Nikhil Doda, Co-Founder, Director & COO of Lahori Zeera discusses capacity expansion, new product launches, pricing, ₹10 packs and plans to enter GCC and neighbouring markets.

Lahori Zeera is looking to build new "hero" brands as its co-bottling model helps ease the manufacturing constraints that have limited its ability to scale newer products. Nikhil Doda, Co-Founder, Director & COO of Lahori Zeera, said the company plans to expand Lahori Aamras and develop more products that can become sizeable brands. The company also sees significant room to grow in India, where it is present across 20-21 states, while it is in discussions with partners in Oman, UAE and Sri Lanka. Doda said Lahori Zeera could enter at least three to four markets outside India in the next year to 18 months.

This is an edited transcript of the interview. Q: How much zeera does Lahori Zeera actually have? A: It has zeera in quite a bit of a format. We use actual roasted cumin, which goes into the recipe, which people can see as a floating ingredient also. And then there is also oleoresin, which is like extracted cumin oil, which goes into the recipe, and other than that, there are jeera flavours as well.

A: It has zeera in quite a bit of a format. We use actual roasted cumin, which goes into the recipe, which people can see as a floating ingredient also. And then there is also oleoresin, which is like extracted cumin oil, which goes into the recipe, and other than that, there are jeera flavours as well.

But again, it is not something which is measurable when it comes to percentage in a drink because how much coffee would a coffee have, or how much tea would a tea have? It's always 2-3-4%. The rest is water and other ingredients. So, it's similar for our beverage as well. But there is natural jeera in different forms, which is being used.

Q: Reports suggest that you sold almost 5 million bottles a day this summer. What is that number really like? A: It is 12 million bottles a day this summer. Q: How has Lahori Zeera stuck to its market-penetrating price point? How are you hedging against raw material inflation, whether it's input costs, packaging or logistics?

A: Back in the day, for a new player, we had to be at an entry-level price point. You have to give reasons to the consumer to lift your product and try it once. Back in the day, Coke, Pepsi and all the big brands were only operating at a ₹20 price point.

But now the category has changed and evolved, thanks to Campa and the recent disruption being created in beverages. Coke and Pepsi have now come down to the ₹10 price point, and there are enough and more options available at ₹10.

But thankfully, in the short journey so far, the brand has created a strong relationship with consumers. So now it is not just the price point that drives sales for us. Consumers are coming back for the product, and they love the product so much that last year we started doing big pack sizes, and already significant volumes have started to come from non-₹10 price point variants. To be exact, I think 15-16% of the revenue, and it's just the second year that we have started with big variants, 16% of the revenue now comes from the non-₹10 price point. We see that will substantially grow in years to come.

But thankfully, in the short journey so far, the brand has created a strong relationship with consumers. So now it is not just the price point that drives sales for us. Consumers are coming back for the product, and they love the product so much that last year we started doing big pack sizes, and already significant volumes have started to come from non-₹10 price point variants. To be exact, I think 15-16% of the revenue, and it's just the second year that we have started with big variants, 16% of the revenue now comes from the non-₹10 price point. We see that will substantially grow in years to come. Also, we're happy selling at the ₹10 price point because we believe the kind of product we have, with accessibility, just opens a very big total addressable market (TAM) and a very big market for us. India is a country of masses where, if you have such a product and you still make money, trade makes money selling at the ₹10 price point, we make money selling at the ₹10 price point, and it's kind of a blessing to be there.

Q: You introduced Lahori Zeera diet sweetened with stevia. Are you also looking at region-specific flavours? Is that in the pipeline for this festive season?

A: Up until now, the flagship product has always taken the lead when it comes to contribution to the top line, still contributing about 85-86% in terms of total revenue. The single stock keeping unit (SKU), Lahori Zeera, is the flagship product.

But now, the biggest bottleneck so far for us has been the backend, the manufacturing as sales have always stayed ahead of the capacities that we were able to put up every year. So, in summers, every time, we are sold out.

So, keeping focus on other SKUs has never been the case so far, but now with this co-bottling model, we feel that in years to come, we'll have enough and more capacity, because now that's not a challenge anymore.

The focus would be to find other heroes and find a few more SKUs which turn out to be a big-number brand, like a ₹500 crore brand or ₹100 crore brand.

So, this year we did Lahori Aamras. It was our first product in ready-to-serve beverages, like non-carbonated beverages, and it has done well. We just had one small line because it was a trial product, and we were just selling some limited geographies in core areas.

Next year we're doubling down on that. We have ordered a few more lines, and we'll be doing that in all the geographies. So, we see that would become a sizable SKU for us, a sizable brand for us after Lahori Zeera next year itself.

And there's a similar thought process to develop a few more. We have a dedicated research and development (R&D) centre where we have prototyped a few more products which we feel can do sizeable numbers. Since we have the entire infrastructure, we have 8-10 lakh touchpoints, we have a big sales team, we have the entire distribution.

So, the idea would be just to find a few more heroes while continuing to grow the hero product that we already have. Q: What are the expansion plans across India? And do you have an eye on global markets as well?

A: India is still very much unpenetrated for us, even though the brand has a presence in about 20-21 states. But most of the states are on very nascent journeys when it comes to being available because we moved out of the north only four or five years ago. States like the eastern part of India, like Bihar, Jharkhand and West Bengal, are only one to one-and-a-half years old.

So, there's substantial opportunity, and those geographies are doing well. They're contributing sizable numbers in the first few years of existence only.

So, the idea would be to keep reaching new shelves and keep strengthening the brand presence across these geographies.

And then, I would say not global, but for sure the brand deserves to be available in Gulf Cooperation Council (GCC) countries and neighbouring countries like Sri Lanka and Bangladesh, where we have been constantly approached by people in the beverage industry who are active in those countries when it comes to distribution and even co-bottlers.

And then, I would say not global, but for sure the brand deserves to be available in Gulf Cooperation Council (GCC) countries and neighbouring countries like Sri Lanka and Bangladesh, where we have been constantly approached by people in the beverage industry who are active in those countries when it comes to distribution and even co-bottlers. Those guys are keener to associate with the brand, take this brand over there and launch it in those local areas.

But, up until now, the focus was only to service the demand which is already there in India. So, we didn't deviate from the focus, just keeping straight. But now, with the co-bottling structure, the backend would keep growing on an automated kind of structure.

So, we are already in conversations with people and bottlers, different partners in Oman, UAE and Sri Lanka, and things will mature soon. And probably a year, a year and a half from now, we'll be in at least three or four other countries other than India.