happens through their system. The balance comes to us,” says Namit Gupta, Partner & Director, Honey Money Top.

At Markketo, Honey Money Top runs its branded fruits and vegetables shop and this entire gamut of operations is run and managed by the latter, which includes everything from sourcing to selling, stocks to staffing, and supply chain and logistics.

“For any retailer who wants to sell perishables but does not want to get into the nitty-gritty of managing and maintaining the category, Honey Money Top through the SiS model can offer a perfect bail-out from dealing with wastage, assortment, grading and sorting, and other complexities associated with the category,” says Namit, adding that his brand offers complete end-to-end solutions to any retailer wanting to add fruits and vegetables in its product portfolio and looking for better returns from the category.

Driving higher shopper conversion
The SiS model has so far been a win-win commercially for both Markketo and Honey Money Top, besides offering consumers a better value and choice of products. “Within 3 months of getting in on the act, we were able to pull off a complete turnaround with sales climbing nearly three-fold to over Rs. 8.5 lakh a month,” says Namit.

What’s even more amazing is that Honey Money Top was able to lend its Midas touch to a space that was just about 25 running feet. “Normally, at our own stores, perishables take up about 40 running feet but the space is much smaller in a SiS model but we have the expertise to customize the business and operations as per the availability of the space,” notes Namit, pointing out that it has customized the SiS concept for two other retailers with whom it has partnered with in Delhi – one in Kailash Colony and another one near Dwarka.

So, how did Honey Money Top blaze such gangbusters growth for a category that Markketo felt it had no launchers or boosters to propel a lift-off?

“As we have built up our expertise in fruits and vegetables sourcing and retailing, we are in a position to provide better value-addition and a stronger revenue model for this category to any other retailer wanting to transform its fruits and vegetables business,” says the 26-year-old Sumit Gupta, the youngest member to have joined the family business at Honey Money Top as Director.


Acknowledging its expertise in the perishables business, Markketo allowed Honey Money Top to do its own branding and marketing within the allocated space, which may be a bit unconventional for a SiS model. “I feel that for any retailer to get the best out of the SiS model, it is important to give the freedom of branding and marketing to its SiS partner. If we have the marketing support, we can come out with our own consumer offers, bill-busters, free sampling and freebies, social media campaigns, all of which have a rub-off effect on the category sales and traction. In a way, we are doing co-branded marketing but without entailing any cost for the principal retailer who gets to reap many benefits from our own exercise,” explains Namit.

At Markketo, where Honey Money Top has the option to carry out its own marketing, it got off to a great head start straight away. “We began by working on the assortment and its display. We focused on making the assortment more extensive and visibly vibrant in tune with the catchment’s varied demand- and -order pattern,”shares Namit, adding that it is important to have a diverse and eclectic range in the perishables category to successfully pull in more customers looking to get their hands on products that come with the assurance of availability, freshness, and quality.

Apart from building up the assortment and displaying it in a visually appealing way, Honey Money Top also worked on improving its packaging, which had a positive knock-on effect on its home delivery service model. “People want to touch and feel their fruits and vegetables before buying. But once they saw the quality of our fruits and greens and how we did the packaging for home delivery, it boosted their confidence and they began placing orders for home delivery of products,” says Namit.

The exercise, in totality, had a dramatic effect leading to a marked increase in footfalls and delivery orders as well as a conspicuous surge in customer engagement and activity within the category. “There was a significant uptick in category conversion with many shoppers visiting the store eager to try out our fresh fruits and vegetables leading to a three-fold jump in category sales. Overall, from a 4-5% category conversion rate, the number inched up to 9.5%,” says Namit.

“At the same time, we also set about to launch our own marketing programs and schemes for the category, making use of our social media handles and by working on the data coming to us through the sales funnel. For customers ordering above a certain bill value, we offered them a complementary gift box, and we also conducted our sampling exercises by offering slices of fruits to customers to taste, all of which led to greater customer interactivity and a spike in sales besides boosting customer trust in our products,” says Namit.

With diverse palates to cater to and because customers typically have very peculiar tastes bordering on the fussy and even downright idiosyncratic, customer interaction and interactivity becomes an important part of the fruits and vegetables business.

“We have very consciously and painstakingly built our expertise in this business and we are very particular about sorting and grading our fruits according to their state of ripeness so that we can cater to all kinds of customer’s demands and preferences, whether it’s for under-ripe, semi-ripe, ripe or over-ripe fruits. We make sure to ask the customer if she wants a ripe fruit to be consumed the same day or a semi-ripe fruit to be eaten three days later and it’s these small details that have become the hallmarks of our quality and expertise in the trade,” avers Sumit.

As part of its marketing strategy, Honey Money Top’s shop-in-shop at Markketo also has a sales promoter whose job is not to promote sales but offer customers a sample of fruits they want to buy so that they can taste and feel the difference in quality compared to fruits sold by vendors in the neighborhood. There’s also a ‘karigar’, a specialist with decades of experience in handling fruits and vegetables. “Their understanding of fruits and vegetables exceeds the knowledge that consumers and even retailers have and their job is to sort and grade the fruits according to their ripeness and quality,” says Sumit.

Citing an instance of how customer whimsy comes into play in the fruits and vegetables category, Sumit shares an interesting anecdote that holds out some valuable learnings for retailers in this business.

“We had a geriatric customer who also suffered from a tooth problem and bought only overripe fruits. Our sales guy made sure he was given only over-ripe fruits, which he would take away happily. One day, when the regular sales guy had gone on a leave, the customer came visiting and he was offered a ripe fruit in a pristine state. But a few hours later, he returned to complain that he was fobbed off with a bad product. We asked the new guy to be extra careful with the customer and he was given a perfectly ripe fruit again the next day. But to his shock, the customer again came back spewing vitriol about the bad quality of the fruit. He stopped coming and it was only when the regular sales guy returned did we come to know that he was given to eating only over-ripe fruits.”


Retailing journey in the early years
When the first Honey Money Top store was about to be launched, the Guptas paterfamilias laid out the brand name and sought the family’s reaction. “None of us could see the logic behind the name and seeing the bemused look on our faces our grandfather explained: Honey denotes sweetness and as a retail business we will strive for cultivating a sweet relationship with our customers; Money stands for the brand’s promise to offer value and the biggest bang for the consumer’s buck; and Top typifies that the brand will carve its reputation for its peerless assortment,” recounts Namit.

For the Gupta family, the impetus to get into grocery retail came from its earlier line of trade in the fresh fruits and vegetables business, started in 1987. “We began with a small shop selling sundry fruits and vegetables but the good part was that we were able to recover the costs the same day and also make a tidy profit on the side. Ten years into the business, my grandfather thought of expanding the operations and that is how our first Honey Money Top store broke ground with its USP focused on peddling fresh fruits and vegetables,” says Nalin.

Honey Money Top launched its retailing business way back in 1997 when it opened its first store in Delhi’s tony neighbourhood – New Friends Colony. Located in a high-traffic area, this flagship 1,200 sq.ft. store still keeps aliventhe brand’s legacy and the family’s vision of serving the customers with best products, assortment and service.

About 5 years ago, half the number of Honey Money Top stores were rebranded under a new name – Freshlee– and hived off as a separate business entity within the family. Currently, Honey Money Top operates 3 SiS models in Delhi and there are 5 supermarkets under the Honey Money Top brand name, spread across 12,500 sq. ft. of retailing area, with average store size measuring about 2,500 sq. ft. While 3 Honey Money Top stores are located in Delhi (New Friends Colony and Chattarpur), two are in Gurgaon, which also has another franchise store there. Collectively, the 5 Honey Money Top stores employ some 125 odd employees, and the brand raked in about Rs. 50+ crore in revenue in FY22. Of the 5 rebranded Honey Money Top stores, 4 are currently in operation under the Freshlee banner with all of them located in Greater Noida.

Evolution as a retailer
It took Honey Money Top almost three years into the launch to transform into a full-fledged supermarket format, which was still a nascent and budding concept in Delhi-NCR. “Though the supermarket concept was still fuzzy and in a chrysalis stage, my father had the foresight to realize that it was a concept whose time had come and he decided to invest in the business in right earnest,” says Nalin.

In its first flush of supermarket incarnation, Honey Money Top focused on selling fresh fruits and vegetables, which became the brand’s distinguishing hallmark. However, filling up a 1,200 sq. ft. store with only perishables was more like going with a glass-half-empty approach to retailing and leaving much on the table. To better serve the needs of its catchment and hit the right market notes, the retailer first needed to get a bead on the customer dynamics and buying behavior of shoppers.

As the supermarket concept was in an embryonic stage of development, Honey Money Top had to take the spaghetti-on-the-wall approach to retailing. During the first few years of its supermarket operations, the retailer had to contend with lots of ‘chop-and-change’ to its product mix and assortment. “The store’s identity, market positioning and merchandising strategy were more like an evolving concept in the initial years of operations. Figuring out what the customers wanted and how the store could cater to those demands took up much of the time with lots of trials and errors before we could come up with an assortment that was suitable to meet the unique consumer and demand dynamics of the locality,” says Nalin.

The idea of adding dry grocery came when the family realized that introducing non-perishables into the mix could help generate better brand recall and create greater customer stickiness and shopper engagement. “We decided to extend the product range to include dry grocery items and everyday consumables besides introducing some imported products to the mix, which was then all the rage and to cater to the boatload of demand for imported products in upmarket localities like New Friends Colony,” shares Namit.

Over a period of time, the retailer caught on to understanding the needs and requirements of the people in the locality better and accordingly tailored and customized its offerings. “Today, about 60-70% of the product mix at our stores in different localities conforms to a uniform range of products across brands and about 30% of the mix is assorted keeping in mind the variations in local demand and tastes,” says Namit.

By 2003, Honey Money Top was able to build its credentials as a food and grocery retailer with a distinct brand identity primarily focused on ‘fresh’ but catering to the overall range of food products. Its first store had by now come into its own with a loyal customer base and following, setting the stage for onward expansion of the brand.

Specialization in fruits and vegetables retailing
Honey Money Top’s second store opened in 2006 in Greater Noida (later rebranded as Freshlee), which was then a new township in the making. “Not being sure whether we could get the sort of business and custom that we were looking for in the region, we opened a small 400 sq.ft. store in the Alpha One locality. But thanks to the strong public response, we had to move to a bigger 2,600 sq.ft. space within a year of the launch,” says Namit. “People were quick to glom on to our core category competence in fresh fruits and vegetables and we found a large base of customers willing to pay a premium for the higher value of our offerings in the fresh category.”

The retailer has since assiduously built on its original expertise in the perishables category and today Honey Money Top stores enjoy a reputation for their wide and eclectic assortment in fresh fruits and vegetables. “The biggest chunk of customers at our stores come for our range of fruits and vegetables, which is very uncommon for a supermarket as it’s the food and packaged consumer goods that are the usual top draws,” reveals Nalin.

In fact, with over 22% of total store sales coming from fruits and vegetables, the focus of all Honey Money Top stores has always been on building up the other categories around fruits and vegetables. Also, the stores cater to the quality-conscious consumers by offering top-graded products with an impressive assortment to choose from. “Our master list of product extends to over 700 distinct articles in the perishables category of which we stock an active list of 400+ products in any season,” says Nalin, adding that the focus is on providing natural and super-fresh fruits and vegetables to consumers throughout the year.

Tracing the retailer’s legacy in the perishables business, Nalin says that when food import was first allowed in the country in the early aughts, Honey Money Top was among the first entities to import fruits. Among the fruits it imported was ‘sharda’, a kind of melon, whichit imported from Afghanistan. It also brought in Kiwi, which has become one of the most popular imported fruits in the country today but was a relatively unknown and unsung fruit back then in India.

With time, one initiative led to the other and Honey Money Top was soon sourcing fruits from other countries like Iran to the extent that it developed the market for these fruits in many parts of Delhi. “There were very few retailers selling these premium fruits, and we became a popular store brand for selling them and among the top retailers in Delhi known for our fruit assortment and variety. Over time, we became fully engaged in unlocking the details of the business and understanding its different facets, which allowed us to fine-tune our own business model vis-a-vis the perishables category,” says Nalin.

Apart from its range of imported fruits, Honey Money Top today has expanded its ambit to sourcing the best quality fruits and vegetables from the best places of their origin in India. “We have tie-ups and direct networking with farmers and suppliers across India who are known for their quality range of fruits and vegetables and today we sell these products not only at our own stores but to other retailers in Delhi-NCR as well,” shares Nalin.

Surprisingly, the retailer has been able to grow its customer base and its reputation as a specialist retailer in fruits and vegetables through word-of-mouth publicity alone and without engaging in any marketing or promotions. “We have customers from places like Kolkata and other parts who place their order for fruits and fruit gift hampers with us because they have heard of our exotic range proxy their friends and relatives in Delhi-NCR,” says Sumit, pointing to the trust factor that the retailer has succeeded in building for itself.

Talking about the trust factor, Honey Money Top’s unimpeachable credentials in the perishables category has enabled it to make a success of another business model known as “arhatiya” in trade circles where its back-end arm Bosky Mart Limited sources fruits and vegetables in bulk directly from farmers and transports the products to traders in the mandis on a commission basis.

As its wholesale distribution business picked up pace, Honey Money Top’s back-end business and sourcing operations exploded. Today, Bosky Mart procures fresh fruits and vegetables for supply to Honey Money retail outlets and acts as a procurement agency for other distribution channels. “So while Honey Money Top is into front-end retailing, Bosky Mart is into procuring, sourcing, distribution, and B2B selling and reselling,” informs Sumit.

Bosky Mart, which powers and leverages the back-end strength of Honey Money Top, also gives the retailer a big advantage in procuring and sourcing fresh fruits and vegetables at a very good price as compared to other players in this business. Its back-end business allows Honey Money Top to source and supply fresh fruits and vegetables at a very attractive price not only to its own stores but to other retailers as well, besides also supplying to mandis and to other big institutions as part of Bosky Mart’s wholesale retailing model.

“Through Bosky Mart, we are able to get the kind of volumes that actually enables us to create a profitable business in fruits and vegetables and it also gives us the advantages in terms of availability, assortment, price and quality of our products. We get to source in bulk from our network of farmers on behalf of mandi traders who have full faith in us as to the quality of fruits and vegetables we source and they pay us a commission when the produce is delivered,” says Sumit.

Depending on the season, Sumit says that a wide range of Indian and imported fruits and vegetables have emerged as favorite takeaways for shoppers. “Imported apples are always in demand in all seasons. Other hot-sellers include Malta oranges, kiwis, grapes and pears, among others. There is a huge demand for the 25-30 varieties of mangoes we stock during the summer season apart from other fruits like watermelons and pomegranates during the season and these fruits offer us huge volumes.”

The road ahead
Namit says that it has been a 25+ years’ long journey since the brand’s launch during which his family’s quest has been to grow the brand’s geographic footprint by entering new and emerging markets in the Delhi-NCR region. “Delhi-NCR remains our focus area and over the years, we have taken our stores to places like Greater Noida and Gurgaon apart from taking other initiatives aimed at strengthening Honey Money Top’s brand value.”

But for a retailer that has put in almost 25 years of hard yards in the retailing business, it is natural to assume that Honey Money Top’s retail growth in terms of its store count should have been faster. Even accounting for the fact that 4 Freshlee stores are now a separate retail entity and no longer part of Honey Money Top’s portfolio, could the retailer have moved with lengthier strides?

Namit pauses thoughtfully before responding to the question. “There were certain issues that held us back but now we are looking to cover the lost ground in right earnest. For some period of time, we had to face certain setbacks in the business and one of our stores was sealed under the land ceiling act drive in 2017 while another store got gutted in a fire in 2018. Also, when it comes to all our business operations and transactions, everything is fair and above board and we have never tried playing a fast-and-loose game,” he says by way of explaining the brand’s conservative growth.

Going forward, the retailer is betting its cards on an integrated model of expansion through offline as well as the online mode. It believes that this approach will help it work around the challenges of real-estate costs and the many fixed overhead expenses associated with physical stores.

“The plan is to ramp up our retailing business by adding small express format stores focused on the perishables category. At the same time, we will also be integrating our offline business model with our online expansion strategy, which will be driven through our online app and will help us to extend our reach and brand visibility. The blueprint for our expansion is ready and we will start ramping up our store count and online reach by the back half of this year,” says Namit, adding that he sees the online expansion gambit to fetch a better ROI for the business.

Honey Money Top’s new stores will come up in some of the densely populated residential hubs and areas next to big housing societies in the Delhi-NCR region, which command heavy footfall. “These stores will open in places like Greater Noida, Noida, Gurgaon and even some in Delhi and will offer a premium assortment targeted at a quality-conscious customer base. As the stores will be integrated with our online app to facilitate remote orders and delivery, we are also working on the packaging side to allow for hassle-free, handy and hygienic delivery,” reveals Namit.

The retailer says that it plans to launch 10 stores in the first year of its expansion rollout followed by the next 15 stores in the second year and another 25 new stores in the third year, which will round off its first phase of expansion.

“In terms of the investment that we will require to fund the expansion, we are working on a very viable strategy and looking at a self-funded business model. As we have decided to open only small-format stores and since they will be dealing with only perishables, the financial outgo will be small and the plan is in step with the efficient capital target utilization set by the company. However, we are open to taking like-minded investors on board who would like to participate in our growth journey,” informs Namit.

The retailer says that it has done a diligent study on calculating the ROI, which given the small ticket size of the investment, weighs favorably on the books. “We have a long history going into this business starting with our first shop in 1987 with which we were able to recoup the investment the same day along with a small profit to boot. With the data on shopper conversion provided by our stores and the app, we are confident of racking the sales needed to break even pretty quickly. We hope to make a quick turnaround on the ROI based on the business plan and move ahead along the path of our expansion and growth,” avers Namit.

Honey Money Top brick-and-mortar stores are expected to act as a hub and a fulfillment centre for its app-based retailing model. “We are taking an omnichannel approach to the business where customers can shop in-store as well as order through the app. We are not looking to create warehouses or dark stores but will have our own delivery service to fulfill the online orders within a 2-3 km radius of our stores,” says Namit.

But while keen to move on with its expansion plans, the retailer is also aware of the known and unknown challenges that it might run into. “Despite all the preparedness, you can never know the kinds of problems you may have to face and that is why we have deliberately created a three-tiered expansion strategy, which will give us the headroom to learn and rectify any possible mistakes from the initial phase of expansion in the first year. “We are treating our first year’s expansion as a pilot so that before going into the next round of expansion we are in a position to do any course correction and iron out the wrinkles that may be required,” says Namit.

At the same time, the retailer also plans to take up more SiS projects with other retailers in the perishables category. “Apart from our current pilot with Markketo, we have taken up two new SiS projects in Delhi and are open to exploring this model further with other retailers in north India,” says Nalin.

Different retailers have different policies for the SiS model and Honey Money Top is ready to collaborate with those who have policies that it is comfortable working with. Very recently, the retailer has struck two new SiS deals of which one is for a neighborhood that’s well-known for its price sensitivity. “It’s very close to the Azadpur mandi where we already have a thriving back-end and wholesale distribution business plus a bulk sourcing model for mandi traders, managed by Honey Money Top’s back-end arm Bosky Mart. Due to the price-centric nature of this market, it’s a very challenging project for us but we hope to make a go of it based on our knowledge and understanding of the business,” says Namit.

Asked how he hopes to pull off a price-centric SiS model given that Honey Money Top has earned its stripes in retailing premium quality fruits and vegetables, Namit says: “It all boils down to sourcing, which has become very technical in nature these days. But with our competence in bulk sourcing through our back-end firm Bosky Mart where I can pick up the top lot of graded products on which I pay a premium for my own Honey Money Top stores and supply the lower order graded products to other parts of the business without compromising on the quality sourcing itself, gives us a fair amount of leverage.”

“We know which parts of this mechanism entail more costs for us and in which areas we can afford to spend less and we hope to work on this equation with a fine tooth comb in a way that can help us crack our new price-conscious SiS business model. Also, our new Sis projects will give us the room to experiment and crank out more innovative and cost-effective approaches,” explains Namit.

The retailer also has charted out an ambitious blueprint for growth of its back-end business. “We are working on marketing our perishables products to other retailers and businesses under the Bosky brand name. We are already in the process of upgrading our packaging and introducing new product categories like ‘cut vegetables’ for this venture, which will help us sell more of our products to other retailers and also beef up our SiS model,” reveals Sumit.

However, despite leveraging on its sourcing prowess to eke out cost benefits, the retailer is averse to offering the kind of insane discounts that some other retailers have made their calling card.

“How can a retailer offer 10-15% discount on products when the maximum margin he can squeeze out, even after eliminating the commission of distributors in the supply chain, cannot exceed more than 15%. But, of course, there are various business models to follow and horses for courses for different retailers and ours is to offer genuine quality products sourced from the best points of origin. Going ahead, we will stay true to our business credo and strive to offer maximum value creation and value-add for our customers and the fruits and vegetables category,” concludes Namit.

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