Wednesday, July 24, 2024

Zoff Foods emerges as an e-commerce first brand in the spice category

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With the onset of COVID-19, there was a seismic shift in the way people purchase groceries and other items, providing much-needed momentum for e-commerce in India. In response to this growing transformation, Zoff Foods reinvented itself and emerged as an e-commerce first brand,  carving out a niche for itself in the competitive spice market, leading to higher sales in the digital realm. Last year, the brand achieved an annual revenue of  INR 100 crore and covers approximately 0.5%. in the total spice market share.

The Indian palate is renowned for its love of “chatpatta” flavors, owing to the rich variety of spices that form a cultural hallmark of India. These spices are not just ingredients; they symbolize a cultural legacy and spice brands bear immense responsibility to uphold this legacy. 

One such spice brand Zoff Foods is paving its way in the spice market that is full of well-known brands like Everest, MDH, and other popular spice players. But what sets Zoff apart from the rest of its players is its e-commerce first approach, leading to significantly higher sales in the digital sphere. 

How did the journey begin? 

Zoff Foods embarked on its journey in 2018, driven by the vision of two brothers, Akash and Ashish Agrawal. Their decision to venture into the food industry and establish a new brand was somewhat unexpected, given their family’s background in the steel business.

However, the two brothers saw the potential in the food industry, especially in packaged foods and spices, and decided to enter this market. They aspired not merely to sustain a business but to craft an entity with a nationwide presence.

The brothers daydream of running a venture that ignited their passion. This category resonated deeply with their passion and entrepreneurial spirit, and so they ventured into the spice brand. 

They started their journey through a general trade channel but soon realized the limitations of the mode.  ‘‘General trade was a big market. It was a highly challenging task to create a viable GT business model when you are a new brand because you need to set up your distribution, your sales team, and it was still not giving us much-required profit, ‘’ says Akash Agrawal, Co-founder, Zoff Foods

The founders decided to resort to a different model. ‘‘At that time e-commerce was not much expanded especially in the grocery sector. However having had the opportunity to travel extensively to various countries outside India, I observed the prominence of e-commerce in those regions. This exposure led me to anticipate the inevitable rise of e-commerce, particularly in the grocery sector,’’ claims Akash. 

With the onset of COVID-19, there was a seismic shift in the way people purchase groceries and other items, providing the much-needed momentum for e-commerce to flourish, ultimately realizing the vision of the founders. And so they reinvented their business model to an e-commerce D2C brand. ‘‘For any startup, e-commerce is a highly effective model,’’ asserts Akash. Soon, it expanded to quick commerce and they finally achieved the status of a recognized brand. 

What Sets Zoff Foods Apart

Once the business model was established, the two brothers needed to define the unique selling propositions that would make their brand stand out among its competitors. Zoff Foods distinguished itself through innovative packaging and technology. The brand introduced Ziplock packaging, which offers resealability, prevents spoilage, and eliminates the need for refrigeration or makeshift storage solutions like rubber bands. Additionally, they adopted cool-grinding technology using an Air Classifying Mill (ACM) to maintain the spices’ nutrient profile and flavor by grinding at lower temperatures, preserving essential oils and aroma.

‘‘The traditional grinding processes often generate excessive heat, compromising the taste and nutritional integrity of spices. To counter this, we’ve adopted a cool-grinding method that preserves the spices’ nutrient profile and flavor. These initiatives set us apart from the rest of the competition and made us a spice brand with better shelf life and quality,’’ asserts Akash. 

A Diverse Product Portfolio

Zoff’s product range includes pure spices (e.g., turmeric, chili), blended spices (e.g., garam masala, sabji masala), and whole spices, which constitute 45% of their business. 

‘‘Spices consist of three categories. One is the pure spices like turmeric, chili, coriander, or cumin. Another is the blended spices like garam masala, sabji masala, and chaat masala. The third category is the whole spices which is our largest category and constitutes 45% of our business, says Akash. 

Discussing the whole spices further, he adds, ‘‘Previously, the whole spices market was largely unorganized, and even today, the category has few branded players. Most brands tend to focus on pure and blended spices. However, in terms of market share, whole spices account for approximately 40% to 45% of the market. This is primarily due to 2 reasons: Firstly, the whole spices are often preferred in cooking. Secondly, some users prefer to grind their own spices to ensure purity and freshness, and to avoid any potential adulteration.’’

A Technological Reformation Through Air Classifying Mill

Spices are renowned for their aromatic essence and distinctive flavors, which are infused with their natural oils. Leveraging an air-classifying mill for gentle grinding, the brand prioritized preserving the spices’ aroma, oil content, and pungency.

‘‘Unlike traditional machines, which often operate at temperatures between 70-80 degrees Celsius, AGM gently grinds spices at around 30 degrees Celsius. This lower temperature preserves the spices’ essential characteristics, resulting in a superior product,’’ says Akash. He further adds, “I believe this technology is highly effective for any food item because it preserves all the nutrients and properties during processing. It’s crucial to maintain the integrity of these elements, and this technology truly helps in achieving this goal.” 

Insights into India’s Spice Market

According to IMARC, the Indian spices market size has reached INR 1,80,760 crore in 2023. Looking forward, the market is expected to reach INR 4,70,339 crore by 2032, exhibiting a CAGR of 11% during 2024-2032. 

‘‘The spice market is around INR 1 lakh crore market. It is divided into three segments: export (35%), branded (25%), and unorganized. Zoff Foods operates within the branded segment, which is growing significantly through e-commerce. With a market share of approximately 0.5%, Zoff achieved an annual revenue of INR 100 crore last year,’’ reveals Akash. 

Sourcing and Supply Chain Strategy

To provide customers with high-quality spices, the brand sources its products from different parts of the country and supplies them to the customers’ doorstep via its website, e-commerce, and quick commerce platforms like Zepto, Blinkit, Big Basket, Credit, and other platforms.

‘‘Each spice has its geographical region where it thrives best. Therefore, we strive to procure spices directly from their places of origin. For instance, we obtain cumin from Punjab, chili from the south, and turmeric from regions where it is best cultivated.  Once acquired, the spices are transported to our factory in Raipur. Here, we thoroughly clean, process, and package them. From Raipur, our products are distributed across the country, ensuring that the spices with their quality and freshness reach every corner of India,’’ explains Akash. 

Rebounding to the General Trade Channel 

After establishing a strong online presence, Zoff has once again ventured into the general trade channel but this time with caution. The brand has started its general trade supply in the region of Chattisgarh and plans to expand the trade into neighboring states like Uttar Pradesh, Jharkhand, Odisha, Telangana, Maharashtra, and other close by states in the near future. The brand’s manufacturing facility is located in Raipur.

Discussing his choice to re-enter the general trade channel, Akash explains, “Following our appearance on Shark Tank Season 2, we started receiving inquiries from distributors across India. Initially, we managed orders on an ad hoc basis, responding to incoming calls and fulfilling stock requirements accordingly. Yet, over time, we recognized the necessity of a more systematic trading approach. Given our roots in Chhattisgarh, we strategically opted to launch our general trade operations from our home state, with plans for gradual expansion into other regions of the country.”

Unleashing the Marketing Strategy

In order to promote its brand, Zoff employs high-performance marketing on its e-commerce platforms and paid sampling in its general trade platforms. This approach has proven effective in increasing consumer awareness and driving orders. Discussing the market strategies, Akash says, “We’ve primarily invested in performance marketing across platforms, capitalizing on the high potential customers to increase conversion rates. Additionally, we’ve implemented paid sampling strategies in general trade stores. This approach offers consumers free products, with only a nominal shipping fee required. This tactic has proven highly effective for us, generating hundreds of orders as we introduce our products to consumers,” says Akash. 

The Road Ahead

Zoff Foods is poised for further expansion into the Seasoning and Ready-to-cook spice category. Discussing their future plans, the Co-founder shares, “Currently, our plant is operating at around 30-40% capacity, leaving ample room for growth. We aim to boost our production capacity by introducing new products. This includes expanding our range to feature seasonings like chili flakes, oregano, and tomato flakes, among others. Additionally, we’re delving into the ready-to-cook spices category, offering consumers the convenience of preparing dishes in just two to five minutes.

He continues, “Furthermore, dry fruits presently make up only 10 percent of our product line. We’re looking to broaden this segment by introducing flavored nuts in the near future.” Regarding revenue targets, the brand aims to surpass the 600 to 700 crore threshold within the next five years.

The brand’s expansion plans extend to neighboring states like Maharashtra, Jharkhand, Odisha, and Telangana in the coming years, strengthening their general trade operations. Additionally, they aspire to enter the HoReCa and modern retail sectors gradually, solidifying their position as a leading contender in the Indian and global spice market.

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