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BW Businessworld

Care The Natural Way

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When Rahul Agarwal, a 33-year-old Delhi-based chartered accountant, decided to plunge into a highly competitive personal care industry, his idea had few takers. The reason was simple: skin, hair or body care products were available not just by the dozen, but by the hundreds in India. With its legendary ayurveda base, the country had no dearth of natural and herbal products either. For such products, it’s a market spoilt for choice.

Agarwal, though, was determined as his three years research had revealed a wide gap in the existing personal care industry — the demand for organic products — and he wanted to tap it. It was similar to discovering the healthy glory of organic vegetarian food in a country known for its vegetarian fare. Agarwal’s two-year-old startup — Organic Harvest — claims to be the only company in India with a full range of organic personal care products, including skin care, hair care and body care products.

How will Organic Harvest stand out in a market that is full of natural products? How do you know “Organic Harvest” products are made using ingredients that are truly “organic”? By merely following international practices, Agarwal says. He is importing the entire lot of raw materials from globally renowned organic product supply sources. Each lot of raw material that reaches the company’s manufacturing facility in Himachal Pradesh carries raw ingredients certified by global organisations like EcoCert, OneCert and NaTrue. Sourcing these products in exactly the same way a global organic personal product company does, made it stand apart from every ayurvedic and natural products company that uses domestically available raw materials. “I consider Body Shop, Forest Essentials, L’Oreal as our competitors, though most of the international companies have a limited range of organic products,” Agarwal says.

Its top-selling products include three-in-one face wash, scrub, anti-wrinkle cream and shampoos, and 41 skin, hair and body products in addition to 18 varieties of essential oils, it manufactures.

The company works with three distribution channels. It supplies these products through 2,000 general retail stores, organised retail chains and through its own stores. Across India, the company employs over 500 sales girls to operate Organic Harvest counters in malls and large retail outlets. “There is a substantial market for us. I consider anyone who can afford to spend Rs 800-1,000 for a 30 grams cream to be a potential customer,” Agarwal says.
FUTURE PERFECT: Agarwal aims to open 10-12 stores in prominent malls and high streets within one year

It was in 2013 that Agarwal decided to try his luck in the personal care product business. He had no experience in this business, but had a successful startup in the education sector behind him. “There is a growing interest in organic foods. The idea is to avoid consuming cancer-causing pesticide residues that are often part of the vegetables and fruits that are locally available. Similarly, natural flowers and vegetables, plant and fruit parts used as raw ingredients for personal care products can also contain harmful and harsh chemical residues,” he said. Once market surveys identified the potential of organic products, Agarwal set up a research and development facility in Delhi. He also signed a contract manufacturing agreement in Parwanoo, Himachal Pradesh. “Our quality control and production teams are present in the factory. We get it done ourselves using an outsourced facility,” he said.

Organic Harvest was initially introduced in the Delhi market. Within a few months, it scaled up its operations to cover Uttar Pradesh, Punjab and Haryana. “We are today present in almost 50 cities. In two years, we have built a pan-India presence,” he adds. Recently, Organic Harvest signed up with Health & Glow, which operates around 100 stores in Bengaluru, Hyderabad and Mumbai, to deepen its presence. The company has sold over 1.6 lakh units of various products so far. The company’s growth phase also saw two industry veterans joining the top management team. Sumesh Sood, chief operating officer, was associated with major cosmetics brands such as L’Oreal, Coty Vita Care and Lakme, and has an extensive working experience of creating distribution channels in marketing and branding activities. Monjish Nandi, general manager (Sales & Marketing) has over 30 years of experience with companies like Shahnaz Husain, Lotus Herbals and Ozone Ayurvedics. He was the key person behind the launch of the product “No Marks” for Ozone, which was later acquired by Bajaj. “Immediately after the launch of the initial products, I took Sood and Nandi on board,” Agarwal says. In fact, 20 per cent of the shareholding has gone as Employee Stock Options.

“We are planning to open 10-12 stores in prominent malls and high streets within one year,” Agarwal says. The company plans to build the distribution channel pan India in next 12-18 months, covering all major cities and reaching out to more than 50,000 outlets. The company has plans for an international market too. “We are looking at exporting to Bangladesh, Nepal and the Middle East nations like Saudi and UAE in the near future. We will also launch a range of professional care products such as facial kits for salons in the coming year.

The challenges for the company will be in finding its space amongst internationally renowned brands as their import dependence nullifies any major cost advantage with international brands. Its revenue projections are equally ambitious. A Rs 25-crore target for this year, Rs 60 crore for 2016-17 and Rs 100 crore for 2017-18 will depend on its expansion plans. 

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(This story was published in BW | Businessworld Issue Dated 29-06-2015)