Building an Unlikely Foods Giant Startup
Viraj Bahl of Veeba sauces is an interesting man. Upon graduation, his father told him that he would have to earn his way into a life of prosperity. His father told him that he would have to earn outside the family business. He would have to establish a basic lifestyle before participating in the family business.
Hearing this, Viraj did not flinch. Viraj found a path that was way. He found work on an oil rig and put away a pile of money. A pile of money would enable him to live a life of decent comfort for the rest of his life.
Once he established a basic lifestyle, his father was good for his word. Viraj joined the family business – Dr.Oetker’s fun foods around the year 2003. Amidst the back of the IT Offshoring and India’s decade of growth, Oetker took off. It became a massive success, and Viraj likes to quip that it succeeded despite him.
Sale of Dr.Oetker and Founding Pocketful
Around 2009, Viraj’s father decided to sell the family’s legacy business in sauces – Dr.Oetker to a Multinational company (MNC). As many first-generation entrepreneurs will tell you, there comes an opening that one has to take. And this is what his father did when he sold the company to an MNC.
Viraj, fresh on the heels of the sale of Oetker, was itching to try his hand at what naturally comes to every human being – starting a restaurant. Viraj founded Pocketful, a combination of fine dine and quick-service restaurants. To make a long story short, this bombed. The venture failed, and Viraj lost a good chunk of money.
Not one to stop at failure, Viraj set about starting up again. However, this time around, he was going to do something familiar. Only, he was going to do it bigger and better. He founded Veeba. As he likes to say and we totally, the sauce is the unsung hero of the Indian palette, kitchen, dishes, and Indian cooking. Without the sauces, the dish is just a skeleton of things.
BTW – the Indian Food Industry runs into several lakhs of Crores per year.
Sauce – The Unsung Hero of the Kitchen
The next time you try your favorite Bhel Puri or Chicken Tikka Masala – imagine the dish without the sauce, and you’ll understand. Today, Veeba has grown into one of India’s largest foods companies, especially in sauces. They have recreated every imaginable amazing flavor on the planet and brought it closer to us.
How did Viraj Bahl of Veeba do it bigger and better? Where do new flavors come from? How do they bring out new sauces? What is their secret ingredient? It’s all in this episode.
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sauce, company, product, indian, viva, restaurant, business, realized, india, taste, source, launched, started, retailer, krishna, distributors, frankly, market, built, put
Krishna Jonnakadla, Viraj Bahl
Krishna Jonnakadla 00:01
Hey everyone. Good afternoon. This is a fabulous Friday afternoon. I love to record on Fridays. Go figure why? And in case you've been living under a cave and you haven't heard of previous 50 episodes, we are live. We are actually today again back with another dynamic entrepreneur viraj bol of Viva Viva is a personal favorite. And the fact that I'm actually a consumer and a fan of their products as an extra zinger. Perhaps I'll try and avoid my bias in the show. But he's doing a fabulous job with Roger, welcome to the show.
Viraj Bahl 00:38
Hi, Krishna. Thank you so much for having me here. I think it's it's a proud moment for me to be around Joseph scheme. Right. So that means you have a video on Morocco schema. only
Krishna Jonnakadla 00:50
reach Morocco. It's our pleasure. So tell us a little bit about yourself and what you're working on right now.
Viraj Bahl 01:02
Um, I am. I mean, I'm My name is Raj bell. I'm the Founder and Managing Director of Viva Food Services Private Limited. veba is one of India's largest source companies and, and, you know, and that's what I do. That's what I'm doing. That's what I've been doing for the last eight years and have loved every single day of the journey. So you know, I
Krishna Jonnakadla 01:31
mean, factory factory. Oh, wait, that's the shortest introduction. I think I've had any guest provide show perhaps goes to show how modest you are. I'll come to the sauces part. But I have to say this, okay. And I've always said this even to my wife, that whenever you go out and eat let's say a pail, or a karate roll, the real secret ingredient or the thing that actually provides that deliciousness or the taste it is the sauce It's the other ingredients around it in some sense are actually enhancing the sauce but again sauce me hoti I always feel it's the sauce is the biggest secret ingredient of any taste. its ultimate taste maker.
Viraj Bahl 02:22
You know, it's like, it's, you know, you are repeating my words in my team meeting, I'll tell you something. So strange source is the biggest unsung hero of the food industry. And I say this answer because nobody realizes now if you look at a burger or a car t roll or a bill puri You know, it is responsible for the least amount of cost in the burger, or the cartel rule or the availability and it is responsible for the least amount and the highest taste and the customer will notice committed bunkie Patty crumble Korea a young undercut chicken soft Nita, you know customer will notice all of those things, but customer will not notice the deliciousness in the burger or the coffee or the bill is actually coming from the source. So the most important ingredient is also the cheap, the protein and the carb is always more expensive than the car than the sauce. So the most important ingredient of our dish is is actually the cheapest and the most critical ingredient of the of the dish. So it's a very strange thing that you've noticed it because I mean, that is that is why I entered the sauce business because that is where everything lies. You know, it binds the product together it marries the bandwidth of it. It marries the crispiness softness and gives all of the taste. So you can have a chicken burger with a neuroimmune is will become an Indian burger or you will have a chicken Mayo with a with a Southwest Chipotle. Mexican The funny
Krishna Jonnakadla 03:56
thing is when I used to, I used to live in New York A long time ago. But when I used to travel to New York, in Manhattan, in downtown New York, there is an Indian restaurant. I don't know if it exists anymore called cottage old company. The weird thing is weather. So New York has two, two airports and the New York metropolitan area has three airports. I would plan my flights to New York in such a way that I either land at john f kennedy or LaGuardia, so they're on the way to my room. I could stop at karate roll company and actually pick up a couple of rolls. And when I used to analyze them, I would say area chappati I can make it at home and the the that at that time I'm traveling anyway but otherwise this sauce was the thing that actually provided this thing. And I I've said that many times, then give for category company, although they were based in New York, they used to have two locations. One is what's Midtown, which is where Rockefeller Center are. And then downtown where Wall Street is. People would drive across from New Jersey, which is at least an hour, hour and a half mile to actually eat their potatoes. That's how delicious it used to be. And all because of the sauce, in my opinion. Wow. Yeah. So when we start on this note. So, tell us a little bit about the numbers. What sort of what sort of scale? Have you had your you said, You're the largest sauce maker in the country. So speak to us about that. One of the largest?
Viraj Bahl 05:46
No, I said one of the largest. I'm one of the largest, I can't say for sure that we are the largest, but we must be right there on the top. We, you know, when I say largest, I'm talking in terms of volume, and not value necessarily. Because, you know, Viva basically has two divisions. One is what we internally call the, the, the large, you know, our b2b, b2b division. And the second is our b2c Division, the what you eat at home. So, the b2b division is, is a high volume business, but a low margin business and the retail is now God has been kind it's also high volume business, you know, things are growing rapidly on the retail front. So we were like in terms of revenue, we are, you know, I mean, you know, I'm superstitious talking about my numbers, but we are a mid three digit kind of revenue company and growing rapidly. And, you know, that's that's that's to give you an idea about the scale and you know, size of our of our business, what
Krishna Jonnakadla 06:58
else can you share in terms of let's say city numbers change not a product line so that that can do justice to that?
Viraj Bahl 07:06
So you know that that I said, I'll tell you I know of companies which are far older than us Viva is almost eight now and I know of companies are older than us or far bigger than us in revenue also, maybe they've reached 1000 crores and we've not yet you know, reached that number. But our are what sets us apart from everyone else is our distribution. You know, every company Krishna looks good in Delhi, Bombay, Bangalore, Pune a you know, and maybe Chennai and and Kolkata, but you will find veba how we look in Delhi, Bombay, Bangalore, etc, you will find us in all our glory in a in a velo or, or a Madurai or a kodaikanal order or, you know, obviously gender and Ludhiana but even a hoshiarpur. So our, our distribution footprint, today's more than 500, almost 550 cities and towns, that is a large footprint. And out of our one of the things which I'm proudest about at Viva, I don't know if you can still call us a startup or not. But if we were to be called a startup, you know, one of the things which I'm proudest about is that we are not your typical sort of, you're building a traditional fmcg company. So, out of a retail revenue, this is something which will I actually shocked your listeners out of our retail revenue, more than 70% of our revenue comes from general trade, you know, gt mom and pop stores and remaining 30% comes from modern trade and online. So, do we are present in every modern trade and every online format that there is to be present in and we are, we are crazy about that business, we love to service them, we are really good, we have really good relations with all of them. But our core business is general trade, we are available in every shop in these every relevant shop in these 550 towns. And that is what sets us apart. So if Krishna you were to tomorrow, open a company which competes with Viva, it will be easy for you to maybe crack into one or two online accounts or maybe one or two big modern trade jeans but for you to come and compete with us against our might have distribution and 550 towns. That is what sets us apart from from you know, that is what our one of our biggest strengths. So if you if you ask me, what are the two biggest strengths that Viva has? One is a product innovation, I mean, we are responsible. I'm a very proud Indian very honestly and I always say Kim, why can't an Indian company with the best sauces in the world it's not it's not like making the COVID vaccine you know now Indian companies are making the West COVID vaccine so sauce tomato son by Can we make the best sauce in the world. So he is Innovation. I mean, you put, as a proud Indian, I can very safely say you put my product against any product in the world. And we will come out as good or better than anything else available in the world. And B is our distribution. So our product innovation and product distribution, these are our two core strengths and the whole complexities around that.
Krishna Jonnakadla 10:20
You know, in fact, I'll dig deep into both of them in a short while. But let's, let's understand the backstory of it. Is we buy your first venture.
Viraj Bahl 10:34
Yes, no, we buy as my second venture. I'm a feeling of restaurant here before this. I used to I started a company in 2009, called Pocket Full, it was a chain of restaurants and my peak, I had six restaurants. And someday my respect for restaurant is comes from the fact that I'm a failed restaurant. You're right, I know how difficult it is to run a restaurant, even though I see sauces the unsung hero in the burger. But in the whole restaurant Gambit, there are many other things right from licenses to, to, you know, to real estate and blah, blah, blah. But some failed restaurants. I started a chain of restaurants will Pocketful in 2009, for very long and very tough years later, I decided to pull the plug. And at that time, I did not realize this. But one of the best things which happened to in my life was my restaurant business failing. I mean, it could not have been scripted better. If I was still a restaurant here, I might have been running 3040 5060 restaurants, but the failure of restaurants and you know, also it's a very, you know, naked kind of a failure when your restaurants are empty. Everybody knows you're not doing well, right? You walk into a restaurant at lunchtime and you find it empty. You know, Eric admits and maybe you know, so it's a very public kind of a failure. And so I feel that the restaurants, business, and after that I understood sauce making very well. In fact, my restaurants also had some of the best sauces. You know, that was our secret sauce. So to say in the in the restaurant, the taste of the product was loved by everybody. And very much like your karate kebab, so Pocket Full was nothing but we used to sell chocolates made out of something that I had invented, I used to call it bread on a bread which tastes like non so it was a non pocket right and stuff with butter chicken or you know, Gripen E and you know, stuff like that. And the entire taste used to come from the source. And, you know, talking to restaurants, I used to wait at my tables continuously, you know, speak with customers, and talking to all of them give me a very good sense of, you know, what the customer wants. So, but anyways, I made a lot of mistakes. I mean, I if I if I write a book on the number of mistakes I made during the restaurant industry, I recently write a book on that I made. Yeah, I made every mistake possible. Krishna. I mean, I, my first restaurant was 150 seater. And last but never, you know, when you start there, you will never make money. But I was very, very cowboys. I was like, yeah, we can do this, we'll do this. I hired people from some of them. You know, I'm always even today reverse team is exceptional. But at that time, I hired from some of the biggest national restaurant chains. I've made my corporate office overheads so big, that even if I had 30, profitable restaurants, I would never ever break even. And, you know, I had here six restaurants and half of them were lost making. So it became such a cash sucking, you know, machinery that anything I could do would you know, would be too little. And that frankly taught me the biggest lesson of my life. And honestly, without that lesson Viva would not have been as successful as we are trying to be or as it is right now. So that is something which is really sad for me. At that time. Obviously, I did not know that I am getting a you know, a crash course or an MBA or whatever. But the failure of my restaurant business frankly was one of the best things which happened for veba, he started leaving because of that otherwise I would not have and be the lessons that I learned kind of stayed with. So that I would say, now I can, you know, look back and talk to you about those times, but they were tough times. You know, I wouldn't lie. Interesting. So
Krishna Jonnakadla 14:40
you perform to you, you made two Cardinal sins are committed to Cardinal sins. One is becoming top heavy and expense lead very, very early on, although the restaurant business does have a certain amount of capital intensity to it, especially if you're having 150 seater, right? got started, that must have been a pretty good sized restaurant. And the second one is you actually, you scale much before you actually get traction, although this is like a traditional business where you need a certain amount of investment. And you were you were doing another thing, which was experimenting with a new type of food. So, absolutely, if you have if you had to experiment with chart, which is already well established, so and you start a line, and then you say, Okay, I'm going to expand it, possibly, yeah, but then again, three new things. And that to a larger one. Exactly. Yeah, yeah. So let me understand, where did the courage to do that come from? What have you always wanted to be an entrepreneur? What were you doing prior to the prior prior to pocketfold.
Viraj Bahl 15:52
So, my, I started my journey. So my parents are from the food industry or were from the food industry till till, till a long time back till about 1213 years back. And, and, you know, if I go back to my, my, my school days, and we were a very middle of middle class, kind of a family. And, you know, my father had a food business and my father, something which really intrigued me, you know, growing up that the amount of hard work my dad put, was directly proportional to the fruits of his hard work that we got. And that really stayed with me that if you work hard, and you know, my dad really worked hard. My mother and father both were in that business, they both really worked hard and I could see you know, from one one car, you know, one Maruti 800, we became a Maruti 800, and event family, and then, you know, we got another so I could see that, and I was really, really keen on joining my father's business. And my father, you know, had this really long rule that you can only join the family business, when you start earning enough money outside to raise your family in the same sense of comfort, you have been raised in a long room, but it's reversed tonight. Oh, stayed with me. And luckily, we were not doing that well, right. So that that number turned out to be two, three lakhs a month, you know, that is what my father wanted me to earn in 90 90,000. And at that time, the fastest way, because I was really keen on joining, and the fastest way of getting there was I, you know, I did my industrial Marine Engineering, I started working for a company called HP bolo. Most line is the world's largest shipping company. And, you know, they operate oil rigs and merchant navy vessels, but they like that job pays you really well. So I was very young, when I frankly reached my father's threshold of that minimum income. And when I did, I immediately resigned, I joined my, I came back to my father, as a dad see, you know, reset incomes that you wanted me to. And dad, being a man of his word, could not say no to me. So he said, televator, join the business. So I joined the business, and then the business, you know, the business, frankly, I joined and, and, and I've said this publicly many times, the business started doing really well, as soon as I joined, you know, and this was around 2003 2002, and 2003 2003, sorry, and business started doing really well. And I got a lot of credit for the success of that business. And very honestly, like, if the biggest moron in the world would have come and sat instead of me, the business would have still done equally well. I just happened to sit on the aeroplane before it took off. You know, if you remember in 2003, that's when that's when modern trade came to India, all the restaurant chains came to India. So food industry was after, you know, it was ready to post. So at worst, and I was I just happened to be there. So people thought he's great, I wasn't great at all. I just happened to be at the right place. And then after that, I stayed with that company, I got a leadership role in that company, towards late 2008 or so. But 2009 2008 and my father decided to sell the business. And we sold the business to to an MNC. And we The family moved out. I stayed back with the new formed entity for a year. And a year later, I decided to you know, kind of, I always wanted to, as I said from childhood always wanted to be an entrepreneur. So 2009 I left that business and started my restaurant chain. Never ever thinking that I'll I'll do anything other than the restaurant chain. But as luck would have it, my restaurant business did not do well. And when it did not do well I understood food processing that was you know, my passion in life and my calling in life. So I decided to kind of shut the restaurant business and you know get back and get into sauces base interesting.
Krishna Jonnakadla 20:09
Let's go back to sort of was a family in a restaurant business or what exactly was the base? No, the family was actually in a sauce myth Oh, it wasn't a sauce was okay. And it was b2b sauces supplying it to Indian restaurant
Viraj Bahl 20:23
It was b2b and b2c both both
Krishna Jonnakadla 20:26
okay. So, in some sense you were coming back to your roots, so to speak.
Viraj Bahl 20:31
In some sense, I was coming back to my roots I understood the process, but you know, when I came back I was very clear about one thing that the products are bringing to market should not be a me too of what you know what is already there in the mall, right. So, you know, like, typically typically, if you see Muni is has between 5060 70% fat, but when we brought you know, the SE report, the dressing or the mint Moon is at the olive oil journeys, we reduce the fat content from 60% to 20%. So, I was not competing with anyone I was doing something which was not done in India before that, or at least not done to, you know, the best of my knowledge. So my intention was wide create, I have yet to come across any mother or wife or girlfriend or husband or you know, who says that, let me give my kids are necessities or scurried credit or, you know, let me save 10 rupees on. So I said I'll make the best product and let the cost be whatever it is. So we are more expensive than honorable opposition. But the thing is, we are we, when we came into the market, the idea was very different. Let's create the best source and let the ingredients decide the price. So fact you know, Krishna fact gives. The reason of putting fatten in Milan is is it gives richness and creaminess to the male knees. But what I thought if we can reduce the fat and still maintain the same richness and creaminess. There turns out you have to remove fat and put something like milk, which is far more expensive, but gives the same taste in creaminess. So that was so we made our sauces vegetating and we reduce the fat content and that is how we went to the customer. And when I started Viva, I was very clear that Viva will be a b2c company. But b2c is a long drawn battle. It takes time to build a national brand and all of that. So I needed volume of scale, you know, and to get volume of scale. At that time. In my naivety, I thought First I will conquer b2b. Once I've done b2b, I will go into b2c little realizing that, you know conquering b2b was not easy. But for the first three, four years of our existence, we were a purely b2b company. Once we got volume and scale and b2b, that is when we entered B to C. And once we entered B to C, you know, I mean, the customer gave, gave Viva so much love. I can't. I mean, I could not have anticipated this is the amount of love we get from our consumers. You know, we have a study that says that more consumers have veba by two SKUs than one SKU which fmcg company has that you know, so you will find more people going to the market and buying two of our variants rather than one. So we were to one and then three. So this is the amount of love we got. And and you know, and I mean, I would really be lying to say I planned everything. I did not learn it. It happened. So you know,
Krishna Jonnakadla 23:28
yeah. So let's so you sold that I that was fun. Food was the brand. Yes, yes. Okay. And I did not sell it. It was my father's. Yeah, so I The funny thing is sauces, they do two things. One is, not only do they bring that they are the thing that actually binds everything they are the tastemaker in that particular dish. They also drastically reduced the cook time for a lot of things. I think that's the other side of it. Right? So for instance, I mean, I've lived in the US for more than a decade, you your choices are somewhat limited. You get peanut butter and jelly and jam. But when but we Indians have a thing for spice, and we want spicy stuff. And on the spicy side, you hardly have anything. So about four or five years ago when I started seeing all of the the males appear, I would I would think because if you start if you go to a subway, in subway, you have main male, you have Southwest report late you have chili, you have another you have the normal male. You have sweet on you have all of these and then I used to constantly wonder, why don't they come out with these options because if it's available in rest for restaurants, if the same thing was available for a normal Indian kitchen, they will be able to make so much interesting stuff with it. And that's when we realized Viva started doing it. So we've been watching the
Viraj Bahl 25:15
flavors grow. Thank God, Krishna, thank God I realized it before you realize the same, you need the same same to save I was like, Yeah rissani sources. They're like the millions of customers of this chain who are willing to buy these sources, but nobody's giving it to them. So maybe the one takeaway, but let's improve it, let's make it healthier and tastier and better for you and all of that. So I mean, our sauces are all better for you than what you get at any chain and stuff like that. You know, the same thing I thought luckily I thought it before you know
Krishna Jonnakadla 25:52
one of my favorite things because I'm such a big lover of Chile. Where and when i when i when we used to make burgers in the US. We used to have a few Hispanic or Latino friends, people from Mexico and then South America. So Chile is originated. Mexico is supposed to be the land where chilies originated. You have so many types of chili. The normal Indian knows about the normal chili. And then there are three or four in South India. And then you have goo Jolokia for masa, which is the spiciest natural chili on the planet. But then again, in Mexican cooking, you have poblano, you have jalapeno. You have habanero. He bought les and then and then the habanero thing. It is so small, but it's so potent. So we would chop and add it to our burgers and then consume them and we would eat a whole habanero just with one burger. And even the Mexicans were used to have an arrow they would actually tell me god I can't believe this is the level of spice up. And that's my thing with chili. So one of the sort of things on my bucket list on the to do on things businesses to start, is this recipe is this store called chili and bring all types of chili from the planet and for every soul. So if it's habanero to have 10 separate varieties of how habanero can be created a sauce, relish a pickle, maybe you know crushed dried out habanero to add. So I don't think I would have started Weaver but but but that's how fascinated I am. And the other thing is if you had a bloody mary any type, which is a copy. So the Bloody Mary has this Tabasco not Veliko. Vasco is there, there's the washer stuffs, mostly to say sauce. De Leon parents, there's a brand original creators, right? Yeah, so they're known for that sauce. The British brand. Yeah, but for but if you're a vegetarian Indian, although it's not the spiritual side of it. But if you're a vegetarian Indian, you have to the original source actually has anchovies in it. So which is anchovies is a fish. If you read up about it, you will say no, I want a sauce which doesn't have anchovies in it. And I for the longest time I kept looking for a source which didn't have anchovies, and only recently found it so I can have my bloody mary with without the show, isn't it? It tastes a lot better so I can so when you spoke about making it vegetarian and actually reducing the fat I could relate to it that the consumer actually wants something like that.
Viraj Bahl 28:46
So you know, the traditional caesar dressing. That recipe of Caesar dressing has anchovies in it. Now Yeah, Anthony's in Parmesan cheese. That's where the taste comes from. And I wanted to make Caesar and I wanted to make Caesar for India. And and you know, most of our population is vegetarian. So I wanted but without anchovies. Whoa, you know, you don't get the original taste. I kid you not It took us months to create the created taste of anchovies in a vegetarian format and then make our Caesar that's how we actually launched our Caesar Finally, and I mean, I can share with you how we did it. But you know, that's our secret sauce in our Caesar sauce because we actually created a vegetarian feast and that's an Caesar is one of our most loved and best selling products in the market today. And and it's it's 100% vegetarian. So you know, so I mean, funny anecdote from So okay, there's a rule. All my friends have this rule with me. My wife has this rule on me. When I start talking about my products, I can go on so you just Raise your hand, then I'll do it. I'll stop. Because you know, I am who I am when I go bonkers and I'm talking about our products. No.
Krishna Jonnakadla 30:12
Yeah, no, no, that's all good because we want to jump in, I'll touch upon the creative process in a second. What ranch has bacon in it as well, right? So the original ranch has bacon in it a lot of so. So when we used to live in the US, we would pick up every product and read the ingredients and say a child is making ice maker. And not because we didn't like it or anything. Because we we knew that. If if that was in it, perhaps we possibly may not like the taste, and we would hate to throw that out. But it's amazing what you've done. Let's go back to the beginning the 2009 timeframes. What did the playbook look like at that point in time, because you're already your family had already run and built and sold? What was the playbook in your mind? And you alluded to the fact that you wanted it to be b2b b2c? So that is that is not what? Sorry, that is not 2009 2000? Sorry. That's a pocketful. Right. So 2000 V by certain 230? Yes, yes. That's right. That's right. So what did that did you benefit from the playbook that your parents had already executed? So, so talk, talk about it from two perspectives. One is the distribution angle that you spoke about. And the other angle is actually the Create creating the sources itself? How talk about the beginning.
Viraj Bahl 31:43
So the beginning, you know, the beginning was tough, I will not kind of mince my words around it. I mean, I was again, you know, after all my all my cockiness and overconfidence had already finished by, you know, the failure of 111 business, I was, you know, tight on cash. And, you know, my, I mean, my, my wife played a very important role, I was very clear that I want to start the SOS business and, and my wife, like, when I went to her, I was half expecting a fight. But I went to her saying that I want to sell, you know, we had bought a house for ourselves that you're not planning to build our dream house and all of that. I told her, I want to sell that to start this company, and I was expecting a couple of, you know, punches on the face kind of thing. But my wife agreed, you know, many spouses would not have done that, and my wife agreed to, you know, to sell our future dream house for me to start with, and that's where the, the seed money came from. And, you know, and so starting Reba, it happened like that, and, and then we ran out of funds almost immediately, and I raised some outside equity. Or do you have to understand my father, you know, my father had a very, very liberal, Esau program for me. And in my naivety, I thought I've really earned all the money that I've got from that piece of plan that the previous company, but in actuality, it was my father's way of giving us the money without really making a steal that he's gifted it to us, it was it was a very liberal use of plan. I mean, nobody gives a supply which is that liberal. So that is where my seed capital for life came from, which I kind of burned down in, in the restaurant company and buying that one house, you know, all that money was finished. So the restaurant company, we shut down the house, my wife agreed to sell. And I'm really thankful to her for agreeing to do that. And once we sold out, that's where the Viva seed money came from. And after that, we ran out of money, almost like I ran out of money almost immediately. And I went out and did fundraise, at that time. And, and then, you know, the first one, one and a half years, again, my strategy was very good. In research in research and development in our r&d Center, we will start working on our retail products on day one, get our b2b volume, and then go into B to C. And in my mind, getting the b2b volume was very easy, you know, but it wasn't the first one one and a half years, I did everything possible to get that business. It took a lot of time, almost 18 months of struggling before you know, and those 18 months Christians have to understand the very difficult there was no business there was no money and, and we had salaries to pay, you know, it was just a difficult time. And and you have to also understand my mindset, you know, I just come out of a failure at that time, so it's not easy, failing again, and then again, right, but this time, I just had my back against the wall I had nothing else to fall on to. And finally, you know, I we kept at it, we were a small group of people at that time and we kept at it at it at it and I, I remember a year from you know, a year and a half later, we started getting, we got our first order from Domino's, and I will never forget that, you know, 70 tons of salsa business either. That order took almost 910 months to get but that gave me hope the company tells me Bernie got me But uh, you know that that was a big, big mental relief. And we then slowly slowly after Domino's, we got pizza hut and then KFC, Taco Bell, Burger King Starbucks. And slowly, slowly, after a very, very difficult first one and a half years, we, you know, we, we started getting a little bit more a little bit more a little bit more business. And three years later, I realized we've reached a revenue and volume where now I am comfortable getting into the start of the fight of retail. So 2017 I said, Hello, let's enter retail now and the products are ready right, the innovation at the r&d Center was happening at that time, it was not an r&d center it was me and our head of r&d two of us working now Yes, we've got a whole center and a team and all of that but so me and her we used to work on our products every day and kept perfecting the product but never launched them because you're not ready to launch in retail. Then we launched in 2017 and once we launched in retail we were first a daily only company then we did a little bit of Punjab then we you know again today I can see that we built a beautiful national distribution system. The idea was not to build a national distribution system The idea was very simply how to increase our monthly revenue that was the idea the idea was how to go and you know, go to Punjab go to Ludhiana go to jolanda go to Nagpur if Bombay doesn't have space to us, let's go now portfolio and then bombing. So one of the reasons we've built a loss distribution system because metros are already taken. So we have to go out get revenue and then come in that was a need of our and today Yes, we are bombing in metros, we probably are right really on top. But you know, it was again, not planned, it was more necessary and less planning. We needed the revenue and we had to go out. That was the story till about the first 100 towns and after the first 100 towns and when the consumer gave us so much love. That is frankly, when I realized that you were sitting on a really potentially big company, and the Viva brand is getting respected and loved and all of that. So I said, you know, if we are making such good products, and we are, you know, healthier than what is available in the market, we our whole concept is better for you. You know, our products are better for you. That does not mean they're like they're better than what is available in the market. Right? So I do not my munis has low fat. But I will not tell you the super Chairman procedure when you start eating my movies, you know, it won't replace it is healthier than what is available in the market. Right. And it's not a immunity booster or something like that. I mean, you know, so better. And after 100 towns, and when we realize we're getting so much love. That is when I said okay, let me take a step back. Now we have come up with size we can do, we can take organized bets. And that is when we made our national strategy, and that is I never forget, about three years back, I said, Let's go to 500 towns. And I remember my team thinking it a pug allowed me You know, every time we see something bizarre, but you know, 500 and then today we're doing 500 plus towns and doing well in those towns. So that is all that is how it all fell into place. Actually
Krishna Jonnakadla 39:09
I'm a little I have two questions here, one. And I think again, you made a passing mention of a very profound point. Possibly I will draw an analogy to battle or war here. When he said, If I don't get space in Mumbai, I'll actually go to Nagpur I'll actually go to pony. You actually went and surrounded in effect, it's almost like a king. He can't actually take the food and then he decides to take on board. A job god okay. So if you're all surrounded, you have no choice but to give up your code to me, right? So but how did you crack that part because in retail, getting your product on that shelf is really the main of the game. Getting those retailers to carry and India is a is is a largely unorganized market, which means, well, there are established distribution players but they still have, but it's largely possibly family driven market. How did you conquer the first 100? What was the what were some tactics you employed? The reason I'm asking is about a decade ago maybe actually not even a decade ago around the time you were contemplating launching Pocket Full family member wanted to launch a product, which was in the coconut water, you know, dehydrated coconut water space. And so, he was discouraged. There was a large distributor in Bangalore, he said, You will have to call you have to host parties or five star hotels, you have to do this you have to do that. It is not tomorrow, Buzz kivar mania, so that was sort of the shortened what he said. But I actually disagreed with him saying that no, no, no, there is an angle to this. It can be done, it will be done, but it's just you following the playbook. So what is the playbook to get to that? 100 and how did you crack that? Because that's the that's the secret sauce of scale and distribution if
Viraj Bahl 41:29
you rightly I how do I put it the you know, there is no there's no secret sauce to this, but it was more for some reason vest comm you know retailers have vest for some reason do not even trust companies of North you know that is so, if if a Bombay company starts and end a Delhi company starts if idli both to start at zero, but if the Bombay company starting at zero a Delhi company starts at minus three or minus five and I don't know kiss deliver Luna Jackie kiss bongaree de la casa gabbroic yetta that we are all kind of suffering because of that. But the simple thing is that we went to the retailers with our hands folded and said, Sir, we are here we are a new company, we will come every week to you. We are making quality products. And if if I can, you know today I know why we succeeded. And that is that is at that time I did not know that. But you know a lot of companies and I'm literally letting out a million dollar secret over here. Probably more than a million much, much much more than a million dollars you get a lot of companies the mistake they do is they go and stocked a shelf with a lot of raw material. At that time. A we did not have the capacity to build so much raw material inventory. So what we did was we and second thing is I wanted the retailer and us to have a conversation every week. So what I said that if the shop sells 30 pieces, let's give him if he sells 30 pieces in let's say a month let's so typically what every fmcg company even today they do is they give him 30 pieces. I said let's give him only 10 so the distribution teams were not happy at that time because that meant more work for them. But in in hindsight what we realized that when we gave them 10 five are sold. So in the retailer's mind 50% of the stock was sold in the first week itself. And then you know somebody from Rebus coming next weekend saying assessor a big game. I'm not going to stop the other half of that is sold so can we give you half more. Very often the retailer will say no, don't give me half more, give me seven pieces more instead of five pieces both and that is how we built and you know now we realize this that that is a way to build a retail brand. That is the the wind when the retailer gets your confidence that this company is not going anywhere. They're coming every week. They're not dumping stocks on me and they're not making us and and at that time we we started a thing not started a thing. But we follow the rule which is already there that we sell sell keeper stocks, if they're not selling, don't give us the money you keep our stocks and if this they're sold, and because we're doing that, in any case, it was not in our interest to give them 50 pieces it was in our interest to give them 10 pieces because if 10 pieces sold we get 100% of our money. But if we gave them 50 and 10 pieces were sold we would only get 20% of our money and I now talk to a lot of Younger fmcg companies, and the amount of times I hear them saying, Krishna, that we went to the shop, and we bought the whole display package, and we took four shelves and filled it up with a stock. And in my mind, the first thing I'm thinking is my God, this guy's so passionate about it. But now I have to tell him to not do this, because it's not good for the long term. Because when a startup goes and takes the whole shelf, and fills it with stock strong, you know, for shelf number four to sell number one, the fact of the matter is only 2% or 3% of the stock will be sold. Because there are incumbents sitting there a big boy sitting there other players sitting, you know, startup has the kind of traction to sell for shells or you know, for shells, you know, eight wide eight D, I mean, we're talking about something close to seven 800 bottles, either it's a personal gray brand or have planned or or a beverage brand, whatever it is no startup and that is the mistake most people make. So if my first advice to anybody starting in retail is always start very slow. The retailer is the key. If you win the retailers trust, then you can become a successful retail company. And shockingly, you win the trust of Bombay retailer. Trust me, I don't know how it happens. But the Bangalore retailer comes to know or the or the you know or the Andhra Pradesh retailer comes to Hyderabad retailer comes to know, so you have to go at it city by city patiently don't go and dump stocks because you will lose the retailer's confidence then and and also, all startups are financially tight at that time. Right. So at that time, why invest all of your liquidity into stocks which are not getting sold in the market? So yeah, that was that, frankly, is at that time again, I'm not I'm being very clear about it. At that time, I did not know what I'm doing. We did it a because of necessity, we were extending credit in the market. So we did not want to, you know, have too much stuff. And we did not have the financial muscle to build that monster. So it happened and later we realized, and once we realize we applied the same playbook from town number 101 to 500. But 02 100 when we were doing it, we did not realize it. But now it's a proven tested thing you know.
Krishna Jonnakadla 47:28
But in this case, you built your distribution all of it yourself, which means you haven't had intermediaries the traditional your factory default to clearing and forwarding agent to redistribution stock is to wholesaler to distributor to retailer, we have a bypass
Viraj Bahl 47:46
neck entire chain we have our own depot's in the in most of the states. But at that time also from company to warehouse to distributor to retailer, we we followed the whole gender only thing which I did not do. And I still don't I'm very, very clear about that is that we as a company, there are these large the one your uncle smoke about these large organized distributors who want the whole state or two states or you know, the whole chunk I the retail is the key. You just can't go and give your car's key to someone right? So once these these large distributors come in, they are literally holding you by they're controlling you, you know after that, so it's best to build it yourself instead of having one large distributor for state like Andhra Pradesh have 50 small distributors, because once you have one large distributor trust me, he will start pulling the shorts You know, he will tell you what to do, he will tell you what not to do. Till the time you become a Unilever or Nestle then then the big distributors also follow what the company says. But unseen till that time, you need to have your own distribution, you need to be control of your own destiny, if you if you may say so. But the idea I frankly we have never thrown a party, that five star party with models for our distributors or retailers. We have not done that in any of the states. Now we have done it the old fashioned way. One the trust took a bit more time maybe but that's how we've we've built a brand.
Krishna Jonnakadla 49:30
So let's talk about the product angle A bit. And because the product angle when you started, way back in 2017 we launched how many flavors do you have? Yeah, you launched with 14 and the 14 hour the One God the
Viraj Bahl 49:55
Southwest olive oil dressing sweet onion. And, you know, American must like those those kinds of products.
Krishna Jonnakadla 50:08
Right. So what I meant was more of a more of the International flavors, not necessarily Indian. So So my question there is barring the metros that that suits a certain type of consumer that prepares a certain type of food. So what was the thinking behind actually going? If you're selling to Domino's and Pizza Hut and Burger King? Obviously it is those kind because that's the kind of food they make. But when once you're actually deciding to go b2c, because when you talked about initially, building, if you couldn't get Mumbai, you built all the others. So I'm really curious how you chose those flavors. That was one was it an outgrowth of the b2b business? And second, when you spoke to all of these distributors, what was the conversation? Because if you are in tier two towns, if you're in tier two towns, you are not essentially expecting people to use main mail and then Southwest support lay there because their type of food is a little different. Or am I am I wrong there? So talk about why you chose the flavors. And did you get any pushback or any skepticism from the distributors?
Viraj Bahl 51:27
Frankly, the reason I chose these flavors, you know, and you have to understand that these flavors do hugely I am, as I said, I'm a really proud Indian. And frankly, it shames me that we have some of the best raw material available in India, but the the Indian v are still not using I mean, How shameful is it? That I mean, it might be a good product or might not be a good product. But turmeric chai latte Starbucks had to make turmeric famous in us before we the Indian food industry woke up to, you know, let's do something with with turmeric. So the point I'm trying to make that we have all our sauces do amazingly. How do I call it amazingly International, but I have always kept my endianness and the route of Indian ingredients. So let me give you a few examples. So the Southwest Chipotle now we actually import the chip, you can't make authentic Southwest Chipotle without without getting the authentic Mexican Chipotle pepper. So we will get get it. But what we will do is we will put a bit more than what a Mexican company might do. Because as soon as we put a bit more it becomes spicy. Much like your habanero burger. you consume the whole habanero pepper, something like that. So so what I'm telling the Indian customers you're getting the original Southwest, supposedly, but adapted to Indian taste. So for Indians who did not understand Southwest Chipotle, a, they did understand a spicy creamy tasty newness or a dressing. So you know it was that now sweet onion. Now sweet onion sauces, probably after ketchup the second most American sauce in the world. But if you take Reba sweet onion there's a beautiful Indian ingredient called Kalonji it's onion seed is called Kalonji in our in our sweet onion. And this is again I'm giving a product secret but in our sweet onion, you will find Kalonji seeds. And when you put it on your dressing, you're not realizing this. But when you're having a sweet American sauce, you get a burst of Kalani seeds bitterness, you know, which the Indians know because they've been having it in their food since the beginning of their birth. So that has been introduced. So it's an Indian flavor but it's American salsa, original American sauce. Indian eyes are Buju lochia sauce now imagine we've got one of the best peppers in the world but we we have totally you know given it a we're not even the Indian food industry is not even working. But our good luck your sauce is I mean mind boggling. Is it spicy? I don't have it with my you know on top of everything but why shouldn't Indian company when you got such a beautiful paper available in northeast India? Why shouldn't Indian company make a beautiful sauce out of it or or or any other noodles or jam whatever the thing might be, but we need to own I I hope very soon we'll be able to launch a beautiful turmeric based product in the market. So we need to do more as Indian food industry we need to do a bit more so to answer your question I I did two calculations at that time where all our mcdonnell's how many number of cities are McDonald's, Domino's and, and subway present and at that time, and if those cities and the number mind is much more than 100. So if those cities, people are opening up to McDonald's and Domino's and subways, then they know that these sources can be used, you know. And now let me take these sources to them. International sources modified to Indian, Indian, desperate, but while maintaining the authenticity of those sources, so my Southwest report live when you take it to global Southwest, supposedly, everybody will and I have taken it globally and people have given they will say, Wow, it's so tasty, but it's a bit spicy, you know, but for us Indians, it's not Oh, my God, I need Coca Cola on top of this or something like that. It's tasty period, you know, but it is still as authentic as the real deal. So we've kept the sauces authentic, but little bit of Indian palate tweaking has been done. And we again, please understand at that time, the aim was not to be in 550 towns, the aim was to be in 100 towns, and I realize that these chains are already there, people have some amount of focus. So we will have to go there. And slowly, slowly, we will do tasting sessions, we will do, you know, none of our honorable opposition bit, tier two, tier three, because, you know, maybe big bazaar became from zero to 500 stores. So there's sales, so everybody's sales are going, nobody put in effort in the tier two, tier three. In our case, because we needed the revenue, we went to tier two and tier three. And we, we put boots, you know, we actually put boots where we used to make people pay sandwiches and stuff like that. And this story, I will never forget this. I repeated this in the past. Also. You know, we were at a stall in a very small area in Punjab. And this lady, a rural looking lady, I'm just trying to make you imagine, you know, a rural looking lady came to our stall and she said, You calculator. So we said, Ma'am, we sandwiches. So she tried. She loved the taste is a case of and I said, Ma'am, you Bradley and we have this carrot and cucumber sandwich bread, you put it on this and put another bread and gave it to you, Katie No, I don't believe it. Because it can't be everything. You know, I'm getting carrots, also cucumber, also and sprint. And you know, it can come from one bottle, you make it in front of me and show me as she was not believing us. So we said okay, we made it in front of her. We gave it to her. She tried it, she loved it. And that picture. I mean, she bought 12 bottles and went. So it made me realize that, you know, nobody has come to them. And given that pocket the importance it deserves I mean, people have that kind of if they found something tasty. they've bought she's bought 12 bottles, I mean, I I have not seen that happening in in con market or or some of the most Porsche's markets when we put our stalls that a lady comes in, buys 12 bottles and goes away. So I realized that while we are this is an opportunity. So we made it small team. And we started going to smaller towns put in tasting booths and you know, made people that also kind of made us a first mover in all those markets. So that did well for us.
Krishna Jonnakadla 58:29
So that's awesome. So you're, you use these Pizza Hut Domino's chains and the presence that they had as a proxy for you. So maybe there's a market for something like that only one very, very interesting, very interesting times four or five dominoes, we would go there. Something like that. That's pretty interesting. Amazing. So let me ask you this. You're not allowed to write. For the vegetarian. You have all of it. Yeah, so the the sauce that goes into making the winner. So my question is, and then again, I don't know if this was because of the legacy of the business that your family was in back then. In a normal person's mind. The type of consumer that actually consumes a burger king or a Domino's or Pizza Hut is smaller compared to the consumer that actually consumes a fanatic or Lambert dalu or bangun. Berta, all of them also needs sauces while maybe bangin Bertha possibly doesn't need. It requires you to make everything from the ground up, but something like a aloo indalo or lamb vindaloo. This requires and even a lot of amonkar Allah wage mark and while all of that also are made from the same source for The ground up right. So, how come Did you ever think of that or was there some rationalization that your herma was chaotic so bonati So, she has her own. So, therefore, the chances of me standardizing that possibly doesn't exist was did those kinds of sources ever entered the domain of your thinking? If so, why did you not why did you
Viraj Bahl 1:00:27
find it was a COVID launch till about 910 months, we 910 months back, we never we never ventured into anything regional. The idea was very simple vision of we you know, like this is popularly said everyone knows this in India that these changes every 100 kilometers you know, and I did not want to get into a space even a mango pickle like a company which is today making mango pickle has to make one for Punjab one for North India up but for Delhi one for West India, one for South India, one for Andhra Pradesh. I wanted here we are bringing international tastes across the country. I did not want to get into gambit of five now go and go popunder Lucci but did not northenden open LeMond it's very different from the you know, the spices that changed. So we I was very clear that I don't want to get into 100 kilometers. God I can't manage it. It's not possible. So we will be responsible for bringing authentic international better for you and tasty products into the country. And it was very clear in my mind. Now 910 months back COVID hit and we launched a sub range called Viva chef. Viva chef we have products like you know, macnee butter, chicken gravy, but in that also bulk is Asian. So Kung Pao gravy, she has one gravy, you know, Thai gravies black bean gravy, we realized a lot of people are sitting at home and they want to eat Restaurant Style food. So we very clearly came and said, Hey, Mark, you have cabana wirkungen this is restaurant a shift of an hour kinda in a bottle. So it's already gravy, all you have to do is add water and chicken, everything else from onion to oil to fat to coconut milk, everything. You just add chicken or or vegetarian, add paneer or whatever. And water, nothing else two ingredients everything else is in the product. So but this was this is a small range meant for at home cooking during COVID. It's doing really well. But I don't know what the future would hold for a range like this post pandemic. But before before this, the idea was very clear. I don't want to get into a confusing taste but region debate I international teas. Authentic products really tasty, healthier, better for you. And that's a USP. So very
Krishna Jonnakadla 1:03:00
fascinating. Um, so then talk to us a little bit more about the creative process. How do you and I'll give you a little bit of a backstory. There's a chain of restaurants. In the US, it's actually a Mongolian barbecue. And Mongolian barbecue is very. So Mongolian barbecue. I could make that. Funnily enough, I'm vegetarian. And it's mostly a choice thing, not a spiritual thing. So, but the thing what Ganga is grill did in the US was it took normal Mongolian barbecues, which which would look very messy, and would just have meats and proteins, everything mixed up and separated it out and provided a great environment to have it. So a friend of mine called Lance Ronstadt. And he scaled it across the country. And he what he does is in his office, he's got a live kitchen. So there's administration and operations, and he's got a light kitchen. And what he does is he gets people from the outside, and the constantly cooking up stuff, dishing out stuff. So he gets up if he spots an interesting roadside chef or a small restaurant, Chef, he'll he'll invite them over. And then he'll get them to whip up something. And for him. That's the way of introducing new flavors of experimenting. And of course, there's feedback coming and him observing from other chains as well. What is your creative process? So you already spoke about the international sources? For instance, I'll tell you, I'll ask you. There are two sources which I love, by the way, the chili harissa, that's one and and then there is the chilli, oregano. Those two are beautiful. So you have to add me to the list of that rural looking lady, because the last time about a month and a half ago, even before I even knew that we were going to talk to you, I visited the local Nam, Doris and then I was I looked at a number of flavors and said Gosh, this fantastic and I'm going to take every one of those. So hurry clever, kill a cake. And then we came home and then and so the next question I was asking in my mind is I have not seen harissa. I've not seen a tape like this on oregano. So what's the creative process? How do you come up with this? How do you identify those? Do you have a method? Do you have a lot of
Viraj Bahl 1:05:55
r&d never made in the world before like so. harissa traditionally the pace but how do you convert that into addressing so you know one fine day I was ordering pizza from from from one of the chains and I said okay, yeah, please. Oregon no or chilli flakes and you know when it kept this thing down I realize that imagine the amount of pizza Domino's and pizza put sell together in the number of houses and every household I know asked for extra chili flakes in Oregon. Oh, I realize that chilli flakes and oregano is India's most widely condiment and it just dawned on me that my god what is happening? So next day I went to r&d and we created a source which was basically Chilean oregano which read in the unknown My mouth is watering well thinking about that sauce I really like that sauce actually. So you know Chilean oregano is actually a source which more households than even tomato ketchup because it is so widely spread everybody's consuming, you know a 35 rupees also. So I said we have to create and now you have that sauce with pizza. Pizza means tomato base. So I think everybody already knows the taste subconsciously of tomato chili already. flakes and oregano. Let's just combine all of that in a sauce. We put it out there and we did not realize it was an instant superhead everybody knew that his whoever tasted once would keep buying the bottle and and it also chili oregano came like that harissa. Actually I came across racism You know, when you travel, you come across different sources different ingredients. So because my mind and also the mind of the people who work in the r&d Center, we're always constantly thinking so I was traveling somewhere in the middle east and I got this research piece I just love the flavor. And I said you're not so difficult to consume this product you know, it was a painstaking thing. Why not? Why not you know take this product and make it convenient and and the best part is all the spices are the spices that Indians love cumin, chilies, you know, coriander, all of those spices that we have grown up with. But how do you take that make it convenient a bit tasty for India to consume. So we so ideas come when you're traveling ideas come and you're talking to people, you know, ideas come when you're when you're eating something local somewhere ideas come when you're talking about some specific like ooh jerky as ingredient I was speaking with someone and as you know, I realized that we need to do something with it. Knowing that it's a very small product like maintenir in his mid 20s is nothing but the humble hurry chutney baringa International munis and you know, so our maintenance is more indianized and let's say American maintain is but so we have taken not only you know maintained Korea we've also taken the spices of the Hardy chutney now company in America might not do it. They just take a Muniz mint and coriander acetic Muniz, mint and all the spices which go in the headteacher. So every product comes the inspiration comes from the most least expected times, right. And sometimes you actually actively go online researching products, something you actively go in the market, you know, so I have a sacrosanct rule. Obviously when I'm traveling, I have this even more at that time. But when I'm in India also I will choose the most high end retailer of that city I am in and they spend two, three hours just rooming in the in all the aisles and I might come back with 50 products. Now these 50 products might not be sources, but might be an inspiration for a source you know, which we can launch In the future, so, that is where all the product ideas come from. And, and, and you know, people so I, I you know, everybody Krishna is expert on food everybody. So the every person knows Game Maker, you know if you if each makeup panel and you know, your product Si, everybody will say is me or number come a geniza biometrika. Members, the my panel is always surprised. So let's say I have, I have five friends, five couples coming over to our house for dinner, what we will do is with us snacks, we will put two or three dips. Now without telling them that we was thinking of launching this or we are planning to do this, if I see people going for the dip again and again, that means people have liked it. But as soon as you know, and that dip, they will finish it also they will finish the whole bowl of that dip. But as soon as you ask them to boss him or launch her own cabin, or suddenly they will turn into Master Chef or someone like that, and they'll start giving me so much feedback. because food is everybody is an expert on food you know, and and rightly so. every customer I know what I like in my in my food, you know what you like in your food. So food is something which people should be made to us. I mean, we without taking the brand's name. We have done blind tasting with some of the biggest international brands for our dressings and their dressings. The blind tasting, we came out nine out of 10. And that international brand, which is one of the biggest brands in the world came at 7.5 out of 10. Now the same group, we got them tasted in our bottles, Rebus bottle and that, and you have to understand that audience had never seen a Viva bottle before in their life, it was an international audience. Suddenly, our score dropped to six, and the other brand score became nine. And then in the fourth round, we told them gentlemen, and and and ladies, this is what happened in blind tasting, you gave Reba more score than and they all challenges they said no you had, you know, the blah, blah, blah. So that is what I'm trying to tell you in food. What is most important is if people like the taste and go back for it, not not, because if you start analyzing, you will even analyze your mom's Rajma chawal which you have grown up eating. Because if your mom says arch tequilla she's made the same thing. But today when she asked you better as to when you will say mamina Pooja Cousteau. Well, let me over analyze name Ahmad for total Cambodia, you may see that but anyway. So you know, that's the thing. And I say this with when? Yeah, please one. I'm seeing I see
Krishna Jonnakadla 1:13:04
Viraj Bahl 1:13:04
I mean, I'm not I'm seeing it in the sink. Every consumer is an expert. And he needs to be an expert, because only the consumer knows what she likes best. But the r&d process should not be decided by that is what I'm trying to say.
Krishna Jonnakadla 1:13:24
Right? Exactly. Yeah. Oh, got it. Got it? Well, I think food is personal source God, religion, clothing. And you're entitled to have an opinion on every one of them. Nobody can tell you right or wrong. It is. It is yours and yours alone. Right. So on the feedback part, my wife cooks, and then she asks me, how is it? And and I tell her when obviously when it's great. I tell her it's great. And when I give her feedback occasionally, when something is lacking, I tell her, and she would have asked me a moment prior and I would have said yes. And because we would have just begun eating begin the meal. And I'm going I'm waiting for a relaxed moment to say and you said it was great when you are having a barbecue for feedback on outcomes. So over a period of time I've learned that I mean, she she cooks really well. Yeah, I've decided even if a small thing is lacking, I'm never gonna tell her that he's going to secretly Add salt salt is a very easy thing to give her for one night dinner. It's okay. So yes, yes, absolutely. So let's change. Can you still hear me? I can see you. Okay, for some reason, I can't see your video. I'm wondering if you're typing something I have internet connection. You can see me. Yes, okay. I was just trying to run a speed test. So I guess for some reason, I'm not able to see you. But still. So tell me, all of this, when you built it the first time around? Sorry. One is when you were involved with your family business, and then eventually you were involved with your own venture. Obviously, this growth does not happen with the right kind of leadership, how have those two ventures changed you? And what were some things you did personally are sort of watched out for said, I'm not going to do this from a
Viraj Bahl 1:16:06
plastic team. So you know, Chris, when I started, when I started away from the family business, and all of that, I was very clear about one thing that Viva will not be a moment of driven kind of company, it will be a proper organization, which, which hopefully, at one one time in our lives, at that time, I used to think that you know, will attract some of the best talent and so on. And I was very clear about that will be a professionally run, good place to work in kind of a company. Today, I'm pleased to say that our team of you know, our team will frankly, make some of the biggest names in fmcg. In India jealous, we have got a top notch team, it was very difficult for us for me to get them in a few years back. And you know, I had to woo some people more than I would my wife, to get them to join Viva. But that was the name of the game at that time. Today, so So today, I mean, today, Viva, we attract top quality, talent, I don't have to move on as much as I had to earlier. But today, our our, our talent is bar to none in the industry. I mean, as I said, probably really, really well talented people are very early in my career, like, at Viva about 2015 16, I realized that alone, I can only do so much, you know, and if I need to grow, if I need to become big, I need, you know, good quality people helping me otherwise I can't do it. So if if the person who's running, let's say, our operations, or our sales or finance, they need to be better at their particular job than me. Otherwise, what's the point, if my company is going to be limited by my talent, then my talent is the ceiling for the company. But if I say and, you know, easier, one of the most difficult things I've had to do as an entrepreneur is letting go, it's always in my opinion, always easier to do than to get it done. But if you get that put in that effort of getting it done for four or five, six months, and your relationship falls in place with that particular person, then life becomes very easy. Now, with my you know, some of the key people at at at, at my organization. I mean, the relationship is such some of them are very close friends, some of them like, you know, some of them get me so well, that the head of r&d, she and I can actually complete each other's sentences because we have been working together for such a long time. We totally know what each other we are thinking. So sometimes it's really weird. I will tell her Joe Smith, Smith, vesicle dinner, and the person who's looking at us will think man bonkers bonkers people. But amazing thing is she will understand what I'm saying. And she will also you know, say something along the same lines and I will understand. So the team, frankly is I think one of the biggest differences. I realized that early on in life and I realized already learned how to let go of of how do I put it like I'm not saying power obviously you know, we was always mine and I'll always be the head of Viva and always but you know, it is difficult to give up one department and let that person then run it and your only. Only Rosie Oh Really access to that department has to be through that leader. Because if you're keeping the leader and then you're undermining him by reaching to is number two, then number three is, then please don't keep a leader, you're better off without a leader in that department. So it's very important to hire a leader take three, four or five months to build the relationship and the trust. But once that is done, then then I have to take a backseat. Otherwise, it's not fair on that person. Because if I intervene into that person's department, obviously, his number twos and number threes will always want to be close to me, that that and since specially, when in most of the cases, those number twos and number things were reporting in to me before this, so the relationship is stronger and longer, you know, in terms of time. So it becomes very important to set the ground rules and I have learned the hard way now it's very clear, I tell the person joining that three, four months you will take to you know, take over from me those three, four months, I'll be involved with your team. And I made the team sit down and read tell them three, four months I'm involved after four months professionally, all professional related. Liver related matters personally, your friends will always stay friends, but professionally, all these matters will now go to the H od and not to me. I mean, now Now we all have become a part of an organization that I don't have to spell out these things anymore. But earlier I had to it was done. And and, you know, yes, there is some amount of friction, there's some amount of churn and all of that, but I always feel as an entrepreneur, if you can, don't keep people in the gray, let people know the blacks and whites of the thing because green is where you know and I always joke about this other cases of suicide commit Karani knows who do boss the those who said come at Carnegie. So, everybody should have one boss because one was worth two verses does not work. So, you know keep people in black and white people like to know what they can do what they cannot do, what are the limitations of the organization what is the culture of the organization and the entrepreneur has to always evolve I'm the same guy who used to do everything himself right because we could not afford to have quality people then there comes a maybe 02 100 crores You know, you're doing everything yourself 100 to 200 you're learning to let go 200 to 500 do you know you have to take a different role of organizational leader who can you know influences people and and then you know, you have to take on a different role. So, like, my role is very important, like the culture of the organization is very, very important to me, you know, if we become a large company, but we are no longer nimble footed, it will be a very sad day for me. So, I ensure that the energy of a young company always stays even as we grow in size. So, that is something I keep with myself, I keep new new products, new ranges, all of those to myself, obviously, macro diseases like new plant, you know, we've got really big plants Now, remember that 70 ton order that I was talking to you when we got from dominance and I said well life upsetting at that time, it was one month's production today it is like five to 10 minute production, you know, so, so, plants become vague those things have become so, as an entrepreneur, you always have to evolve if you do not evolve if you do not, you know, but things which I keep close to myself Are you know, new product development, because that is the product which goes into the consumer, you know, that marketing what the language that we speak to our consumers. So, I will have a you know, a very significant influence on what to marketing which goes out to the consumer, I might not have involvement in the technical aspects of the marketing, you know, Kay, kidney re jewelry gallery, but what Viva as a brand is talking to the consumer is very important to my heart. So, you know, think like those. Yeah. Right, right. Well, the Yeah, but you know, which is frankly very
Krishna Jonnakadla 1:24:25
well the CEO is the best salesperson,
Viraj Bahl 1:24:27
every other salesperson has to be the best ambassador, even the head of sales has to enter the sales meeting. Please understand that because of my product knowledge, my passion for the company, I'm always going to be the best salesperson for the company. So you do not want to let the other job like your department head and you can go for a sales meeting alone, sure, but your department head you and the person who reports to him cannot go for a meeting because that person will realize that little mini boss had much more knowledge of skee ball squared. So you have to keep these things kind of, you know, in your mind when you're dealing with so many people at the same time. Good.
Krishna Jonnakadla 1:25:13
Right, right. That's pretty interesting. Amazing, I've never had anybody talk about that, in the in that way, even if you do go to that meeting, I'm sure or have to go into a meeting with that kind of a config, you have to be twice as careful not to undermine that other person. Absolutely. Because I ultimately you could all you, you just cannot facilitated it, then and allow the mind to look better than the person in front of the client, then then they look better than I agree with you, I have seen in in some of the industries that I've worked with, and larger companies, we tend to take, there is always this notion, the sales leader, the sales leader is supposed to be quite knowledgeable, and most of the time, they actually unconsciously end up delegating upwards saying, Okay, I'm taking the President and the President will close the deal for me. So the President is possibly just the icing on the cable has to become yours. It is not supposed to
Viraj Bahl 1:26:39
be to be in conference rooms. They're fantastic, fantastic team. They don't need me to close any deals, they. So I'm just like, you know, like a brand ambassador slash puppets that we make use of sometimes, but but other than that, they don't need me for that I don't even have to worry about their talent is exceptionally good. So I don't have to worry about it.
Krishna Jonnakadla 1:27:19
Let's talk about culture, you briefly touched upon it, what's the Have you consciously built a culture? Yes, I
Viraj Bahl 1:27:30
started out we could not afford, you know, like the best talent, then there was time that, you know, we could afford the best talent, but that talent. I remember feeling kind of embarrassed about my office, in one of the interviews, I took with a very good company, senior professional, because our office was not, again, nothing wrong with that guy, he had always worked in MNC and MNC is come with the kind of office that they come with. I mean, he was used to it, you know, we we did not have Saturday's off. till two years back, we were 16 weeks. And these were challenges. So one of the things I knew that if you want to get good talent, it the company needs to be a five d v company because it's not you know, I have heard a lot of Indian entrepreneurs saying your own good buddy, a chill Zindagi other, the other head to other thayar whatever, it's not a cheese in the media, that it is what they have been working in for the last 20 years. If you were if you want a top quality talent, who's been having a five day working week, you cannot expect him to come to vivo on a 60 working week his wife will not only allow you know forget about anything else. So, you know, these things, you have to you know, keep in mind of you know, so when we became a five, five day week company, it became easier, you know, to attract some of that talent, it a good office made certain things easier. But more than that, culturally, so I have had meetings so one of the things when I'm interviewing for you know, we as a company are people Joe Zameen say would give us a way to I remember, you know, I was interviewing this company for a CXO level job. And you know, he he said something, I remember Jackie Geiger was of course online and I realized that a person like this if it does not go there because he will be taking over from me and I'm a very you know, leading from the front kind of a guy but a guy like that who does not be with this people he is only working from from from you know, er p it will not he will not maybe he is exceptionally good. So, whenever I am hiring specially in the senior people who will directly be in influencing the culture of the organization going forward, I always am thinking I need the best talent. And Part B, I want this talent to be able, I will know in the first two or three meetings or four meetings that will gel in reverse culture, you know, so that is something that, that, you know, so, like, we call ourselves Vbar family, we stand by each other as a family also. Yes, I'm the head of the family as the promoter and the founder, but, but the thing is, we we stand by all people in any way, in tough times we stand by people we have, we have a system of respect, the first line is, do not treat people the way you do not want to be treated in sales in India, specially there's a way of talking to salespeople, you know, abusing bad language, blah, blah, blah, diva, that cannot happen. So I tell people, if you are okay, that's your senior abuses, you then you abuse your juniors, that does not mean you don't pull them up, you pull them out, but you cannot abuse that culture is not allowed respect, we are an Indian company. Yes, the MNC is have a culture of first name, but if I have someone who's you know, old older than me or much older than me or 10 years older than me, if I put a G in front of his name, that does not mean that we become any less of a organized organization in I understand and you know, the MNC is which come from us, the rule is everybody has to be called by first name. But the fact is that we are in India. So what is the problem, if you have to put a G in some not because of his rank, it can even be to a p on but if the pianist 55 years old, why can't you put a G in front of his name, because we are Indians at the end of the day. So the culture is a mix of Indian values, as well as global outwardness. You know, we do have flexible working hours, we do have, you know, flexible timings. And we we do have these things. Also, we do have five day working weeks, we have a very transparent organization, all cabin, including mine, everybody's cabin is made of glass, you can see from one end of the office, right to the extreme other end of the cafeteria. So all those things are there. But at the same time, I am conscious of the fact that this company is an Indian company. And I mean, I have no I am not old enough to say okay, or let's be disrespectful, or let's be like this towards our people. If you can respect someone who's older in age, I'm not saying you know, don't pull them up in their work or so on. But so it's a combination of the talent that you've got, and their outlook and our Indian ness. That's what the culture does. And, and frankly, it's worked for us, Krishna, we have almost like a politics, free organization, everybody helps each other. The other thing is we work on whatsapps we do not work on emails. So you have a problem. Ask that time you get an immediate response will be I hate the culture of me. And you know, my colleague has said in three seats away, but to cover my ass, I will just write an email so that you know, so that is frowned upon go talk to him find a solution. And if it's if it is money related, and you need it on email, for the record, put it on email for the record, but do not say that I send the email my work is done. Now forget about it, you know, and if you need a permission, you're not getting it on email, put a WhatsApp get permission move on, you know, that's the way it should be. Get it done. Get it done. Be respectful, get it done. Be Nimble footed. And yeah, that's our culture, right.
Krishna Jonnakadla 1:34:07
So get it done, get it done. So don't wait for get it done. So, two more things. Frankly, whatever. Worked out I mean, what have been some
Viraj Bahl 1:34:25
retail and launching with the products that we thought we should launch in, you know, some of those decisions have worked out very well for us. Putting up our second plant like you know, you have to understand our second plant is humongous. It's more than 10 acres in size. It was at that time was very worried that are we biting on on to more than we can chew and we built like a humungous facility over there. But it really paid off especially in the last one and a half years. It is really paid off. We know capacity. It wasn't a constraint during this mess. Some of the optimization we did, it was very expensive at the time, but it really paid off. So a lot of decisions that worked, some have not worked. Like I have made to, you know, bad hiring decisions in my history at Viva to CXO level bad hiring decisions, were very tough on me emotionally, you know, but you when you know that the it's not the right person, it's best to not because of his problem, it can be a mutual thing. But it's best to just pull off the band aid and move on, you know, you just can't keep it in two months, you get to know, all in three months, you get to know them, you just can't stagnate for another nine months after that. That has been very heavy for me to do. And we launched a range of products. When I got some amount of success with this first 14 products. The second range that I decided to launch at that time was a range of tomato ketchups. And at that time, we were tomato ketchup is a large category, we know which is which is which is dominated by you know two of the country's biggest food brands. So I think I got into catch up way earlier burned a lot of money in that. Now cut to last year we relaunched our ketchups. And frankly, now we're ready to be in that space. I think we came into ketchup way before we should have up Neo Cox's other breweries gambled, led, but now we have launched India's first preservative free tomato ketchup range. We are advertising we have distribution muscle, we are sustainance power. So I think that was one big mistake that I made purely my fault. But that again taught us a lot that you know, you need to stick to certain categories before you get certain amount of size. But if I had to put a score more good decisions than bad decisions?
Krishna Jonnakadla 1:37:27
And do you ever obsess that you're going to any time at all, lose sleep that all of this could be under attack, I
Viraj Bahl 1:37:37
mean, I make it as difficult for so if let's say again, you were to open a open source company, or one of the biggest boys come in the sauce, you know, in this area, what we have done is we have now our revenue, we don't have one hero product that you know, you come in this product and you will get 50% of Weaver shed, he's got multiple boards with 555 percent share, you know, then we've got multiple boards a 3% share, then we've got multiple products with 2% shares. So we don't have a big face and a very long tail we you know, so you will have to come with 50 products to fighters A that is very difficult. Be even if you go and attack us in 123 cities, we all make a density lap or tightness in over 150 to 200 cities to make a dent. So we have spread ourselves in a way that you know. Yes. Seeing this obviously I'm scared all the time, you know, because we have become of size and stature that we you know, the big boys have started taking note of us and that does worry me I would be very foolish of me to lie here that you know I don't worry about that I worry about it. So it is somewhere and it also kind of keeps me on edge to do better to be honest. So I don't want that very to go. So keep trying keep launching new products keep doing tastier. better for you for you. Yes. Yes, yeah, so maybe maybe unprofitable COVID The second way so second
Krishna Jonnakadla 1:39:34
exit you intend to run this there's no exit in and so there's no exit on the horizon.
Viraj Bahl 1:39:44
See, Krishna, the video quality is not so good. But you can only go on the side of my own. I can't do this all over again. I can't. I can't build another distribution network all over again. I don't have it in me. So I will run Viva till the time, you know, I don't see all over again, I have no intentions of selling as of right now. But if I do decide to sell maybe 1015 2030? I don't know when but if I do, I am not going to do it again. I, I can't build another distribution network. It's not going to happen for me. So as of right now, there are no plans to exit. Yes, we do have plans for international. One of our next growth engines will come for international In fact, had COVID not happened last year, we're
Krishna Jonnakadla 1:40:35
Viraj Bahl 1:40:37
started doing some some decent work there. But that has been delayed indefinitely till the time the world a better place.
Krishna Jonnakadla 1:40:57
Awesome, awesome. But as this has been a fabulous conversation, you've gone into all i loud, a lot of color around innovation, sporting products, the scale, and some of the nuances that you spoke about. And I was just listening to you in rapt attention, because I didn't want to interrupt the flow. And I know you're going to scale create a peaks. The taste is unique. I think your leadership style, which is leading from the front and the culture that you've built, this doesn't happen by accident. There is definitely serendipitous accidents that happen, but they're also orchestrated stuff, which I think you're working on. So this has been a fabulous conversation. And I say this to every founder that's on our show that mirages of scale we'll come back and then talk to you when you scale a new peak and when you I would I opened up the race and any closing comments
Viraj Bahl 1:42:02
that you would like to add it's been a really good conversation and thank you for having me. It's been a great great time. And and I love the conversation. Hope to catch up with you soon without without without the interview model in a better way.
Krishna Jonnakadla 1:42:22
I seem to have lost you. Hello. I can hear you and see you. Yes, I can hear you and see you. Okay, Rach, can
you hear me?
Viraj Bahl 1:42:47
So I will say thank you for having me. I did not anticipate this to be such a wonderful
Krishna Jonnakadla 1:42:52
guy. I lost you there for a second and
Viraj Bahl 1:42:57
it was really good. Didn't feel like formal discussion. Thank you for making me so comfortable. Really good discussion and did not mean really nice. Thank you so much for giving me the time.
Krishna Jonnakadla 1:43:09 Thank you, Viraj
Krishna Jonnakadla 1:21:40
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