The trend of smoothies can be traced back to 1930 when the blender has been invented by Steve Kuhnau.1 And the earliest consumption of oats is dated as far back as 32,000 years ago.
Smart'O Bite, an entrepreneurial venture in food Industry, has brought these 2 things together and launched a new product category - oats smoothie - the smooth mixture of oats and smoothie (A drink mix). Oat smoothie is a new category for Indian consumers. The challenges of category creation is far greater than running an existing category. So for this week, we brought you the story of category creator - Story of oat smoothie and Smart’O bite.
Mr. Shivranjan, the founder of the company, has started the business in the Nov 2018. He has closed to 8 years of experience in the food industry. The company started out in B2B segment. After having discussion with his friends who run the corporate canteens, he realized that this product category could be a possible product offering in corporate or college canteen. He can get a good volume starting out with less margin, and high volume.
The pandemic made him to pivot to B2C business model and now he sells through his own e-commerce website as well as Amazon. They also have a retail presence. Pandemic has expediated the transition from B2B to B2C. Consumers moving up to middle class are likely to demand more and more branded products / packaged goods. So it was also imperative to go Direct-to-consumer from the brand building perspective.
I had a conversation with him to understand what went into creating a new category in the market. The insights from the conversation are as followed:
Consumer awareness
As Oat smoothie is a new category, it takes a lot of effort and marketing initiatives to create awareness about the product and set the consumption patterns.
If big players come into the market, they help in consumer awareness. Shivranjan has sited the example of Kellogg’s cornflakes. When they introduced the product in the market, they have invested few crores to educate the consumers about what the cornflake is, what are the benefits and with what cornflakes should be consumed. This helped dozens of local brands like Mohan, Shanti to develop their market in cornflakes category. Similarly, Saffola established Masala Oats as a category and now many companies in India are getting into manufacturing of Masala Oats.
We are trying to understand the consumption patterns of the consumers. There can be multiple variants with some changes in ingredients. That is the messaging that we have to put across.
Shivranjan receive feedbacks from many customers who not only consume it as a breakfast meal but also having it around a clock. The consumer research / feedback helped him to understand that the product can be positioned not only breakfast meal but also 4 O’ clock snacks or light dinner. He also educated consumers about how oat smoothie fine powder can be blended with other ingredients such as peanut butter, fruits to make it more fulfilling and add on to different taste. There was a need to inform customers that this supposed to be added with cold milk / curd to make it drinkable.
Product - This is in powder form. All other products in the market are in Liquid form. This is smooth in texture. As this is in Powder form you can mix it with Milk / Curd, Fruits etc. and make it at your home at a cheaper cost and as per your convenience. (Cold beverages)
Positioning - It is placed as an healthy snack options in the market. People today don’t want to invest too much time into cooking and more and more people are working from home. They can easily mix oat smoothie powder and within minutes, your smoothie is ready to enjoy. (Ready-to-eat food)
It can be positioned in the market as FUN drink at your home.
Pricing - The team has calculated cost and added margin to get the base price. They have conduced surveys to understand how much money people are willing to pay for a pouch / or family pack. They sent few samples to people to understand the buying capacity, to find out at what price point, they don’t have problem in buying. The average price from all the surveys was considered to calculate the final price (customer perception driven pricing). (Value based pricing is different than this - In the next post, we will see different pricing methods.) As there are very few companies that are selling drink mixes, competition based pricing was not an option.
Channel Strategy
In retail, we are sticking with big cities. If a person is well-versed with online, they have more insights about how this product can be used.
Channel strategy from consumer awareness point-of-view.
Smart’ O bite is using multiple channels to reach to their end customers.
His thoughts on Amazon : Amazon has taught people how to buy online. With Amazon, customer acquisition cost is less. Right now, people are coming to Amazon and buying and then for the next time, they directly go to the brand website and order.
Most of the customers could have trust issues with new e-commerce businesses. For this, businesses can choose Cash on delivery but that increase the shipping cost since business has to pay extra to logistic companies. COD along with trial pack offering can take care of the consumer hesitation of buying a new product.
Target segment
More than 50% of business comes from tier-2 and tier-3 cities which was surprising for the team. Health conscious people could be the target segment for this product.
Other Key points:
Shipping cost is high in e-commerce.
You can’t run a business without having repeat buyers.
Smart’ O bite is launching variants such as Orange / Coffee because these flavors are more acceptable in the market.
Final note - The journey of an entrepreneur is 99% perspiration and 1% ideation and it was quite visible when I talked to Shivranjan. So Do check it out Smart’ O bite product offerings here : https://smartobite.com/
Their social media presence: https://www.instagram.com/smartobite/?hl=en
You can also order from amazon : https://www.amazon.in/SmartO-Bite-Smoothie-Assorted-Turmeric/dp/B08KHBHGY8
I have ordered the mix and made it home - my home-made smoothie, anytime and just the way I like it. Hope you would like it too.
https://www.leaf.tv/articles/the-history-of-smoothies/
History of Quaker oat : https://www.quakeroats.com/about-quaker-oats/quaker-history
Heartfelt Congratulations to Shivranjan . Yes he has brought the new consumer category at the right time so he balance the strategy, price and position 💐💐
Heartfelt Congratulations to Shivranjan . Yes he has brought the new consumer category at the right time so he balance the strategy, price and position 💐💐