When Shruti and Bharat Tibrewal had their first baby, the couple started looking at various baby food options to ensure optimal health benefits for their newborn. But they soon found out that very few baby foods come without preservatives and refined sugar, and no such brand was available where they lived.
As a nutritious diet is crucial for a baby’s growth, baby food was traditionally prepared at home all over India. But with a wide range of products from big brands readily available in the market, their demand has spiked, and homemade recipes have taken a back seat. The baby food segment in India clocked a revenue of $32 Bn in 2021 and will grow further to touch $47.8 Bn mark in 2021, according to Statista.
However, a lot of packaged baby foods have also come under increased scrutiny for containing potentially dangerous ingredients. For instance, in April this year, American baby food majors, including Nestle, Beech-Nut and Happy Family Organics, were probed for containing arsenic and other toxic metals.
The Lancet, one of the oldest and best-known medical journals, also published a report that said baby foods in India have high sugar content and contribute to childhood obesity, diabetes and other comorbidities in children. Plus, there will always be other health risks triggered by consuming food with high preservatives, a practice common in the industry to increase the shelf life of the products.
As the world becomes more aware of health concerns and food safety related to commercial food products, Indian startups are coming up with healthier solutions in the baby food space. A host of new-age companies such as Nutreat Life, Happibo, Early Foods and Bebe Burp now offer organic baby foods free of processed sugar, salt and preservatives, thus providing Indian parents fresh and natural alternatives to popular baby food brands.
Bebe Burp’s Homemade Alternative
Set up in 2017, Surat-based Bebe Burp is the brainchild of the aforementioned Tibrewals and Shruti’s brother Chirag Gupta as all of them want to safeguard infants’ and toddlers’ health from chemical exposures while ensuring major nutritional benefits. The startup manufactures cereals, fruits and vegetables based baby foods without using preservatives or processed sugar.
Bebe Burp started as a homegrown brand and the cofounders have always been very hands-on, taking an active role in the manufacturing and the supply side of operations. The trio started by offering free samples of the product to build a customer base, but business growth was slow. Gupta told Inc42 that the startup made one or two jars of baby food a day based on pre-orders during its initial days. Currently, the company has 20 SKUs across four product categories — cereal-based mixes, cookies, puffs and protein powder — and sells more than 3,000 jars a month.
The startup procures its raw materials from the organic brand 24 Mantra to ensure the quality of the ingredients. Besides, it conducts regular quality checks at the manufacturing unit and also runs an external check to determine the nutrient contents of the final product. “Our production takes place twice a month. During every production cycle, we send our samples to Mumbai-based Equinox Labs, which is our partner. We test for all major nutrients such as protein, calcium and fibre,” says Gupta. The company also got certified by the Food Safety and Standards Authority of India (FSSAI) right after its launch.
Bebe Burp has so far sold more than 50K jars of baby food and has a repeat purchase rate of 66%. “We have a month-on-month growth of 22% and we are on track to achieve a revenue of INR 50 Lakh in FY2021-22,” says Gupta.
The Growing Need For D2C Enablers
The trend of selling directly to customers prominent in the 1990s is making a comeback, but this time, it is riding the digital-first wave for fast growth and better profit. Be it marketing or sales, brands are actively looking to eliminate the middlemen in an attempt to build a more meaningful connection with consumers. And the digital playground has enabled them to knock down many barriers such as geographic restraints, cringe-worthy customer service and complicated transactional laws.
As the D2C wave hits the Indian market in a big way, some businesses are tapping into this opportunity by offering services at various points of operations. Known as D2C enablers, these businesses provide platform business models to managing warehousing and logistics to social media marketing and more. These enablers have played a key role in lowering the entry barriers for many startups looking to go the D2C way.
Bebe Burp is part of India’s D2C wave, and just like many of its peers, the small size of the business makes the overall management of all its processes a cost-intensive affair. In essence, the ecosystem, with all its small and medium enterprises, requires support to grow and scale at a fast clip.
“One of the major hurdles we faced was not knowing how to do brand promotion efficiently and reach a large customer base online. Offline sales have various middlemen who help businesses reach customers. But being new to ecommerce, creating brand narrative and marketing came to us as a unique challenge,” says Gupta.
Incidentally, this is just one of the many challenges that a business faces when it enters the digital space. A lack of guidance and hand-holding hinders many startups and their founders from reaching their full potential.
For Bebe Burp, the solution came from Shiprocket’s Rocketfuel accelerator programme, for which it got shortlisted. It is a two-month programme that includes various workshops and sessions on marketing, product placement, packaging, building brand narratives, funding pitch and equity management. The first season started in November 2020 and completed in January 2021. The first cohort included seven companies, and Shiprocket announced that it would invest up to INR 3.5 Cr in the shortlisted startups.
“The Rocketfuel programme helped us understand how to build brand awareness, a problem that has plagued us all along. The mentors at the accelerator programme were always available and offered guidance and help at every step so that we can follow the right path,” says Gupta.
Understandably, D2C enablers and accelerator programmes like Rocketfuel are crucial for the growth of the D2C ecosystem. While the services by enablers help remove operational bottlenecks, accelerator programmes address a more fundamental problem — that of educating new entrepreneurs and helping them understand the market through the lens of industry veterans.
“An important gap with a lot of rising startups is an understanding of their exact potential and how to work with an investment network to achieve goals over the coming years; Rocketfuel plugs that gap and allows rising brands to start scaling, creating new categories, and competing with bigger players,” Saahil Goel, CEO and cofounder, Shiprocket.
Gupta also credits the significant growth in BebeBurp’s sales to Shiprocket. According to him, D2C enablers play a vital role in the growth of early-stage startups and SMBs by carrying out specific operations for them. This leads to resource optimisation and startups can focus more on core activities and scaling up.
Due to the spurt in the number of internet users that stands at nearly 700 Mn at present, especially during the ongoing Covid-19 pandemic, Gupta sees a huge potential in the D2C space as companies can easily reach a wider customer base outside their geographic domains. Revealing its plans ahead, Gupta tells Inc42 that BebeBurp is likely to raise seed funding in 2021. The founding team also intends to expand its operations to more cities, especially out of its home state of Gujarat. Mumbai and major southern cities remain a big part of Bebe Burp’s growth plan.