May, 26, 2017
Paper Boat takes on international competition by presenting an Indian alternative
07 Apr
Posted by Divya M. Chandramouli

Hector Beverages started up with the vision of selling functional energy drinks for the Indian audience. Quickly, it pivoted to launch Indian beverages like aam pana and panakam. Now, the company is gearing up for its next transformation and expanding its product mix to include snacks like chikki, 500 ml and 1L packs of its drinks, even as the company ramps up its distribution.

The passion for aam pana drove the founders of Paper Boat (a brand manufactured by Hector Beverages) away from the functional drinks market into the traditional Indian beverages segment. This was in 2012; today, the brand is at the cusp of replicating this success with an Indian snacks line, having recently introduced its own chikki. As Neeraj Kakkar, CEO, Hector Beverages, says, it's going to be a busy 2017 with the company ramping up its product lines and strengthening its distribution. A part of its Series-C raised in 2015 (Rs. 183 crore in funding led by Belgian investor Sofina and China's Hillhouse Capital) was used towards bettering distribution and introducing new flavours.

At present, Paper Boat offers 15 beverage flavours and has direct distribution in six Indian cities and for the rest of India, it is in a strategic distribution partnership with Indo Nissin Foods Ltd. which has a reach of over 200 cities in India. "Distribution continues to be a big challenge for us, as some of our products are region specific. We are working on spreading out to newer territories and the remotest of areas by building on our distribution," says Kakkar. In the recent times, the company has thrived on its institutional association, especially with airlines. At present, it is working on developing a similar relationship with the Indian Railways and Canteen Stores Departments across India.

Creating new memories

At Paper Boat, the ideation behind the newest beverage flavours, panakam, neer more and thandai, stemmed from customers and employees at various levels within the organisation.  The company began with a plant in Manesar and as demand grew, it added another in Mysore in 2015 and its current overall production capacity stands at 600 bottles per minute. This has helped Paper Boat add to its product offering in terms of doing special edition beverages and introducing new flavours at a fair clip. This, despite Kakkar's assertion that it takes nearly two years to bottle or as the company does it, dolypack a new flavour. It doesn't always get it right but as its track record has shown, Paper Boat has recognised when a flavour doesn't receive a favourable response and culled production in a timely manner.

Many of our customers have been asking us to launch bigger packs as they are easy to carry and store at home. We took their advice and introduced 500ml packs a few months ago and now we are going the whole hog to promote and distribute six of our drinks in shiny new 1 litre tetra packs

Keeping in line with embracing customer requests, Kakkar shares that the company is looking to launch larger packs. "Many of our customers have been asking us to launch bigger packs as they are easy to carry and store at home. We took their advice and introduced 500ml packs a few months ago and now we are going the whole hog to promote and distribute six of our drinks in shiny new 1 litre tetra packs," he adds.

Connecting with consumers

One of the driving forces behind Paper Boat's success in the Indian market has been its strong advertising, effectively communicating its message of 'drinks and memories' across both digital and mass media. A part of its investments thus far, "We are dabbling in new ways to tell stories," says Kakkar, while sharing that the company recently released a short-film as a tribute to the Indian railways, which received great reviews on social media. Paper Boat also published its first ever book, Half Pants, Full Pants, a collection of short stories by Anand Suspi, about a little boy growing up in sleepy Shimoga, to bring back the joy of reading. Then, there's the upcoming television campaign during summer for its aamras flavour. Whatever the campaign or medium, the message is consistent; Paper Boat tries to provide easy access to age-old memories in the most contemporary fashion.



Hector Beveages

Founders: Neeraj Kakkar, Neeraj Biyani

Year: 2012

City: Gurgaon

Investors: Sofina, Hillhouse Capital, Catamaran Ventures, Footprint Ventures and Sequoia Capital


Insights from Paper Boat

Idea Approach: At Paper Boat, memories created in the nooks and crannies of India inspire new flavours. The company is open to suggestions from customers and employees alike and works with those that are feasible.

Marketing Approach: Everything from the name Paper Boat to the tagline, 'drinks and memories' drives home Indian nostalgia. There is a conscious effort to stay consistent to the message irrespective of the medium used while telling the Indian story.

Distribution Approach: As Paper Boat's product range is vast and some offerings are region specific, it uses a mix of direct distribution and a partnership with Indo Nissin Foods Ltd. which has a reach of over 200 cities.

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