Raghunandan Kamath: The ice cream man
Story of Naturals Ice Cream - From 1 small store in suburbs of Mumbai, Financial capital of India, to more than 135 parlours across India
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There are a few brands that have revolutionized different industries in India over the years, be it in terms of quality, supply, or in terms of variety. They have given cold feet to their competitors, have brought in challenges, and simultaneously made a name for themselves. One such brand in the FMCG retail business is Naturals Ice Creams. A brand that understood customer choice and taste, capitalized on unique product options, and established a reputed name in the age-old ice cream parlours business of India.
Natural was founded by Raghunandan S. Kamath (Kamath). He was the youngest of eight children in his family, and spent his early life in acute poverty in a village of a south Indian state, Karnataka. The appalling story of Kamath’s poverty was evident from the fact that if two of the four brothers chose to wear clothes, the other two had to remain bare bodied. Kamath’s father was a fruit vendor who struggled to make ends meet. Being the youngest, Kamath was a happy-go-lucky kid who spent most of his childhood in a playful manner. He enjoyed swimming and climbing trees. Over the years he had developed a passion for fruit and an ability to pick the best quality. This skill that he developed helped him later on when the family moved to Mumbai in western India in search of a better life. There, Kamath started working with his brother in a food joint and soon learned all about managing a food outlet. While working at his brother outlet one thing that he observed was that India’s love to end a meal on a sweet note.
By the age of 30, Kamath had grown confident enough to decide to start an ice-cream parlour on his own. He believed that people should try their luck only in business in their domain of expertise. He also felt that one had to specialize in something to stand out from the rest. Thus, he decided to part ways with his brother. Kamath’s inclination toward fruits, the knowledge that he had acquired about fruits from his father, and his internship at Gokul Refreshments gave him the confidence and conviction that dessert should be his flagship offering.
Finally, in 1984, Kamath was brave enough to borrow just INR 350K and launched his own venture, a dream he had since he was a teenager. He started a small food joint in Juhu, an upmarket suburb in Mumbai, India. He started this business under the name Natural. He sold Pav Bhaji (hot and spicy local delicacy) and fruit-flavoured ice creams. Reason to sell Pav Bhaji was to ensure that people would end up ordering Ice Cream later. The simple idea of offering something cold after a hot and spicy dish worked and he clocked a revenue of INR 500K (USD 46.7K) in the first year. After a year, Kamath was convinced that his ice cream business was a sustainable model, and did not need supplementing support from the Pav Bhaji. He mobilized all his resources toward his core competency, i.e., ice creams. Natural’s only offered five flavours – Custard Apple, Cashew Nut and Raisins, Mango, Chocolate and Strawberry.
In a short span of time, there were traffic jams outside his shop, with cars and customers often spilling beyond the designated parking space. As he had hoped, many among them were Bollywood and cricket stars.
Kamath and Natural’s dream run continued until 1994. That year, Kamath ran into trouble with the income-tax department. Then, one of his brothers-in-law started his own ice-cream parlour. He felt betrayed. That is when he decided to scale up. He offered franchise opportunities to his relatives and long term professional associates. In a year, he set up five Natural’s stores in Mumbai.
But the competition wasn’t just local. In the years after economic liberalization, US-based Baskin Robbins had entered the Indian market. There were home-grown giants like Vadidal, Kwality Wall’s and Dinshaw. Initially he was scared. But eventually he realised that Indians are creatures of habit. After every meal they need buttermilk, fennel seeds and something sweet to end with. Unlike the mass-produced vanilla, chocolate and butterscotch, Naturals offered flavours familiar to the Indian palate, like Jackfruit and Java plum. These are difficult to manufacture and the process require considerable human intervention. Naturals’ niche became its USP.
Over the years, Kamath kept on increasing franchises, but the manufacturing hub was one in the suburbs of Mumbai. Every morning, a fleet of trucks roll out from the factory carrying the ice cream to all the Natural outlets, thus ensuring quality is not compromised.
Fast forward to 2021, the single ice cream parlour has grown into 135 outlets in various cities, offering an average of over 20 flavours at a given time. This is the story of Natural Ice Cream that recorded a retail turnover of INR 300 crore (USD 40 million) in the financial year 2020.
There were no McKinsey strategies employed by Kamath to sell fruit-flavoured ice cream. By entering a niche segment such as the ice cream, which was largely dominated by a handful of brands, Kamath took a huge risk but it eventually paid off.
Kamath's journey leaves us with few lessons:
1. Focus on your niche
2. Look for a pattern and carve a business to cater that pattern
3. Believe in self
4. Do not give up
Ultimately, there is nothing better than a great entrepreneurship story.
You don’t have to wait for the ‘big idea’. It is important to start and build upon the small ideas to create the biggest wins.
― Raghunandan S. Kamath