Transcript
Speaker: India did not have an amul for eggs until Abhishek Nagy built Eggos, which is today India's largest branded eggs company. The next time you're ordering eggs on LinkedIn, there's a very high chance that you'll be ordering a pack of Eggos. In this episode of the Founder Thesis podcast with me, Akshaydar, Abhishek talks about how to build a brand in a commodity market.
Speaker: Abhishek Negi, you are the founder of Eggos. Welcome to the Founder Thesis podcast. My first question to you, what's your favorite egg recipe? Hi Akshay, thanks for having me on the podcast. It's really nice to be here.
Speaker: My favorite egg recipe is two egg omelets. In one like what way? What do you like about that? Oh, but very, very simple. It's with, the you know, little bit of butter, eggs, a little bit of salt and that's it. You know you can have it it straight up. You can have it with bread or you can have it with a coffee or tea. there's No piyas, the butter, nothing. yeah Just simple. so So for me, it's the most simple thing, which which is my most favorite because for me, it's very easy to prepare.
Speaker: But definitely to have it with more, you know, flavors is, is you know, is sometimes can be good. You know, I noticed that ah India where ah we don't have the taste for and runny eggs, you know, like egg which is like half cooked or something. Whereas in the West, that runny, creamy egg is like treated as such a delicacy. The first time I went abroad was the first time I tried that and I thought it was pretty good.
Speaker: But India, like egg must be thoroughly cooked and all. But what's your take on that? So in fact, in my experience, especially in areas of East India, ah for example, Jharkhand, and these were the areas from where we started Egos.
Speaker: ah So there is a local street food of Andapoch. So they will prepare half boiled, you half cooked egg in a, you can say, cylindrical circular kind of a utensil.
Speaker: And they will just flip it. On a, you can say, on a serving, my on a serving house. eat leaky tricky yeah where i think correct i think So just make it. Yes, yes. So that that's that's very famous in in East India. Even college study is… So the yellow is runny in that?
Speaker: Yellow is runny, yes. Okay. it's cooked from the outside and the yellow is fully runny. um But I think towards the west and south, I've seen more of boiled eggs, omelettes. Bread omelettes is very common in Delhi and north area.
Speaker: It's very, very common. I think during winters, lot of, you know, ah pop-up, you can say lot of thelas will pop up. with boiled eggs, loose egg sales, these things will start to happen. We have seen many creative Therawalas in Delhi and also in Mumbai area who will make really fantastic dishes out of eggs. But you know, one of my favorites are from Gujarat.
Speaker: From Surat, from Ahmedabad, there are dishes like, Anda Ghotala, Anda Locha. Very, very unique. Very, very unique and distinct, which is, I have seen it only in Gujarat. And that too, you know, we have a perception that Gujarat is an area which will be pure vegetarian. But it's not like that. If you step out, the street food is used in street food.
Speaker: It's very common and it's very, very flavorful and tasty. It's such an easy food. no it's It's so easy to transport and high protein. But I'm curious, ah you said you started Eggos in Bihar, not in a metro city. What made you choose that area to start in?
Speaker: So I think I would say the thought about Eggos came to us when we were in a metro city, we were in Gurgaon. And at that point of time, we were, you know, we were disliking the the experience of buying an egg, cooking an egg, doing everything with it. So, you know, I personally love eating eggs. I've been having two eggs a day, every day since my childhood, since as far as I can remember. And, you know, back in Gurgaon in 2016-17,
Speaker: I remember that eggs were sold only loose. There were no packaged eggs or branded eggs back then. It was just eight years back, right? And they were very expensive. Kegs kar kek brand to thai since forever. Yes, yes.
Speaker: But their distribution also used to be very limited to supermarkets and very up markets. But in general, in the market, ah it used to be unbranded eggs.
Speaker: um And, you know, the experience used to be really bad, at least for me, because you're buying eggs in poly bags, many of these eggs are dirty, many of the eggs are smelly. By the time you get them home, one or two eggs would you know develop a crack.
Speaker: And once you break it open, ah you know, the yolk will be runny, albumin will be runny. So, mean, it didn't come to me, but, you know, eggs is such an important food product that you have to eat, but we used to consume it, you know, with with just, ah you can say, a pinch of salt, ah figuratively also.
Speaker: ah So, the that was when ah we we got very interested that it is a product which is consumed by a majority of India. um And it is a product where our per capita egg consumption, ah but ah eggs per person per year was 63 back then, which was one fourth of global average. Global average is 250.
Speaker: And countries like China and various countries in Southeast Asia have average of more than 350 and 400. So we are we were way below. But what was interesting to us was that in this entire sector, there was no national level plan.
Speaker: Like you mentioned few few brand names, they were local family companies who were trying to build ah you know so a certain brand name for themselves. But there was no national brand who can be available in 20 cities, 25 cities, can really solve a problem, can really standardize the value chain. eathan And ah for us, it it was very interesting.
Speaker: Because we were at a point of time where we were keeping an open mind, we were exploring everything. For us as ah as a founding team, one thing was very clear. We wanted to do something in the agriculture space.
Speaker: Why agriculture? See, I think we we strongly believe that with the help of technology, um you know you can do so much more ah and improve the quality of the agriculture products.
Speaker: ah make your you know supply chains more predictable with more, once you start generating a lot of data, you can make predictions, you can make your systems more improved. But more importantly, the core thesis which was close to me was that at that point of time, I strongly believe that the need for clean and hygienic products ah is going to rise. And I think back then I remember there was a wave going on for organic products.
Speaker: Everywhere, every category, there was an organic wave going on. That organic po potato, organiconian organic organic oil, this, that. Everything was turning organic. But organic at that the price point is not sustainable for the entire country, for all income groups, for all masses. And also supply is very limited. It's very difficult to produce organic products. You have to follow certain protocols and cycles.
Speaker: So one thing was clear that, you know, organic, so what that taught us, um you know, what this the insight it gave us is that the demand is the same income groups, you know, people who are mothers, parents, families, they have better production for their families.
Speaker: But when we look at agriculture as a whole, the entire value chain is largely unorganized because you know these are coming directly from farmers. Farming practice practices are unsandardized. Every farmer is trying to do it like their area does and like they feel the farming my method is best.
Speaker: Second, India as a country is protein deficient, vitamin deficient. So we need to adopt lot more animal food products. So be it poultry, be it dairy, be it eggs, more importantly, we need to adopt these.
Speaker: And ah ah ah so, you know, and lastly, you know, the the need and demand for clean products will only grow. It's not going to stop. And I think that thesis, um ah you know, stood right. ah It is down the line. ah The entire, you know, ah any category use you see, be it oils, butters, even processed food now, the demand for clean label is is there. Everyone wants clean label. Everyone wants clean products.
Speaker: So that has happened. But for us, ah we wanted to do something in agriculture because we felt that if if we have to really solve something and if we have to get to the root of it, ah then I think we need to pick a food item which is very close to us. So we are passionate about it because we love that food product. But second, if we really solve ah for that value chain, it should build a large enough business that can run for generations. and can really cause the a large impact on the lives of Indians. So that was a mix of things.
Speaker: Like you were at this stage coming off a failed startup, if I may use that term. ah You had spent two years building a ah like a taxi aggregator service. ah what What were the learnings from that? what you know but and just Just give me a little bit of the pre-story and how that experience might have shaped your decision to do something in the agri-space and do something.
Speaker: I mean, you know, you must have thought that this will be a business model, this will not be a business model. And that taxi aggregator probably was like your VC-fueled business model. Without VC fuel, that car won't be without the fuel of venture money.
Speaker: ah So that also might have shaped your decision-making. Just take me through that journey a bit first, that two years in which you were trying to build Rover. And this was just one year out of your IIT that you started this, right?
Speaker: yeah Yeah, so I i founded Roder along with my friends from KGB from IT Kharagpur in 2014. Right, you know, one year after the college. um And that was born out of a personal frustration only because from Kharagpur to Kolkata, either it meant paying double fare for taxi, ah to in for even if you're going one way, or going by local trains at you know but in the general compartment.
Speaker: Since as college kids we used to have you know always short on money, we used to choose the latter. But we also used always used to feel that, you know, why is that? When car is going to Kharagpur, you can come back to Kolkata. We saw the similar problems in Delhi, Mumbai, Bangalore, everywhere. um You know, the cab. It was a general norm.
Speaker: It was the market standard. You give two-way rates. That was how the market was developed back then. So we felt that this should not be like this. With the help of solid demand and right economies of scale, we can route the cab around. We can give it the right trip ah so that the cab driver is always in a profit and doesn't go in loss.
Speaker: So we ran it for from 14 until 2017, roughly 2 to 3 years. I think ah that was my first experience doing any business in my life. um And it was a pure learning experience for for all of us. ah We got really good good you know consumer response back then because this was a problem for many, many people out there.
Speaker: And ah we we used to most frequent routes for us used to be Delhi Chandigarh, Delhi Agra, Mumbai Pone used to be very frequent route. We used to provide, you know, one way rates for journeys, AC, AC cars used to be very affordable. we We used to have use cases where people used to take cab from Pone to Mumbai in the morning.
Speaker: And then used they used to pre-book that in the evening I will return. But I don't want to hold the cab. My plans may change. So they used to book again on the go from our app. And used to assign them a trip in, you know, after say, ten taking 10-15 minutes.
Speaker: That went really well. ah But there was a problem that, you know... How did you fund this? Well, look, customer acquisition, delay you would have needed money, right? How did you... Yeah, so but but we were ah we were a funded startup back then. We had raised funding from a few early stage investors. um And I think most of the consumer acquisitions was being funded through them. How much have you raised?
Speaker: We had raised in total, I think around 2 crores. Okay. For that venture. Yeah. Back then in 15-16. And ah we had bootstrapped our way through the first year of the business. They had put in all of our personal savings and tried to build you know some traction before investors build interest and they funded us.
Speaker: At that time, there was taxi aggregator. There was. I think at that point of time, there was an immense entry by Uber. um I think in India, Ola and Taxi for Sure had consolidated. There were various other players who had come up. And there was mega funding going on around for ah local city taxis.
Speaker: ah So that that was the time and then during then we were trying to build for outstation taxis which you know I believe is still ah you know and deserve there is so much more that that can be done in that area. But yes but to acquiring consumers in that kind of competitive arena where your compet competitor is heavily funded another competitor is a MNC became really tough for us. Because they also started their intercity, like Ola, Uber. Of course, yeah. They also started ah providing intercity services, so bad as you've mentioned.
Speaker: And you know anyways, the consumer V-Cut acquire was, ah you know they have a much wider reach ah compared to us at that point of time. I mean, people use Uber on a daily or multiple times in a week, multiple times in a month basis. So, intercity is much easier. Whereas you would have to acquire some guy who will transact infrequently. So, your CAC to LTV ratio would have been not very appealing.
Speaker: Yeah. So, for example, our our average AOV, I don't remember is exactly, but you know would would have been around Rs. 2000 because these are intercity caps. In this maybe we would be making around say take rate of 300 rupees.
Speaker: Out of this we would have been spending healthy say 100, 150 rupees in acquiring that consumer because it's again a low frequency use case. There are not too many people who are travelling out station by cabs. There are in the context of Indian landscape but you know in the context of acquiring a consumer user, acquiring that person is expensive. So 100, 150 is a really expensive proposition. And then comes our salaries, you know driver incentives, server costs, etc. So that proved to be the economics, unit economics at a very core level were stressed out. And that was my learning from my first venture is that from the get go, from the first product itself, ah the product has to be profitable. And, you know, you have to, ah you know, find ways by which ah you're not really dependent on external capital always.
Speaker: So, and that mentioned, we were dependent on external capital. I think most of the capital aggregators still are, ah but we were totally dependent. So when multiple things coincided so one was heavy competition all of the competition players getting super funded and another was um you know ah material activities like demonetization happening third was you know we were also trying to raise our funds at that kind of time multiple things when they when they coincided, it was a time that really ah became really tough for us to raise the subsequent rounds. And eventually with the board and the investors, we decided that it's best that for a venture, which is existing in this kind of competitive space, it's best to you know consolidate it and shut it rather than continue with it.
Speaker: So you wound it up or did you find an acquirer? ah So, no, we we we couldn't find an acquirer for that business. We had to find it down. Okay, okay, okay. so How painful is it to wind down a failed startup?
Speaker: It's very painful. I think it's, um you know, ah after my experience, I can surely say that shutting down the company is much more harder than starting a business.
Speaker: So it's all this stuff because, you know, ma as you're running a company, raise funds from investors, you have built a team who have, ah you know, who are relying on you for their career and for their income for their families, you have stakeholders, you have vendors, you have yourself. So ultimately, it's ah it's a letdown for everyone.
Speaker: ah But I think it's it's also important to ah you know find ways to you know keep the keep the business alive but I think did that being said ah failures are there I think it's not only um in my case there have been many failures but I think what it develops is you know the one must keep on taking risks in life um but you know it's very important to learn from those risks and not repeat the same mistake twice.
Speaker: Yeah, I have personally found that these big failures improve your risk appetite. Because you have seen the worst. I mean, you know, who has never thought that I Yeah. yeah Okay, interesting. um So, because of this, then you wanted to do aggro because you felt unit economics will be better. Yeah. No, so agriculture was was a field which was very you know very close to me on a fundamental level.
Speaker: ah you know but ah You know, my ancestors, you know from my family side, we come from an agriculture family. um In Uttarakhand, my you know my um you know grandfathers, great grandfathers have been farmers only in villages and over period of time, ah generations, one generation before me migrated down because of ah loss of opportunities, loss of agriculture income.
Speaker: ah you know, random monsoons, random better weather patterns, not getting enough dues for their, um you know, for their produce. So all the problems that all of the farming communities have faced in the country. So agriculture was very core to me.
Speaker: But second, what was also important to us as a team was to ah find a ah area where we are not, ah you know, we don't have to create demand.
Speaker: So that was very, very close to us because in the, ah you know, in the in my first startup, we always had to acquire users who were looking to go outstation. and There was always an element of convincing them with the right, um you can say, content, videos, or brand marketing to, you know, why don't you think about going to a city like Shimla Pono? which will always increase your cap but if if we are in agriculture definitely there are many problems out there but I think what excites any businessman who is entering agriculture is they know that there is large demand for a consumption country like India so you can do so much and um ah and if done right then a large business can be created
Speaker: So it's more about fixing supply rather than ah creating demand in agriculture, which is, i think you could say in a way Amul exists because it fixed supply. Yeah. So I think Amul and many other companies like Amul exist because of two things. So one is definitely supply. Yeah.
Speaker: But second, they also had to ah cater to the demand and that demand was asking for better and quality products, better and consistent products every time. right so So once you find the right supply, once you fix the supply chain, you have to deliver on that promise to consumers. So that that becomes really important. Ability to deliver it is what I mean. so in Agro, ability to deliver is what matters at the end of the day. Consistency is very important because ultimately your end consumer is going to consume your product. They are going to feed this product themselves.
Speaker: They're going to feed food products and agri products to their children. So you have to be consistent. You cannot go wrong ever. And ah you have to provide really great quality to to consumers. So, um you know, when when we decided that, okay, okay, eggs look really interesting.
Speaker: And this is an area where there is no national brand. There's a big white space steering us in our pieces. We decided that, you know let's not jump the gun and launch a brand. And start aggregating from the market or branding. on start query We decided that let's do farming ourselves.
Speaker: Because as a team, we knew us very well. Because we knew that we knew andda about andes. We didn't know anything about andes. But our interest level was, we were very excited about this space because we saw an opportunity and we we we were excited that that you know we can really build a you know good startup over here, large startup and we can solve a problem for farmers, for consumers, we can really solve a problem.
Speaker: So, you know, ah one thing led to another um and we we ended up deciding that let's shift to ah relocate to Bihar. ah So my co-founder, ah they yeah they they had local ecosystem and environment.
Speaker: um These were your batchmates from IIT? Yes, the batchmates from IIT. Okay. So but we decided, okay, let's go to Bihar Sharif and let's relocate there. ah Convenient for me because from my previous startup, you know, I was almost broke. So anyways, Bihar has a lower cost of living. So, you know, I i i shifted. We all be relocated in middle of 2017. And from there we started. Assuming you were a bachelor at that time.
Speaker: I was a bachelor, yes. I i think I was also 17 was, I would have been roughly 25. So, okay um you know, I think one thing was clear to me that I did not have any, you can say liabilities or any familial commitments back then. So I think that was the question that I had, at least, you know, that gave me the risk appetite to shift to Bihar, start another business after failing at one.
Speaker: And I am fortunate about it. ah But yes, I think that's also true for my co-founders also, because many of them did have ah various commitments and family requirements, but they they took that risk to who jump in.
Speaker: So what did you learn in that one or two years of farming? How many years did you do farming for? weak We did farming from 18 until 2020. Okay, two years of farming. So what did you learn in those three years of farming?
Speaker: We learned everything. We learned. So we constructed our own farm. We took a land on lease. And have ground up the farm itself. Of course, with constructors and contractors. But the entire layout, how the farm should be designed. Of course, we were relying on the industry practices and industry standards.
Speaker: ah But you know why this thing should go here, why this, why that, how we can improve the design. um None of us were in active engineering jobs at Newson's college. So it was a good experience on exploring it. But see one thing ah which really came out because it was also part of our problem statement. Egg is a shelled product.
Speaker: I will keep 5 eggs different farms and new, this is old, this is good. Because from the outside shell, right? So if you're building a brand for India and you know aspiring to be you know but selling in 50 cities, 100 cities in in the country, how do we provide standardization? If I have to procure eggs, if I were to procure eggs from market, aggregate them and pack them under my brand name and sell them, how can I assure quality?
Speaker: So that was the problem statement that forced us into farming. That we don't learn farming until we do that, how do do a standardize and produce? kesyurruga then how can we even think of, ah you know, building a brand?
Speaker: How can we build that? We don't have the right to say in the sector, in front of consumers or in front of the the industry until we do it ourselves. So that was the key. So construction, breed deployment, breed, um you know um you know, growing up the flock of breed, designing the feed, feed formulation, feed science, but producing it, selling them in loos.
Speaker: We went through the entire cycle. um And when we came out of it in 2020, we had fair level of knowledge. I'm sure there are much more experienced farmers in the market, but that gave us a fair bit of knowledge to understand that what really influences the quality of an head.
Speaker: and how we can standardize it at scale. And now how we can build an asset light model. Because of course, if we have to build a scalable model, doing poultry farming every time is not going to be scalable. It it means you know construction every time and lot of brick and mortar. But if we have to build an asset light model, what will help us? So that that that gave us the model and the confidence to do so.
Speaker: To control quality of output, you have to control quality of input, especially in Agri. Because you cannot necessarily measure output or gauge or easily segregate that this is quality A, quality B, whatever. It's a lot more robust ways to control the input, like how the feed is done or how how the chickens are raised or what is the space per chicken that is given to them or things like that, basically.
Speaker: So um you cannot gauge the output by looking at the outer, you know, looking the egg from the outside, right? What you consume is the inside of the egg and how you control the inside of the egg is through, you know, how you do farming, what kind of feed you are using, how you are handling your birds, what kind of environment is provided to the birds.
Speaker: What kind of care is provided to the birds? Then what is your supply chain? How quick is your supply chain? How is your handling ah in which your, you you say damages are minimized, cracks are minimized. See, this is a product, even if you drop it from half an inch, it will break. It's it's very fragile. And its shelf life is typically 21 days, which we print on our packaging. So, you know, just three weeks of shelf is also very less.
Speaker: So you cannot go wrong and once you produce it because your inventory would have been produced and now you're sitting on some of the uptiles. So um you know so so that that becomes really important. if If you're selling some products to consumers and they're going to open a pack of 30 or pack of 10, they have to be assured that once I break this egg open, this egg-o's egg open, I'm going to expect a standardized quality and you know predictable quality.
Speaker: So 2020, when you decided to go beyond that one farm, ah did you have enough money to expand or had you decided to raise money? or like what What was the state status like at that time?
Speaker: How much were you making? I'm assuming it was very little revenue-wise. I think ah back in... early 2018, we were fortunate to raise an angel round of, I think i remember 80 lakhs and from angel investors and you know they were they were really angels for us because they funded us when we were just an idea. And our idea was that we want to build the first nation national level brand of eggs and we will start with a poultry farm in Bihar.
Speaker: And they funded us. So I think that that really provided us the, you can say, fuel to of setup the first farm. We put the entire proceeds, the entire 80 lakhs into the first poultry farm, 12,000 poultry farm. And we started from there.
Speaker: Over a period of time, we expanded our poultry capacity by acquiring another farm in MP in early 2018. We acquired the operations of that farm. By 2019, we were experimenting with asset light poultry integration models.
Speaker: We were working with farmers in the market where we were giving them our poultry feed, produce at our poultry sheds, at our feed plants. And we were buying their eggs and selling them in those. We were just seeing how this works. And can we improve the productivity?
Speaker: Can we give them better rates if the productivity is better? So on and so forth. So various other things we were experimenting. I think by 2020, we were managing more than close to five farms across North India.
Speaker: um With a total bird under management of a lakh birds, not lakh birds. Okay. And ah what kind of revenue from these one lakh birds? Monthly revenue?
Speaker: I think in FY19, we did first revenue of close to 1.5 crores. In FY20, we have the closed rough revenues of close to 3 crores.
Speaker: Okay. Yeah, if I remember correctly. Hmm, hmm, then how did that two farms become pan-India brand of eggs?
Speaker: So now, ah you know, fast forward five, six years down the line. um but Today we are operating, we are not operating, we work with 20 farmers who are operating their own farms, who are who have partnered with us to adopt our norms, farming norms and feed norms at their farms. And we procure their eggs on a commitment basis, on a guaranteed basis and sell them a process them um in our egg processing centers, EPCs, and ship them to the market within one to two days of life, depending on the area we're in.
Speaker: um And I think right around when COVID hit us in 2020, that was the time of chaos and crisis where as a, you see, we were young brand, right? We had raised...
Speaker: one round of funding twenty and in 2018. In 2019, we did another friends and family round from, you know, few few angel investors, few seniors from our college and few other angel investors and micro funds we knew.
Speaker: And we were running with those capital, but we were, you know, again, always run, always short on runway, always trying to figure out where our next round will come by. So that was the time when you know lockdown and all of that chaos that came along with it that really hurt us bad. And I remember there was rumor back then which had spread. You know this was April or May 2020 that if you eat chicken and chicken, you will be to be Corona.
Speaker: This was a rumor which was spreading everywhere. I remember that this rumor caused the egg prices to crash to zero rupees. You know, but we were not even getting 50 pesos for our eggs.
Speaker: And if you were, you know, but the birds which are, you know, which are with you, they will continue to consume feed, right? It's a, it's a factory that never stops. So we were in a very peculiar scenario that we are we are in you we are you know developing ah inventory or raw and they are producing eggs are perishable also. Within three to five days, they will lose their freshness.
Speaker: market in the market. So they it was a very you know very tough scenario ah for us. And that gave us the realization that as a as a seller who is selling in white level in commodity rates, we have no control over our selling price.
Speaker: If you're 4 rupees, 5 rupees will be 5 rupees, 6 rupees will be 2 rupees. So this business can't be done. And I think we we were always, when we started the business, that was the that was a goal, right? To build Eggos into a national brand. So I think that was just the situation was just a catalyst to us. Let's let's build it and let's let's build the brand. Let's pivot to a branded business.
Speaker: So we shifted everything. We shut down our farms. We shifted most of our business to towards Gurubau, towards North India, and towards you know consumption centers. And we partnered with some very, you can say, forward-looking farmers over here who were ready to make some changes in their in their feed practices and farm practices.
Speaker: So we started from Gurgaon. Over a period of time, have expanded to almost all of the important cities now. How did you move from selling a loose under, undifferentiated, to a branded under?
Speaker: So I remember... In Bihar in MP when we used to produce our eggs, right? We used to produce with herbal feed. You know, we have any other feed ingredients or say chemical concentrates, etc. We used to use. That was a rule we had.
Speaker: And I remember that we used to sell it in Luz. So Luz, there was a lot of food. So many cutthi roll local omelette shop in Bihar Sharif or Patna, they also used to eat eggs. And we used to remember the consumer experience at their counters used to be really nice. Because when you make something from fresh and day, you make a boiled egg, make a fresh and day, the taste, smell, everything, the entire experience is really, really good.
Speaker: So um a aek um ah be we that we were trying to improve our cash flows and margins and we just tried to increase rates in the market. we would give you more than 20 pesos in the market. me So this Kathi Roll was definitely procuring at a certain rate and said no, we will not give it. Okay, we are not able to give it. Someone else is trying to give it and let me try over there.
Speaker: ah but I think over a period of time of few days only, we came to know that you know consumption at his counter has dropped down. And he came back. He said that consumers have a lot of money. And these are, you know, this taste is really new for this market. So, you know, please continue. in So we started to supply to him.
Speaker: So that taught us that there is a lot of things that we like to consumers. And so then we started to do more consumer immersions, more consumer research, what people are liking about our products.
Speaker: that it doesn't smell, the omelette little fluffier, it's tasty, it's sweet. So, this type stuff doesn't come to mind. And that gave us the confidence that if we have to now take this product and go and sell in areas like Delhi, Bangalore, Mumbai, all of these areas, then we can sell it. It is a it very but positive development. so so So, we did that. That gave us the confidence.
Speaker: but for ah brandon ka seowsky from just a a regular lose egg into a branded product branding i think ah when we started the company in twenty seventeen we had named it ah Eggos only. We had named the product Eggos. We brand it. In 2020, we just ah started to package it. We we bought a food-inggrade um ah egg stamp.
Speaker: We imported it. ah We started to stamp which in every egg buyer is. So me and my co-founder used to sit on a table every night. like uningga bat chat um course toravaafka fishishtimeullava And would pack the I used to remember we used to use his car.
Speaker: And we used to do this. We did this for 2-3 months. So we started branding money. Then we started to start in Goodgaon. Why Goodgaon? Because you know, we We had spent a lot of time in Gurgaon in our previous ventures. So ah we knew Gurgaon on a good manner. So we started to keep these eggs in stores.
Speaker: We used to start to do do some activation events, promotional events. We tried to try it and see it.
Speaker: It's orange, herbal feed, has fresh, you smell it. Some people tried it once, once again, once again, and then they started to repeat our products. And that gave us the confidence that we can go to more stores, more supermarket chains, and slowly the distribution grew.
Speaker: So, you know, ah most new age consumer products want to go through the direct-to-consumer route. So direct-to-consumer means that you don't go to the general trade, but you either will go to e-commerce or quick commerce or maybe modern trade. ah Why did you decide to go to general trade first?
Speaker: And general trade, just for my listeners, i want to clarify, like these Kirana stores and local supermarkets, which are unbranded. These are there's known as general trade in the consumer goods industry. So why did you decide to go through general trade?
Speaker: c ourra you know we We are building for long term. So we are building a national FNCG brand. And I think for that, general trade is very important.
Speaker: Because it eggs as a product has always been sold in general trade environment, in Kirana environment. It's a product you morning walk, pick up, pick up. it's a very you know very common product.
Speaker: So the buying behavior was not really there of e-commerce, there was chance of e-commerce, right? Nobody orders eggs from Amazon. Yeah, so Amazon, no quick commerce was, Amazon didn't sell eggs at that time, Flipkart didn't sell. And I think back then, used to be Big Basket, Growfers, Milk Basket, and I think few more. So we went with all of them. We went with, you know, okay, that wherever the consumer is thinking about eggs, we have to place our products over there. We have to find a distribution. So if a consumer wants to buy from a local store from a DLF-Face4-Gurgaon, our product should be placed there. If someone is searching online, we should also be placed there.
Speaker: So everywhere where the consumers think we have to be present. And I remember but ah but today that count has grown. So today now we are in more than 5,000 stores in Delhi and Siyar. So within all of these stores have come to us, you know, one store at a time, brick by brick. And most of them have stayed with us also.
Speaker: So what's your strategy for growing in general trade? Like, do you have a sales force which goes out and onboards retailers? yeah well look What works in general trade? like but I think in in general trade, see, general trade...
Speaker: ah while the end consumer will purchase from the retailer, right, ah for us, the customer who will pay us is the Kiranawala.
Speaker: So as a brand, we have to enable him to sell more. You know, thereby he will sell more, he will make his margin and we will also sell more products.
Speaker: so ah but So sell more and make more money. Because at the end of the day, a general trade kirananawala has very limited space in his store. So if wants to keep his ego's, there are 20 more companies who want to place their products in the same shop.
Speaker: So you have to find the, you can say, commercial arrangement with him, which is lucrative enough for him. Second, you will have to support him, that your money will raise. have kept your money, it's not being raised, it's a problem for him.
Speaker: So if you're placing a store, placing a products in store in a certain area, you it is your duty as a brand to do all the marketing possible in that area and you know overall, so that you know that there is demand, there is demand pull from that store.
Speaker: um support carna gave you know You have to support him. And lastly, if... See, we are in egg space, right? So ah it's not like that I will go to his store, um you know, stock his Almira and shelves for a month and visit after one month. I don't even have a stocking business. We are a very GIT business. Just in time inventory. You should have to be finished every three days.
Speaker: Otherwise, it is not it is not as fresh. So on-time delivery... fill rates, ah you know, the service that we have to provide to the store has to be very, very proper. You know, our delivery timings, delivery ah breakages, all of the quality parameters, which is our duty, they have to be very proper to towards the store so that he's not facing problems in front of his consumers. And when once a consumer comes and says that if you give a packet, then you should have to pay for it. Otherwise, it is his sales loss. It is his margin loss.
Speaker: How do you ah enable sales to grow for a retailer? Like, do you do you like do activation on the store or what all do you do so that his sales grows?
Speaker: See, ah yeah, so but but one of them is activation at the store. second ah Second of them is finding, um you know, areas of, you can say, areas of influence where our consumers are roaming, right? So one is if you can do more activation societies, RWAs.
Speaker: you marketing in the because a gym goer will consume it even if they are not looking to build a build body they are not doing body building even if they are going for general fitness will be prepared because they understand the value of protein um so this we do you know everywhere um we do market areas community areas and moon most of the areas we are not going and saying that you should try to do it We are telling the you know the general consumers out there that why protein is important for you and why you should consume more and more protein. And sir, by the way, this is the most natural source of protein.
Speaker: Eggs are the most natural source of protein. It is the gold standard of protein. And you know our eggs are you know come through so-and-so supply chain, they are herbal feed, fresh, etc. And you can try our products once.
Speaker: or buy from this shop. So there is ways of saying the same message. But core of the thing is that, you know, we we strongly believe, strongly believe that India is a protein deficient country and eggs are the goal standard of protein.
Speaker: Why is it called goal standard of protein? Because you eat one egg and if you want get 6g from it, once you consume it, your body will absorb almost all of the protein.
Speaker: Unlike other sources, just my absorption isn't so much better. neoha It's not gold standard. Eggs are gold standard. So, you know, it's very important and it's affordable. ah It's worth 10 rupees, 12 rupees an egg, at least for us. Local eggs are maybe 8 rupees, 7 rupees. It's not expensive. You have to pay 2-4 years.
Speaker: And it will it will change your life. It will improve your body significantly and your lifespan significantly. So that's really important to appeal to consumers. What's your ARR now?
Speaker: We are doing more than 250 crores right now. Okay, amazing. yeah And how much is general trade from this? General trade is ah is a minority right now because general trade for us is only limited to North India in Delhi and Sierra.
Speaker: Whereas with the help of you know quick commerce, we have expanded to 2025 cities. So almost all of the new revenue from new cities is 100% quick commerce for us.
Speaker: Whereas in mature markets like Delhi and CR and Bangalore, we recently started. vm we started you know We are doing generated only in these areas.
Speaker: And how much is the revenue from quick commerce? I think quick commerce you know is is the majority of the revenue. Like 80-90%? Yeah, it's it's more than 80% our revenue comes from quick commerce. Okay, interesting. So basically quick commerce changed the game for you.
Speaker: Yeah, of course, I think ah eggs products are also such that we have learned from our consumer research is that eggs and bread typically last minute purchases that it's morning and it's coming to remember that there's no eggs in house. So either you call your to call them to give them eggs or you do a quick commerce. These are two general user behaviors we have seen very frequently. So that will fit really well with our user proposition.
Speaker: ah Tell me about how to succeed in quick commerce. Because, i mean you've built 80% of your business on the back of quick commerce. So what have you learned?
Speaker: What works in quick commerce? I think, see, um it works like on a very fundamental level. Quick commerce will work like any other modern trade or any sales of points, it is a point of sale.
Speaker: So for a point of sale to be successful, you have to be visible in front of the consumer. So if you're a new brand, you will have to invest in you know getting yourself up. So you know say promotional ads, ah the right search ads, figuring out the right consumer intent. that the consumer comes to search bread, eggs, or ego. You'll have to figure it out that the consumer is with what intent and where we put our product in front of you. And second, your availability has to be there.
Speaker: Because in quick commerce, it is very easy for any brand to come in and list their product today. Even if you open quick commerce today, you will find 40, 50, 60 options for eggs. And, you know, it's also difficult for the consumer to choose from these many options.
Speaker: So you have to be available. Your your stock out scenario should be leased. um um But third, more importantly, like any other point of sale, Given any scenario, if you are working with a quick commerce, see they also have concern at their end. They are working with a vast network of dark stores.
Speaker: Then they also have vast network of warehouses and distribution centers. If sales velocity not enough, nainge it will be a problem for their supply chain cost because their cost will go up their inventory costs will go up. Just like Kiran Awala, if sales velocity enough, it will the sales space for someone else. 20 companies are still there.
Speaker: So you have to ensure, again, up offline marketing carro or online marketing, you have to ensure that the is what going on. So that becomes really important. So for any brand who's looking to, you know, be successful on quick commerce, it's really important to maintain availability. That is just the basics of it. But second, do everything possible to get sales, to just get sales in the in the beginning.
Speaker: Just get that sales velocity. Okay. ah ah Are you at liberty to comment on the different players? Like, what is the experience of selling through Blinket versus Zepto versus Instamart?
Speaker: Like, you know, are there nuances between these three players or differences in how they approach or how a vendor should approach them? So but in in my experience I've seen that you know we v like working with all the 4-5 players, quick commerce players now. So there's Blinkit, Swiggy Instamart, Zepto, Flipkart Minutes, Amazon Now. There may be more coming up as well as as we speak. so I think our experience with the players who are already launched has been really good.
Speaker: um All of them are really serious about ah their promise to consumers. So their promise to consumers is that you get products in 15 minutes And you will get a lot of assortments. That is their promise. That you will find all the assortments possible at very short span of time.
Speaker: So all of them are really serious. They have invested significantly in it. And I think they are they have been investing in a growth of brands who are ready to support them. Right from all of the players which I have named so far.
Speaker: So, ah you know, I think ah ah my experience with all of them has been really great because we continue to grow with all of them. Every year we are growing with all of them at the pace at which they are growing as as a platform, as platforms.
Speaker: Okay. um What is your ah marketing strategy? Like you said, the most important thing, irrespective of channel, is to make sure that customer demand your product. So, for that, you know, how much do you spend, where do you spend, what time is the spend more effective? with Whatever you've learned on that front, can you share that?
Speaker: So see, I think, ah you know, the exact numbers, know, marketing to revenue percentage or exact absolute numbers, they will keep on varying depending on the year we are having or depending on, you know, the the kind of opportunity we are seeing. so it will vary. But I think at the core of it, um you know, but and it it goes back so to fundamentals at at a fundamental level when I think at a very fundamental level, marketing at a worse is all about inducing trials.
Speaker: Because ultimately, we are selling food. It's a food product. so If we have to build trust with a consumer, we have to try them once. So they have to try it.
Speaker: And they are trying it, the product will be best. We have to be the best in the market. we have to be the best in the market So if they are trying it, they will try once. If they like it, they will give it another chance. They will try it try it twice. Both of these times the product has to be great If it is great, we know that from third and fourth time, they will come back on their own. So my you know retention, all of the metrics will will be sorted out.
Speaker: So now I'm doing offline activation. I've seen your end, please take a sample. Or if you saw your end, you have a coupon code for commerce. And you try it out. If it is like that. Or if it is, say, any brand campaign we are doing or digital ad we are making, everything is focused on inducing a trial. You just try our products once. It could be due to the reasons I'm explaining, be double feed or safety checks, etc. But more importantly, it is that once the consumer tries our product, they understand the difference between ego's egg versus a loser. So once a consumer starts to understand it, they know that there's a better product.
Speaker: And ah if you could still share some numbers, like currently, how much is your monthly spend on marketing? And how much of that goes into quick commerce marketing? How much goes into, say, TV ads or ah like you know more generic kind of advertising? I can share that you know our marketing numbers would be in late single digits to revenue, late single digit percentage to revenue.
Speaker: um Again, it will vary. So in a few months which are lean, we will do less because for say example, in the market, if there is if there are festivals going on, like say Navratra, So Navratra, you know generally people don't eat. it So that's very normal. So it is very also important for us to just maintain a certain pace of the push we are doing.
Speaker: Then, you know, when we will see winter season, which is the peak season for us in our business, we know that people people are consuming more eggs than they usually have. So, you know, we will be more aggressive.
Speaker: ah You know, our percentage, marketing percentage to revenue, maybe even in the teens. So it all depends on the on the season and the quarter. And how much of that spend is on quick commerce advertising, like advertising within the apps of Blinket, Zepto, etc.?
Speaker: um I may not recall the exact number right now, but you know almost all of the quick commerce we are operating, ah we are profitable at each and every quick commerce level after investing on the platform.
Speaker: So it also, you know, is also a testament to the unit economics that not only we are able to sell more and more products and continue our growth pace with them, but, you know, all the platforms are also able to give us the economics of scale that we make ah positive margins on the bottom line.
Speaker: Hmm. Hmm. Hmm. I guess what I'm trying to find out quick commerce ad spend is like performance marketing. It's almost like direct correlation with sales. Yeah.
Speaker: Is most of your advertising spent like that? Or do you also do more brand awareness kind of campaigns where the direct correlation with sales is not so obvious? And like, you know, is it wise to do that at this stage? Or should you look at doing that when you're at a higher stage? Or, you know, so that's that's what I want to understand.
Speaker: So I think when we started out in our early days with quick commerce, it was mostly performance marketing, mostly platform spins because at that point of time we were, you know, their user base was growing at a fast pace and we wanted to adapt as much of that user base as possible.
Speaker: Now fast forward, five days down the line, six days down the line. Now, you know, we have the most market share on most of the platforms right now. and So you are the leading egg brand across most quick commerce platforms.
Speaker: but Most of the most of these cities, older cities, we we are the leading brand of X. Definitely newer cities, you know we we are the new entrant. So you know we are finding a way. ah But but ah now ah with experience, with you know presence on quick commerce, we are also now very serious about general trade and we are investing behind general trade. Now our marketing spends, marketing focus is shifting towards the brand side of things. that what more we can do outside platform, on social media, on um what kind of advertising do we run, should we do outdoors, should we do you know IPL ads, should we do cricket ads, so all of these you can say avenues are are where we are exploring more now because you know ah we we understand that that as far as the platform goes, consumers are fairly aware about egos.
Speaker: And we are in their consideration set. or we would be already you know They would have tried our products you know one time or ah or or so. But we have you know if we have to expand the pie, if we have to recruit more users towards our brand, if we have to increase awareness of our brand among users who are not limited to quick commerce, then we have to invest outside the platform. So that we're doing.
Speaker: And especially for general trade, you will need to have that kind of advertising. It it also helps recruiting users for quick commerce also. Because they are, you know, sometimes, you know, if I'm a user, I've seen an ad of a quick commerce or something other, maybe I will not pay attention to it.
Speaker: But if I'm a user, I see an ad about an egg brand, an egg company who is saying certain things, with which I relate to, then I may install that QuickCommerce and just to try out that product.
Speaker: So it works the various ways and I think it always helps. um The QuickCommerce platforms, it's a partnership, right? So they are growing our business. They are increasing reach for our business. At the same time, we are also investing outside the platform to increase the size of their category, the category penetration of its brand X in their overall user base.
Speaker: Okay. What does the margin look like in quick commerce versus general trade? Like, you know, you said about 12 rupees is what an an egg is sold for roughly.
Speaker: What's your margin in that? See, ah exact margin details I will not be able to share too much in public because, you know, it it may vary region to region.
Speaker: And depending on our um you know business focus right now. But I think ah all in all, you should see it from a cost of sales point of view. So one is the standard margin, commission margin.
Speaker: Another is you would have to spend some something on the performance marketing. But third, in case of offline, you have to invest in your sales force, right? That sales force is absent for online business because you know you don't need a sales force to manage accounts. You need maybe one or two members to...
Speaker: to do coordination and you know work with the accounts in a proper cordial manner, in a coordinated manner. So eventually when you look at cost of sales, you can compare that, okay, if today my general trade has higher cost of sales because I'm investing in sales force, I'm building the distribution, then okay, this is the investment we are okay with.
Speaker: But if quick commerce on a certain, so after a certain period of time in a certain city, the cost of sales is not going down, then you have to think that what wrong am I doing? Is my brand not, ah um you know, but is the awareness of my brand not good enough? Should I invest more out ah outside the platform so that in I can increase the, you can say branded searches and the brand pull so that my cost of sale goes down?
Speaker: So on and so forth. But, you know, eventually it comes down to cost of sales. But the general trade cost of sales ah is like, ah you know, it doesn't have a direct relationship with the revenue, right? I mean, you can go from ah selling 100 crore to 200 crore in general trade without having to double your cost of sales. Because ah once you onboard a new retailer, you wouldn't necessarily need to spend as much. It's just that one-time onboarding, which is more expensive, I'm guessing.
Speaker: Of course, but definitely economies of scales certainly help. However, when you're building GT, you have to think of multiple factors. So one is your sales manpower, trade margins, distribution margins, so on and so forth. But another, there is also cost of business, the cost of um you know credit, the cost of cash collection, which is there in general trade business. ah you know When you are a young brand,
Speaker: ah People will not pay you in advance. right So it's you know in anywhere you go. So if during our early days, when we used to go and onboard a general trade counter, they used to say that you keep the and leave the money. The cost of replacement is also there. camp abcommal biwaanabi but ah Because obviously as a young, ah for a young brand, a retailer is not going to take risk with his capital.
Speaker: So, but once your brand starts to grow and a retailer or a group of retailers, they understand that, kr bullhe noo product rana padega the otherwise the the consumer will find that the product is not available over here and they may just open a commerce app and order from there at the point of sight.
Speaker: So then a lot of the commercials can start to ease out and become more growth focused and more you incentive focused for the trade. okay okay Okay, interesting.
Speaker: ah What is your gross margin overall, like if you're at liberty to share? I'm not at a labor to say, but you know we are in we are in a perishable and fragile business. We are not ah we work on thin gross margin and margin profile. But our business you know in our business, even if we have slightly less gross margin compared to other, you can say similar states, D2C startups, but the rest of the cost is fairly lean because our logistic cost, manpower cost, processing cost is very, very lean.
Speaker: And our marketing cost is also fairly lean compared to you know what you see in the market. So there, you know everything flows down fast. We are in a business where there's no limit to the scale we can get in the coming years because the market is really large. And even if there are few regional level competition, it doesn't matter too much because the industry is not even 5% of the overall egg industry. you know Branded egg sector is very small. Packaged egg sector is less than 5% of the overall egg sector.
Speaker: And overall, sector is today 1 lakh crore on an annual basis. so And that is growing at 6% year on year. So just imagine in the next 10 years, this 1 lakh crore is going to be roughly 2 lakh crores. It's going to double.
Speaker: So there's no limit. So if ah today we are going to say 200 to 250 crores, it's entirely possible that we can do you know very high ah scale of revenues in the years to come.
Speaker: But at at the same time, we are we are dealing in a daily product. So I don't have to go and acquire a user and spend on CAC every time. So once a user is convinced that okay, Ego's is the choice for my family, then retention rates are very high.
Speaker: So that brings my entire P&L in a very comfortable state. Are you currently EBITDA positive? So currently we are investing heavily in brand and, you know, we've just opened GT, we have opened ah many more markets in the last two quarters. So right now we are not EBITDA positive because most of the investments are going into marketing and newer cities. They are spending our footprints. However, you know, ah ba back in the day, around a year or so back, we were EBITDA positive and running a company then. But then, you know, we we were fortunate enough to raise our CBC. So we got the growth capital. And now we are investing behind it so that we can go to the next stage, build the next set of revenue. revenue And then ah we can always revert back to being a positive company.
Speaker: I think you raised the $20 million CBC. Yes. Okay. Okay. ah How much have you raised? a Lifetime till date? I think lifetime we would have raised...
Speaker: Close to 270 to 300 crores. Okay. About 30 or 30 or 30, 35 million. 30, 35 million. Okay. Okay. So, you know, this last round of $20 million, any learnings from it? Like, you know, what made this round happen?
Speaker: i think, ah no, I think, um you know, every round we raise it it's added responsibility towards our existing investors and also to to new investors, right? So but every round while there are various learning experiences as you go through that entire process, but it's also, ah you know, you can say a responsibility add on that now you you, know, whatever you have done so far has been great and which is why the new capital is coming in. But now on the next stage you need to do better, you need to do much more so that you know the company can really achieve the kind of expectations and the aspirations that your incoming investor has. So um my learning so far has been, um you know I think what changes compared to when you raise say two hundred k two million ground versus a million round round.
Speaker: What changes is how you start to manage your business. So when you are say a very small business, you raise your first pre-series A or C round at 2 million. It's mostly 15-20 member team who are managing your, you know, who are running the show. And, you know, there can be gaps, there can be mismatches, but the risk profile of your business is very high.
Speaker: But the capital deployed is also in the early stages. But as your company matures, you have more investors, back your company, a formal board is formed, ah proper governance, corporate governance structure is set in place.
Speaker: It's very important that ah at a governance angle, you start to be start to behave. and start to enforce asset structures and and systems and processes like a larger company, like a bigger company. So that you are you know in the entire ah you know the the system and the risk profile can be can be eased out for the for the right stage. And you know because as in when every every round your valuations are going up, your um you know there's much more at stake now compared to what it was when you just started the business.
Speaker: It is also important that, you know, when we've been, today we are 200 employee team on role. Extended would be another say 100, 150 off-role members who would be associated with the company.
Speaker: So it's very important to have a very strong governance. in place, be board of directors, committees, leadership, ah how do you handle investments, how do you handle, um you know, payments, cash flow, everything has to be proper because it's someone else's, ah you know, it's an investor's capital who is fueling your growth. So you have to be very careful with that money.
Speaker: um And ah lastly, I would say that, you know, many times I've seen that whenever a um big round happens with any company, um in many cases I've seen that, you know, people may take it as a liberty to spend more and do more. While that is true, you have to, you know, go to the next stage and really step up. But as in when the company grows you as as the founders and as the leadership, you have to be extra careful with that cash.
Speaker: And, you know, you have to ah be very careful that whatever money you have, it's for a certain milestone. So achieve that milestone, but turn, revert back to profitability as soon as possible.
Speaker: So that you can, you can keep on building from a financial prudence point of view. How did you learn about a lot of these things that you're telling me? you know like You basically started as like you know one year out of IIT. How did you learn the importance of governance? and you know Or how did you learn about how to build a great team, hire the right kind of people? what What was your way of learning all this?
Speaker: See, but I think ah for me, I was, I say, um you know, I've been very fortunate and lucky to ah have the set of investors that we have at Egos. And most of my learning, and I can surely say for my for my extended team also, for my co-founders also, that it has come from our from our investors, from our because they they have experience from various other companies industries, portfolio companies and much obviously they are more senior to us in terms of experience. So we learn a ah lot from them and we always take it any feedback session also we take it as a you know learning opportunity for us to you know grow our system. So that is it.
Speaker: But second I think you know what has also helped me personally is you know going through a lot of books, podcasts which has you know which has you know for the right topics which has helped me in the right areas.
Speaker: What kind of books and podcasts can you name a few? See, I think, ah you know, for me personally, I'm a person who who wants to read fiction. But for any, you know, you can say, um you know, work related things, I have to read nonfiction. So I'm ah and that kind of person. But I think but one of my favorite books is Principles by Ray Dalio.
Speaker: It's one of the most comprehensive books you can find find out there. spanning work life various other things i think that's one of my favorite books out there um i think apart from this second i would say shoe dog which is the story about nike's founder it's one of the best books i've read on entrepreneurship and founding a startup and then taking it to a large building into a large company know that that That book really teaches you about consumer obsession because Nike as a brand has has is really consumer obsessed and they build a product and a company around consumers only.
Speaker: So that that you know that that really teaches you. Yeah, yeah, yeah. Phenomenal. I want to end with one thing which I've been wondering about. You raised 80 lakhs straight after a failed startup, which I thought was amazing. Tell me about how you managed to do that. Like, like you know, what worked for you in that round? or Because you were coming off a failure and you ah did not have any sort of ah like an MVP or any sort of traction numbers, nothing to show other than a dream.
Speaker: ah So how did that round come through? See, I think as I look back, even I think that, you know, we were really lucky and fortunate to have met the angel investors we met. And there they are really angels for us because they really gave us the, you know, the the seed capital to found Legos. And we would not have been, you know, at the stage we are in today without without all of those investors come together.
Speaker: So, yeah I think, you know, but all in all, I can just think that back in the day, I remember that right from 2018, you know, most of the connects came from our previous networks, my co-founders network. We had spoken with many, many investors, but I think through a handful of them really believed in the vision that, okay, you can really build a large egg product.
Speaker: company in India and it will be tough it will be very difficult but you know here are few guys three or four guys who have left everything and shifted to Bihar Bihar Sharif and they are doing projects at ground level or willing to do farming for a few years and really build it on a fundamental level I think at some levels that would have helped But I'm sure they would have their own perspective from there. But ah throughout my journey, um i say that I was lucky. we were lucky to build the, to raise the first round the way we did. Because all of our subsequent rounds were really tough.
Speaker: And throughout 2018, 19, 2020, 2021 in our journey to raise, say, pre-series A, the later on the institutional pre-series A, ah you know, I stopped counting the count of no's you have from the investor community and from the investors after a while, I think.
Speaker: Why was it? Was it the category? Like people thought eggs is... Yeah, but back then investors were not looking at X. No one was interested to look at X. Like they saw it as a commodity. I mean, what were the reasons? I think a few of the reasons back then from investors used to be that it's not going to be a brand.
Speaker: It's a big one. Who cares? Why are you building it this ah this in in this sector? It's a very commoditized business as as you mentioned. so very commoditized business. Margins went within. That again, those are logical reasons.
Speaker: ah But I think, you know, as entrepreneurs, it's a trap that you, afraid, the fire just grows bigger and bigger to you know prove everyone wrong. Because at a fundamental level, you believe that it will be built here. It will definitely a startup built and a business built. But you just have to, you can say ah a senior one told me that, you know, ki a fundraised anyway um even if you have nose, you have to develop very thick skin to let it not bother you. And just, you know, take it on a very mindful and objective manner, take the feedback and move on. Because all you need is one yes.
Speaker: The one yes you get will stitch you around together and um um you know your funding will be done. So I think that just kept us on. think there's a problem with this advice.
Speaker: Your last business, the taxi aggregator business, if you follow this advice, that okay, everyone is saying no, but I'm still doing I'll try until I get one yes. Even though fundamentally, whose businessmanneath her legs It could not have survived, and you did the right thing by shutting it down.
Speaker: So how do you know when to apply grit, and how do you know when to call it quits? So I think ah ah that that was the learning that I got from Rotor experience also.
Speaker: And ah which is why when we started to work in Egos and you know, of course, when you work in eight years, there are various initiatives that go into work. Be farming, be it this city, that city, this business, that business, feed business, etc.
Speaker: um We always had that filter business that if something is fundamentally not working after a while, Maybe it is a business issue, business model issue, or it is an issue with the mismatch of the team who is running it. So maybe we are not able to run it.
Speaker: So it's better to call it quits right now so that you don't waste any money over it and maybe revisit it later when the time is right. So we have followed that kind of thumb rule internally. And at least for our business in Ego's, the core business which you see today, ah which is available nationally and the way it is right now, it is it has been you know evolved over time through various failures, wins, hits and misses. It has evolved into this shape and form.
Speaker: So, you know, that that that concept we use internally very highly even today. Besides this core business of selling eggs, is are there other business lines or some other kind of business also?
Speaker: We are only into eggs. I think for foreseeable future, we will only remain into eggs because, you know, focus really forces you to think about how to do things in a better way. But we have started to do value addition of eggs.
Speaker: So we have you know started, we developed certain products, valued products in frozen ah things like pasteurized liquid eggs, egg patties, etc. Well, we have now recently started to sell it to food service industry like QSR, restaurants, Horeca, all of the clients. which is to we we We're trying to build a category and business in by valuating, by processing eggs also.
Speaker: We'll see how it grows. what what What is this frozen egg patty? So these are frozen egg patty. You know, it's it's a pre-made product. We make it at our end, very clean product.
Speaker: And we blast-freeze it at our end. So but that gives it a... Like an omelette kind of a thing Like you whisk it and then It's a patty Just like you would see a chicken patty This is an egg patty And in our product It's Almost 95% is eggs And remaining is cream Etc So just give it a texture um It's Frozen One year shelf life You can take it out Thaw it for maybe 4-5 hours Directly put it in microwave Heat it and put it inside a burger Very easy to assemble Very tasty It will taste just like an omelette Once you consume it
Speaker: Very interesting. But ah why not just stick to only selling eggs? Because there is so so much opportunity in that. Why complicate your supply chain? Because this this frozen supply chain is needless complication, right?
Speaker: um See, in our business, when we are procuring eggs from farmers in commodity business, And then we pass them through a certain safety check ah protocol.
Speaker: In the safety check protocol, ah based on certain parameters, key you know you end up the yeah andda chotahe alka waitit kamer this egg has more hairline cracks than required. This egg has yoke defects and everything is done through machines. And in few of the largest centers, we are using automated machines using AI to do these rejections.
Speaker: We see rejections as high as 25% of the eggs we are procuring. Which is very high. Now what do I do with these eggs? I cannot, you know, throw them away. These are good eggs which can be consumed. But they are not good enough to be packaged under Ego's brand name. They are maybe small or deformed, etc, etc. They are good for consumption. So we have to find ways on how we can do some value addition for this and inventory.
Speaker: Because if I don't solve it, then yeah it will increase my subpl supply chain cost. It will make my already thin margin thinner. And it will be a sustenance problem. So hence, we started to innovate in this area. Now, what can we do? What can we do? So after various trials and errors, we arrived with this product. And we are still you know innovating more products as we speak. But you know these products have really been taken well by by food service industry.
Speaker: Okay, interesting. ah How does your supply chain work? Like every egg is going through this automated quality check process? or like Like, you know, say in case of Amul, they will go pick up the milk from the farmers and then that milk gets tested and then there is a pasteurization plant and then it goes into a packet and then it is distributed to the points where it is sold.
Speaker: Tell me what it looks like for you. Unlike all the other categories which you mentioned, right? Like milk and all of these things, you can do post-harvest quality. You can take milk, fat meter and various other meters you can insert and you can check the quality of that milk. You can check adulteration also and the fat content also and various other contents.
Speaker: In eggs, as I mentioned earlier, all the eggs are in the same. So the quality control right happens right from the feed which is being given to the birds.
Speaker: The feed has to be right which will produce better eggs. eggs which will have orange yolk, better shell strength, will be fresher, will not give smell inherently because you're not using that kind of feed. And also the feed which will keep the bird bird healthier.
Speaker: Because the bird is healthier, if they're eating better feed, your eggs will be better. It's simple and biological funda. So once these eggs get produced, Then we do all of the um ah subsequent quality checks. So one is the feed control.
Speaker: The bird will lay egg on a daily basis. How do you ums ensure compliance with feed control? So in most of the farms, we are we are mandating our feed formulation. Our staff is placed at the farm site and is present at the farm site when this feed is getting produced and mixed at the feed plant.
Speaker: Second, um almost on a random basis, our veterinarian doctors team, they keep on circulating among the farms, keep on doing checks of the bird, etc. heard on a protocol basis all of the eggs which are coming out if the right feed formulation is used they will you know they will achieve a certain grade of orange grade of orange in their yoke it's very precise has to be you know a certain grade of color on a on a color scale So that has that has to be very, very proper.
Speaker: And third, on a very random a random basis from every farm, eggs will be sent to labs for testing. So we'll do a thorough testing of, you know, um chemicals, pesticides, antibiotics, etc. So that, you know, we we we are sure that everything is proper.
Speaker: It's a multi-state protocols by which we are controlling. And then your van will go and pick up the eggs from each farm and like like what next once the egg is laid?
Speaker: So once the egg is laid, um and a bird will lay egg almost on a daily basis. By evening, we will pick it up. By an night, it will reach our centers. ah In our centers, the egg will, you know, after some time, after a staging area, i will directly go into the machineries. The machinery will do its work, which is rejection, um you know, rejection of unbranded eggs, rejection of hayline cracks, yoke defects.
Speaker: And based on size and weight, it will grade the eggs into different lanes. So for Ego's premium range, which is available on quick commerce, I think we are packing eggs which are above 50 to 52 grams of weight, which are large size eggs.
Speaker: Anything below is rejected and we will have to see, find ways to i'm going to handle them in ah in another way. And then the eggs will be packed by the automated machinery and then will be ready for shipment.
Speaker: I think by evening, the eggs will also be shipped out. Within say 24 to 48 hours, depending on the season, day of the week, etc. Within maximum 48 hours, the eggs are in the market.
Speaker: Either in a retailer shop or either in a dark store of a cool commerce within 48 hours of life. the The washing, stamping, all of that now happens through the machines only. Everything will happen in the machinery.
Speaker: Fascinating. um Okay. So let me kind of end with asking you for advice ah for young entrepreneurs, people who are maybe in college right now, ah thinking of starting their own venture. What's one piece of advice you'd like to leave for them?
Speaker: I think um ah i think this this was an advice that you know i was given to me also. that the the the the journey of you know Everyone wants to be a startup founder and do entrepreneur entrepreneurship. right ah But they once you start building a business, um it's it's really tough. So it's not a straight line at all.
Speaker: It will be, you know, you there can be multiple values of death that you can see in your journey. But what is most important in this journey is that the the outcome or whatever in your mind success outcome is will not be quick. It will not be a one-year journey or two-year journey or even five-year journey.
Speaker: It is a minimum commitment of, you know, you have to take a long-term commitment of 10 years, 12 years, 15 years and commit yourself to it. So and you maybe after that maybe you know you you will find success. So that that's really important. I think second I would say that just see you know I have been an engineer so I will be you know we're all a team of engineers only.
Speaker: So even if it is a poultry problem or a branding problem we always look at it from an engineering engineering point of view. So always, you know, I think that works is that always follow the lean methodology. I think there's also a very nice book called Lean Startup, which explains it really well, which I recommend to all of the budding entrepreneurs to read before starting out. Just, you know, just start out.
Speaker: Don't overthink. Launch an MVP, start experimenting with users, start taking feedback. But cap keep your iteration cycles very, very short. Keep on iterating very, very fast. I think you will see that within, say, six months or one year, the the product you started with and the product which is that you have achieved in one year will be very different, far superior.
Speaker: So that that's really important in any journey. Even today, after the eight years of building a goals, any new market we are launching, any new businesses we are, any new product we are trying to do, we we follow this methodology is that launch quickly, launch an MVP with your best effort, but then keep your iteration cycle very, very short.
Speaker: Amazing. Amazing. Thank you so much for your Avisek. It was a real pleasure. Thank you so much, Akshay.
