Secret Diary of Neeraj Kakkar, co-founder, Hector Beverages | Biography Part- 2 | Outlook Business
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Photograph by Vishal Koul

Secret Diary Of An Entrepreneur

"Being At The Right Place At The Right Time Matters"
Secret Diary of Neeraj Kakkar Part-2

V Keshavdev

Neeraj Kakkar, co-founder, Hector Beverages

Flush with the financial reinforcement, we were ready for the second innings. Red Bull was lording over the energy market in India but we felt the category still had a lot of potential to grow. Not just developed markets, even countries such as Afghanistan and Bangladesh, had a bigger energy drink market than ours… Tzinga was born…it was a copy of what was happening in the West.

It took us one-and-a-half year to work on the product. We launched it in 2011. The product was good, but it wasn’t growing as fast as we wanted it to. After more than a year, the burn rate wasn’t exactly inspiring. Maybe it was that…somewhere down the line, we lost interest in developing the drink. Had we continued only with Tzinga we would have been a relatively small success story. But the launch was a good lesson for us in terms of branding, about how distribution mattered. 

At some stage we thought let’s do something different…vitamin water was an option. We kept discussing ideas at lunch. James usually wouldn’t bring anything and he would pile on our lunch box. Back then, Suhas used get a flask in which his mom would give him aam panna. We would all end up fighting for that. One morning, James mentioned that his parents were coming down from the US and he wanted them to have a local experience, especially gol gappa and aam panna. We told him not to go to roadside stalls for gol gappa as his parents might end up with a stomach disorder. At the same time, we scouted around for aam panna. What was available in the market were artificial flavours… none of the hotels in the city were serving it either. A chance visit and we had inadvertently stumbled upon a category gap in the functional beverages market – the one for traditional, authentic indigenous Indian drinks.

dog days are overThis time, it was eureka! The four of us put our heads down to work on cracking the first lead…it was not an easy task but the potential if we got the product and the taste right, was difficult to ignore. 

Sequoia Capital came on board. I vividly remember the first meeting with VT and Sakshi at our Gurgaon office. It was January 2012. What a meeting that was…James, who anyway had a poor dressing sense, turned up in the worst possible attire. The pant had holes and he was wearing sandals! “Didn’t you remember we have a meeting?,” I asked him. He, rather sheepishly, admitted forgetting about it.

When the duo arrived, we ushered them into a room where our dog, which used to snore quite loudly, was also sleeping. As the conversation began, the snoring just got louder…I was already squirming in my seat when James interrupted VT with “Can you please lower your tone… the dog could wake up,” I was zapped by James’ remark and gave him a stare that said, “Mate, what’s got into you today?” In my head, it was like Lakshmiji khud aayi hai aapke ghar and you are more bothered about the dog! But as things turned out, Sequoia did invest… $5 million and $12 million over two rounds.

paper boatFor the first time we felt a sense of involvement and purpose in what we were doing…we were saving unique home recipes from extinction. The responsibility that it put on us…that there was a bigger cause…it was as if generations would lose out on the recipe if we weren’t there. It was a huge statement to make. That it also made commercial sense was just the icing on the cake! We lost interest in everything else and started scouting for recipes which were extinct or were going to be in the next few years.

Working on our newfound concept, Shripad came up with two words that would define our product: authentic and alive. We built the company around those two words. By creating this traditional drink we were being authentic – the products were how they should be. At the same time, alive meant it was modern, contemporary, and cool despite being a traditional recipe. Marrying the two aspects to create a strong brand was Ashwini and her team at Elephant Design. They came up with a unique design and brand name…Paper Boat. I believe this is Ashwini’s best creation by far...

paper boatThe plan was to launch aam panna, but we realised that were no suppliers of green mangoes! Most waited for the fruit to ripen. Till such time that we fixed the supply chain, we launched jaljeera, a concoction of lemon juice and spices, and aamras, a ripe-mango smoothie, in flexi laminated pouches with a plastic nozzle for #30 in 2013 in Delhi and Bangalore. The initial reaction from retailers was “jo cheez ghar pe banti hain usey koi kyun kharidega?” But the final verdict was delivered by the consumers. Today, there is no looking back. We finally launched aam panna in 2014…we have eight flavours, which are available through the year, and in eight seasonal flavours.

It takes one-and-a-half year, on average; to create a new drink…some take longer. There are some flavours we haven’t given up on yet. There is kaanji, a probiotic drink made from purple carrot that was once available in the North, it is no longer is available in any part of the country. The search for the elusive carrot took me all the way to Turkey! What a trip that was…I had stuffed close to 30 kg of the produce to be brought to India for trial tests, only to have it trashed by the customs department, thanks to the paranoia around mad cow disease. So, we sourced the seeds and got them cultivated in India through a contract farming arrangement. It’s taken three years, twice the time…hopefully, it will work out post the launch in September.

success doesnt come easyBeing at the right place at the right time does really matter. I wonder if we had succeeded if we had launched the product in 1995. Then, we were all warming up to foreign culture, their tastes and products. Over the past two decades, that has changed. Indian consumers have gone through the curve and are a lot more comfortable about their own culture…having a jaljeera today is as cool as having any other drink. It’s here to stay for good…

It’s what a typical brand case study in a B-School would read like. But the only thing that they don’t teach you is the struggle that an entrepreneur has gone through...

Everybody knows how Philip Knight broke the stronghold of Adidas in the sneaker market by launching Nike. It’s all summarised in a couple of lines – he went and sampled his shoes at marathons and within a span of years, Nike was a roaring success! What is not taught at B-Schools is how many rejections he, or any other entrepreneur had to face before tasting success…Nobody tells you what happens to an entrepreneur’s morale when he is rejected 100 times or sworn at for disturbing somebody’s routine at a gym like we did! 

man sketch out for vacationsAnd if you have worked for a market leader or an MNC like Coke, you have only seen the good life, where nobody says no to you, where the doors open easily once you flash your visiting card. It’s pretty tough because you’re used to people doing things for you, rather than you doing them…that’s a big learning to keep in mind when jumping ship from a high paying job to be on your own.

The other big change – one that does not come easy – is the one that your family has to make. The lifestyle takes a nosedive…almost everything changes. That’s what happened after Coke. We had to shift to a smaller house. I had to live off Vandana’s salary for nearly three-and-a-half years, as we didn’t have any savings and we were still in startup phase. Vacations are out of question, there is no eating out at fancy places…you don’t hang out with friends or chose to hang out with the thrifty ones! 

Neeraj Kakkar with vandanaA lot of water has flown under the bridge since, but now I enjoy the frugality. I still drive the 15-year-old CRV…the lifestyle hasn’t changed even after investors have pumped in money. Today, Hector is valued at $100 million and we haven’t even started our journey. The road ahead is long and winding but there’s no need to look far for inspiration… it can be real life or even the reel life. There is this dialogue from Trishul where AB says, “Main paanch lakh ka sauda karne aya hoon, aur mere jeb me panch phooti kaudi bhi nahin hai”.  It reflects the brutal confidence one can have…I just love that dialogue. 

I haven’t met AB yet, but NRN has always been a real life hero. He sent us a touching letter when we were putting up our first plant in Manesar. The letter mentioned that it took Infosys 33 years to reach the first billion dollars, but the next billion came in just 18 months. I believe, Hector’s future won’t be any different.


This is the second of a two-part series. You can read the first part here.

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