Ep #22 | WTF are Craft Beverages? Nikhil ft. the Founders of Blue Tokai, Subko, Svami, and Mossant

1. 0:00 – 1:48

   Intro

   1. NKNikhil Kamath0:00

      Anybody who wants to learn or who's keen on starting a coffee shop, a kombucha brand, sell tonic and service all the alcoholics in the country, should learn something here and go away with that. [upbeat music] Rolling? Ready? Hi, guys. Welcome. Uh, thank you for making the effort of lying down. So this is a lot of fun. It's not as serious as the energy you guys are giving out right now. [laughing]

   2. MCMatt Chitharanjan1:01

      [laughing]

   3. RRRahul Reddy1:01

      [laughing]

   4. NKNikhil Kamath1:02

      We're here to, like, [beep] together and, uh, have a good time. And hopefully anybody who wants to learn or who's keen on starting a coffee shop, a kombucha brand, or sell tonic and service all the alcoholics in the country-

   5. RRRahul Reddy1:20

      [chuckles]

   6. NKNikhil Kamath1:21

      Any of that-

   7. RRRahul Reddy1:22

      Yeah

   8. NKNikhil Kamath1:22

      ... should learn something here and go away with that.

   9. RRRahul Reddy1:25

      Perfect.

   10. NKNikhil Kamath1:25

       Yeah, so we're trying to achieve that. Let's start by telling everyone a little bit about ourself. Who'd like to go first? Matt, you look very interesting. You- [laughing]

   11. MCMatt Chitharanjan1:41

       [laughing]

   12. RRRahul Reddy1:41

       [laughing] Looks interesting.

   13. MCMatt Chitharanjan1:42

       Interesting face.

   14. NKNikhil Kamath1:43

       Yeah.

   15. MCMatt Chitharanjan1:43

       I peaked already.

   16. RRRahul Reddy1:44

       [laughing]

   17. MCMatt Chitharanjan1:44

       It's only downhill from here. [laughing]

   18. NKNikhil Kamath1:47

       When I

2. 1:48 – 5:13

   Matt’s Intro | Childhood & Family

   1. NKNikhil Kamath1:48

      saw you today for the first time, I was trying to, like, work out, are you Indian? Are you not Indian?

   2. MCMatt Chitharanjan1:54

      Yeah.

   3. NKNikhil Kamath1:54

      Then I looked at your eyes, and then I'm like, "No."

   4. MCMatt Chitharanjan1:57

      Mm-hmm.

   5. NKNikhil Kamath1:58

      Can't be Indian, no?

   6. MCMatt Chitharanjan1:59

      Half.

   7. NKNikhil Kamath2:00

      Half.

   8. MCMatt Chitharanjan2:01

      Half.

   9. NKNikhil Kamath2:01

      Explain.

   10. MCMatt Chitharanjan2:02

       So my father, he's from Chennai.

   11. NKNikhil Kamath2:04

       Okay.

   12. MCMatt Chitharanjan2:04

       He was born and brought up there. He emigrated to the US for graduate school. So then he settled there, and he met my mom. She's Polish, uh, German-American.

   13. NKNikhil Kamath2:13

       The Polish genes were stronger.

   14. MCMatt Chitharanjan2:14

       Yeah.

   15. RRRahul Reddy2:15

       [chuckles]

   16. MCMatt Chitharanjan2:15

       So that's how I got the eyes.

   17. NKNikhil Kamath2:17

       So you moved out when you were how young from Chennai?

   18. MCMatt Chitharanjan2:20

       No, no, I was born in the US. Born and brought up there. So I grew up in Wisconsin.

   19. NKNikhil Kamath2:24

       Mm.

   20. MCMatt Chitharanjan2:25

       Um, I went to college in New York. Uh, that's kind of where I started drinking Starbucks coffee because it was available and kind of, you know... It was never for enjoyment. It was just to have something to stay awake. So I was there for four years, studied finance, moved to San Francisco. Uh, and I was there when specialty coffee was really taking off and becoming the mainstream coffee culture. Then I started, uh, going to these coffee shops. I started understanding that coffee could be more than a functional beverage. Where it comes from, how it's roasted, how it's brewed, can open up a wide variety of flavor. And I started, uh, roasting coffee as a hobby. So I did that for a number of years. Uh, worked in, uh, financing, economics-

   21. NKNikhil Kamath3:05

       Shocks, beverages, years, everything long. [laughing]

   22. MCMatt Chitharanjan3:09

       [laughing] Uh, yeah, so I was doing that. Uh, then, uh, my parents were professors, so I thought I'd, I'd also become a professor. Went to grad school in Canada, didn't really like it. Uh, then I started doing international development projects. So then I was in the Middle East for a year, then moved back to the US. Then in 2011, there was an opportunity to work for an organization in IFA- uh, in Chennai called IFMR.

   23. NKNikhil Kamath3:32

       Okay, what is IFMR?

   24. MCMatt Chitharanjan3:33

       IFMR does financial research. So basically, they were executing research projects, uh, for US and European professors, uh, here in India. So I, like, was basically executing the on-the-ground work, doing the modeling, working with the professors. Uh, my future wife was working at the same ins- uh, organization, so we met while we were there. Uh, ended up getting married. Chennai was not a, a, a city that I personally enjoyed. I found it quite, uh, traditional, but her-

   25. NKNikhil Kamath4:04

       Is she Tamil?

   26. MCMatt Chitharanjan4:05

       No, no, she's, uh, she's from UP.

   27. NKNikhil Kamath4:08

       Wow!

   28. MCMatt Chitharanjan4:08

       But she grew up in Oman, her-

   29. NKNikhil Kamath4:09

       You have kids?

   30. MCMatt Chitharanjan4:10

       Yeah, yeah.
3. 5:13 – 7:29

   Starting Blue Tokai & Career Journey

   1. NKNikhil Kamath5:13

      did Blue Tokai happen?

   2. MCMatt Chitharanjan5:14

      Yeah, so then we, uh, we were looking for coffee, basically, is the, uh, for... Actually, we started it without a business plan, without anything, more for self-consumption. And we felt that there would be other people like us who were looking for specialty coffee. 'Cause at that point in time, it wasn't really available in, in India. Um, even when we went and talked to the growers, they felt that Indian consumers weren't ready to pay for good quality coffee, that you'd have to cut it with Robusta or do a commodity Arabica offering in order to bring the price down so that you could get acceptance. Um, so we started very small. We had a 500-gram tabletop roaster. So I would roast the coffee, and Namrata would do the grinding and the packaging, and it just kind of slowly evolved from there.

   3. NKNikhil Kamath5:59

      Was that your first job in coffee?

   4. MCMatt Chitharanjan6:02

      Yeah.

   5. NKNikhil Kamath6:03

      And what age were you when you started this?

   6. MCMatt Chitharanjan6:05

      Would've been 29.... twenty-nine.

   7. NKNikhil Kamath6:10

      And what were you doing up until you were twenty-nine?

   8. MCMatt Chitharanjan6:12

      So I started working. My first job was at an economic and real estate consulting company.

   9. NKNikhil Kamath6:16

      Yeah.

   10. MCMatt Chitharanjan6:16

       I worked at a hedge fund for a while as a trader.

   11. NKNikhil Kamath6:19

       Wow!

   12. MCMatt Chitharanjan6:20

       Uh-

   13. NKNikhil Kamath6:20

       Hedge fund. What kind of hedge fund? What did you trade?

   14. MCMatt Chitharanjan6:23

       It was a REIT, REIT hedge fund.

   15. NKNikhil Kamath6:24

       Ah, real estate. Illiquid asset classes?

   16. MCMatt Chitharanjan6:27

       No, no-

   17. NKNikhil Kamath6:28

       Uh

   18. MCMatt Chitharanjan6:28

       ... mostly the publicly traded REITs.

   19. NKNikhil Kamath6:30

       Uh.

   20. MCMatt Chitharanjan6:31

       Um, actually, it was right when that, the, you know, meltdown happened, so-

   21. NKNikhil Kamath6:36

       Mm. Were you short?

   22. MCMatt Chitharanjan6:38

       They were short, yeah, yeah.

   23. NKNikhil Kamath6:39

       Oh.

   24. MCMatt Chitharanjan6:40

       Yeah. Uh, then after that, I started doing the development projects. So I was in Jordan, working for a stone and tile export organization on a USAID project.

   25. NKNikhil Kamath6:50

       Mm.

   26. MCMatt Chitharanjan6:50

       Which I guess now there'll be no more USAID, apparently. So that was, uh, uh-

   27. NKNikhil Kamath6:55

       [chuckles] What is USAID?

   28. MCMatt Chitharanjan6:56

       It's a, a US government's aid organization-

   29. NKNikhil Kamath6:59

       Mm

   30. MCMatt Chitharanjan7:00

       ... that, uh, Trump has said is full of terrorists and needs to be shut down.
4. 7:29 – 9:06

   Adithya’s Intro | Growing up in Bangalore

   1. NKNikhil Kamath7:29

      Okay, so let's move on from Matt to Adithya. Today morning, when we were researching you, I was sitting with my team, and when I spoke about Adithya, they were like, "That cute guy!" [laughing]

   2. AKAdithya Kidambi7:42

      [laughing]

   3. NKNikhil Kamath7:42

      Meghna said this. [laughing] Right?

   4. MCMatt Chitharanjan7:45

      Yeah.

   5. NKNikhil Kamath7:46

      See that girl there. [laughing]

   6. AKAdithya Kidambi7:48

      [laughing] No, I know Meghna. I know Meghna from before. Yeah.

   7. NKNikhil Kamath7:51

      Is that why she said, "Cute guy?"

   8. AKAdithya Kidambi7:52

      Probably, probably.

   9. MCMatt Chitharanjan7:54

      [chuckles]

   10. AKAdithya Kidambi7:54

       But I know Meghna from before. Mm.

   11. NKNikhil Kamath7:57

       How?

   12. AKAdithya Kidambi7:59

       Uh, common, common friends. Bangalore is small.

   13. NKNikhil Kamath8:02

       Yeah.

   14. AKAdithya Kidambi8:03

       As large as it's gotten now-

   15. NKNikhil Kamath8:04

       Yeah

   16. AKAdithya Kidambi8:04

       ... it's really small if you've been there for over fifteen years.

   17. NKNikhil Kamath8:07

       Yeah.

   18. AKAdithya Kidambi8:07

       I've been there pretty much all my life.

   19. NKNikhil Kamath8:09

       You were born there, grew up there?

   20. AKAdithya Kidambi8:11

       Uh, born in Chennai, but I've been bor- raised in Bangalore pretty much all my life, South Bangalore. Uh, well integrated in the-

   21. NKNikhil Kamath8:19

       Mm

   22. AKAdithya Kidambi8:19

       ... in the system, where been ... Did engineering like everybody else.

   23. NKNikhil Kamath8:22

       Yeah.

   24. AKAdithya Kidambi8:23

       Uh, didn't like engineering like most people.

   25. NKNikhil Kamath8:25

       Mm.

   26. AKAdithya Kidambi8:26

       Really sucked at engineering also, like most people. [laughing]

   27. NKNikhil Kamath8:29

       [laughing]

   28. MCMatt Chitharanjan8:29

       [laughing]

   29. AKAdithya Kidambi8:31

       Uh, uh, uh, eighty fifty-five is beyond me.

   30. NKNikhil Kamath8:35

       Mm.
5. 9:06 – 14:13

   Educational Background | Family & Getting into Culinary

   1. NKNikhil Kamath9:06

      did you go from... Okay, where did you go to school, college?

   2. AKAdithya Kidambi9:08

      Yeah. So school, uh, Jyoti Kendra Vidyalaya. I, I went to Australia to do my, uh-

   3. NKNikhil Kamath9:14

      Yeah

   4. AKAdithya Kidambi9:14

      ... diploma in culinary and classical French cuisine.

   5. NKNikhil Kamath9:16

      Then you were a rich kid?

   6. AKAdithya Kidambi9:18

      Uh, I wouldn't say a rich kid. I would say only son. [chuckles]

   7. NKNikhil Kamath9:21

      I don't think poor kids are going to study culinary art in Australia. [laughing]

   8. MCMatt Chitharanjan9:25

      Yeah. [laughing]

   9. AKAdithya Kidambi9:25

      No, it was, it was, I-

   10. NKNikhil Kamath9:26

       I went to Oxford Senior Secondary School in JP Nagar, second phase.

   11. MCMatt Chitharanjan9:29

       [chuckles]

   12. AKAdithya Kidambi9:29

       Look, my dad signed, my dad signed for my loan, okay? I paid it back myself.

   13. NKNikhil Kamath9:33

       Right.

   14. AKAdithya Kidambi9:34

       Uh, he would have helped me, but I, but I still chose to pay it back on my own. But, uh, I really wanted to do that.

   15. NKNikhil Kamath9:42

       Mm.

   16. AKAdithya Kidambi9:43

       After engine- I got pushed into engineering. Then they said, "Go to work. We don't have money for you to go for engineering."

   17. NKNikhil Kamath9:48

       Wait, you did engineering, then culinary school?

   18. AKAdithya Kidambi9:49

       I did engineering first.

   19. NKNikhil Kamath9:51

       Mm.

   20. AKAdithya Kidambi9:51

       I took six years to finish engineering.

   21. NKNikhil Kamath9:52

       And then you went to culinary school?

   22. AKAdithya Kidambi9:53

       And then I went to culinary school when I was twenty-four.

   23. NKNikhil Kamath9:55

       Thank God you are the first child. [laughing]

   24. MCMatt Chitharanjan9:57

       [laughing]

   25. AKAdithya Kidambi9:57

       Yeah, I had that-

   26. NKNikhil Kamath9:58

       Imagine they had three, four like you. [laughing]

   27. AKAdithya Kidambi10:00

       Yeah, imagine, no, they would have been... Man, man, I really troubled my parents. [chuckles] But yeah, so it was a, it was a thing. Like, I was, I was really bad at, really bad at engineering. They-- My dad said: "I'm going to get you a job." He spoke to somebody, he got me a job at Titan.

   28. NKNikhil Kamath10:14

       Mm.

   29. AKAdithya Kidambi10:15

       I saw-

   30. NKNikhil Kamath10:15

       This is sounding like a good dad, huh?
6. 14:13 – 17:54

   Starting the Kombucha Journey | Building Mossant

   1. NKNikhil Kamath14:13

      did kombucha happen?

   2. AKAdithya Kidambi14:14

      Okay. So, um, my-- I was actually not the one who started making kombucha. My partner, Shishir, actually started making kombucha. He was having, uh, some skin allergy and a couple of other gut-related issues that he wanted to... So somebody s-- A doctor said, "Make kombucha-

   3. NKNikhil Kamath14:29

      Mm

   4. AKAdithya Kidambi14:29

      ... or kefir, and it's really good for you, and it'll like, it'll, it'll fully sort you out."

   5. NKNikhil Kamath14:33

      What's kefir? This is in the malls in, uh, Dubai and all that, right?

   6. AKAdithya Kidambi14:36

      Kefir is another probiotic-

   7. NKNikhil Kamath14:38

      Mm

   8. AKAdithya Kidambi14:38

      ... uh, beverage.

   9. NKNikhil Kamath14:39

      Milk beverage.

   10. AKAdithya Kidambi14:39

       Uh, milk base, mostly like lassi.

   11. NKNikhil Kamath14:42

       Mm.

   12. AKAdithya Kidambi14:42

       So to say, a more packed, enriched, probiotic lassi.

   13. NKNikhil Kamath14:45

       Mm.

   14. AKAdithya Kidambi14:45

       It's the best kind of probiotic. If you want to consume live probiotic, that's sort of-- That should be a go-to beverage. And, uh, yeah, so he started making kombucha. I was in the F&B space. I was consulting for a lot of restaurants, and I used to handle a lot of kitchens and things like that. So I actually used to buy kombucha from him.

   15. NKNikhil Kamath15:03

       Mm.

   16. AKAdithya Kidambi15:03

       Um, in 2019, just before the, just before the pandemic hit, I was working on a, a passion project that was super, super close to my heart, that shut in four months-

   17. NKNikhil Kamath15:14

       What was it?

   18. AKAdithya Kidambi15:15

       ... after we opened. It was called-- It was a wine and tapas bar. It was in, on... You know, where B-Flat was in Indiranagar?

   19. NKNikhil Kamath15:20

       Yeah.

   20. AKAdithya Kidambi15:21

       It was the floor below B-Flat. It was, it was on the first floor.

   21. NKNikhil Kamath15:23

       What was it called?

   22. AKAdithya Kidambi15:24

       It was called Haute Wine & Tapas, like haute couture. Not, not a very good name, but, uh-

   23. NKNikhil Kamath15:29

       B-Flat used to have great live music.

   24. AKAdithya Kidambi15:31

       Great live music.

   25. NKNikhil Kamath15:32

       Yeah.

   26. AKAdithya Kidambi15:32

       But it used to be a nice, like a-

   27. NKNikhil Kamath15:34

       Yeah

   28. AKAdithya Kidambi15:34

       ... it used to be, it used to be a good scene back then.

   29. NKNikhil Kamath15:36

       Yeah.

   30. AKAdithya Kidambi15:36

       And this was on the first floor of that building. It was a 70-cover restaurant, well ahead of its time. We were doing-- We were, we were working with fermentation, koji, and a bunch of things back then. Uh, shut down in four months because of they were having issues with the Indiranagar Association and things like that. It was, it was bad. It didn't-- I, I, mostly didn't want to be in the kitchen after that. That's when I joined, uh, Shishir. And, uh, the intention was to always make a better soda, so to say, not, uh, a health gut-friendly beverage. That was his perspective. I joined him to say: "I think there is a potential to make this super delicious," because I was also in my domain, right, to do a lot of fermentation and things, was what I was really good at. And, uh, so it kind of worked out. So in 2019, we started immi-- like a little bit after this project, we started Mossant in October. Eleventh of October is when we started, and, um, there were two things that we were trying to solve for at that time-
7. 17:54 – 20:05

   Challenges in the Industry

   1. AKAdithya Kidambi17:54

      Our biggest challenge was kombucha, as I think, as a market at that time, first, nobody knew about it.

   2. NKNikhil Kamath18:00

      Mm.

   3. AKAdithya Kidambi18:01

      Second, people-- Second, the some who knew about it were so divided and polarized by the product-

   4. NKNikhil Kamath18:06

      Mm

   5. AKAdithya Kidambi18:06

      ... that they were like: "I don't know if this beverage is for me. It's too funky. It all smells the same." Whatever, whatever, right? "I don't know if it's doing anything for me," et cetera, et cetera. Uh, that was what we wanted to break, right? And, uh, we really wanted to focus on-

   6. ABAneesh Bhasin18:23

      ... the teas that were available a- around us, I mean, this is the land of tea, so we wanted to do a tea-focused brand, so to say. We wanted to, we wanted to showcase all the teas around that we have from Assam, Darjeeling, specifically the Nilgiris, because those teas are super underrated. And what we thought happened to cof- is happening to coffee now, we thought would happen to tea, considering this is the land of tea, but only to realize that this isn't the land of tea, this is the land of chai. Uh, a little bit of a difference. It took us a while to sort of figure that out. Uh, but yeah, so we were, we were a tea-forward company making kombucha with teas from across, across, across India. We had two problems to solve, where the biggest problem was alcohol regulation, uh, which was you can't sell a product above zero point five percent ABV.

   7. NKNikhil Kamath19:11

      I read that somewhere.

   8. ABAneesh Bhasin19:12

      Yeah, and uh-

   9. NKNikhil Kamath19:13

      It's different in different countries, right?

   10. MCMatt Chitharanjan19:15

       Yeah.

   11. ABAneesh Bhasin19:15

       It just changed in the US.

   12. NKNikhil Kamath19:18

       It do?

   13. ABAneesh Bhasin19:18

       It just changed in the US to one point two or one or something like that. And that was also because of kombucha. Somebody in the kombucha business sort of raised up and lobbied and said, "It's not possible for you to make a kombucha, and it's like, it's really unfair." Apparently, ripe banana has an alcohol content of one point three, one point four. So it makes no sense that the ripe banana is on the shelves.

   14. NKNikhil Kamath19:39

       Really?

   15. ABAneesh Bhasin19:39

       Yeah.

   16. NKNikhil Kamath19:40

       And beer has three, four percent.

   17. MCMatt Chitharanjan19:41

       No one's ever heard about three or four percent.

   18. NKNikhil Kamath19:43

       Yeah.

   19. MCMatt Chitharanjan19:43

       Yeah, I didn't know.

   20. ABAneesh Bhasin19:44

       So it's, it's one of those things-

   21. MCMatt Chitharanjan19:45

       Banana? [chuckles]

   22. ABAneesh Bhasin19:45

       ... it's like, yeah, the regulations is very s- it's, it's, it's a little, it's a little strange.

   23. NKNikhil Kamath19:49

       Some pro- prohibition-based thing.

   24. ABAneesh Bhasin19:51

       It's, it's the law, right? For you to be on the shelf, you have to be under zero point five percent ABV, for you to be considered a FMCG product and not to go to excise to do business. And, uh-

   25. NKNikhil Kamath20:02

       So that's how kombucha?

   26. ABAneesh Bhasin20:03

       That's essentially how kombucha began.

8. 20:05 – 21:39

   How big is Blue Tokai? | India & Japan

   1. NKNikhil Kamath20:05

      I forgot to ask you, how big is the business now?

   2. MCMatt Chitharanjan20:08

      Our business?

   3. NKNikhil Kamath20:08

      Yeah.

   4. MCMatt Chitharanjan20:09

      We're at a four hundred crore run rate.

   5. NKNikhil Kamath20:12

      One thirty out?

   6. MCMatt Chitharanjan20:13

      One thirty-five, yeah.

   7. NKNikhil Kamath20:15

      And mainly which part of India?

   8. MCMatt Chitharanjan20:18

      Delhi is around forty percent, then thirty-five in Bombay. Bangalore is twelve, Pune nine, Kolkata nine, Chandigarh-

   9. NKNikhil Kamath20:30

      And how big is, uh...

   10. ABAneesh Bhasin20:31

       Sorry.

   11. NKNikhil Kamath20:31

       Sorry.

   12. ABAneesh Bhasin20:32

       How's Japan?

   13. MCMatt Chitharanjan20:34

       Japan? [chuckles] Uh, Japan, we have, uh, one cafe there. Uh, it's slow. It's, uh, uh... We've been there for a year and a half. So it started as just a roastery with a B2B and e-commerce business. Then we started doing pop-ups, and we just opened the first cafe three months ago.

   14. ABAneesh Bhasin20:52

       But how did Japan happen? I'm just curious.

   15. MCMatt Chitharanjan20:55

       It was more like an opportunistic thing. We had, uh, investors who used to run, uh, F&B businesses in Japan. Japan's the second or third largest coffee-consuming country. There's no Indian coffee there, very similar to anywhere, actually. You don't really see Indian coffee on the menu outside of India. Uh, third wave is kind of taking off. Uh, it's not as entrenched as it is in, in the US, so there's an opportunity to showcase Indian coffee in a, in a growing, in a large-

   16. ABAneesh Bhasin21:23

       Yes

   17. MCMatt Chitharanjan21:23

       ... coffee-consuming market.

   18. ABAneesh Bhasin21:25

       Yeah. Very cool.

   19. MCMatt Chitharanjan21:25

       But, uh, there's way more opportunity in India. We were-- Rahul and I were just talking about this.

   20. ABAneesh Bhasin21:29

       Yeah.

   21. NKNikhil Kamath21:30

       Yeah.

   22. ABAneesh Bhasin21:30

       I think for all our brands.

   23. MCMatt Chitharanjan21:31

       Any, any market that we look at, there's more opportunity here in India.

   24. NKNikhil Kamath21:35

       So I know Rahul quite well, so I'm going to go to him last.

9. 21:39 – 25:36

   Aneesh’s Intro | Growing up across India

   1. NKNikhil Kamath21:39

      But Anish-

   2. ABAneesh Bhasin21:39

      My turn.

   3. NKNikhil Kamath21:41

      Yes.

   4. ABAneesh Bhasin21:43

      All right, my story. I'm a foggy kid-

   5. NKNikhil Kamath21:46

      Yeah

   6. ABAneesh Bhasin21:46

      ... born and brought up-

   7. NKNikhil Kamath21:47

      Is that why the cap that says Bharat?

   8. ABAneesh Bhasin21:49

      I love this cap. Like, to me, uh, I usually always wear a cap, and, uh, there's just something about India and Bharat written like that, like, I really like it. But yeah, patriotism has always been there. I think growing up in an army background, you always, always are in that environment, right? But, uh, grew up across the country from-

   9. NKNikhil Kamath22:07

      What did your dad do in the army?

   10. ABAneesh Bhasin22:09

       My dad was in ASC, that's the logistics, uh, corps. In fact, he was posted twice in Bangalore.

   11. NKNikhil Kamath22:15

       Wow!

   12. ABAneesh Bhasin22:15

       And, uh, the one year I was... like, we were in Bangalore, uh, that was nineteen nine- ninety-seven. That was a great year because Dad was super senior. That's the first time we were ever living in a big town, a big city.

   13. NKNikhil Kamath22:27

       Yeah.

   14. ABAneesh Bhasin22:27

       Otherwise, it was only small towns. And there was so much, uh, so much access, right? You had pavilion passes to a India-Australia game and all of that stuff. I remember I went to Frank Anthony for a year-

   15. NKNikhil Kamath22:40

       Yeah

   16. ABAneesh Bhasin22:41

       ... and, uh, a runner came to our class from the principal's office, and they're like: "Principal's asked for Anish." And I was like, "Damn, for once, I didn't do anything. What happened?" And it was for Dad to be the chairman for sports, uh, chief guest for Sports Day or something. So Bangalore was a very cool year like that. But mostly-

   17. NKNikhil Kamath22:58

       So he was very senior in the army?

   18. ABAneesh Bhasin23:00

       At the end, yeah. He retired as a brigadier, took premature retirement. I think he had another three, four years to go, but he was kind of done with it. And I grew up pretty much in small towns and cities across, right from Kashmir to Rajasthan to... Apart from east, pretty much everywhere. My tenth standard for me was very pivotal in a way that photography started to become a hobby.

   19. NKNikhil Kamath23:22

       Mm-hmm.

   20. ABAneesh Bhasin23:23

       Uh, by eleventh, I was taking a lot more pictures, uh, having to borrow a friend's, uh, father's film camera. Took a portrait of my girlfriend that time, that really, I think, somewhere cemented me into photography. For me, photography is that, right? You remember certain pictures or certain times. Uh, like right now, there's so much talk about Kumbh Mela, and I've been to Amar Kumbh before on photography assignments, and I remember distinct pictures from there. So for me, photography has been a very, very integral part of my life, uh, right from my teenage years. And by twelfth, I somewhere knew that college in engineering was not for me. Again, took-- So this is the other thing. I, I did CBSE. Apart from that, one year of ICSE at Frank Anthony in between. But tenth science was like common sense. Eleventh science was, jump was ridiculous.

   21. NKNikhil Kamath24:16

       Mm.

   22. ABAneesh Bhasin24:17

       And we were in army schools, so like engineer, doctor, right? And arts was for people who were considered not bright or-... dumb or any of that. So like, yeah, we'll become engineers, we'll take p- phys, PCM, and English. I flunked everything apart from English in my eleventh exams, and it was, it was a horrible thing for me. I just couldn't study, just couldn't get myself to do math and all. But to me, crea- creativity and photography was something I was very happy with. So I think somewhere in, in my twelfth standard, we moved from Bareilly to... Sorry, Ambala to Bareilly. Dad being army, they passed me for, so I would not flunk a year. And in Bareilly, Dad was the chairman of the army school, so his only thing was, "Son, please do not flunk your twelfth. Just pass. I don't expect you to top or do anything, just pass." And I thankfully passed. I flunked my chemistry, gave a retest, got a passed eventually, but I think that time I knew that maybe going to college was not the best idea for me, and my dad had that foresight as well. My mom was a little on the line. She's like: "No, you have to go to college." And my dad was like: "No, you do what you want to do. I think you'll be fine in life." So I didn't go to college. My education was twelfth CBSE from Bareilly Army School,

10. 25:36 – 27:38

    Starting Career Path leading to Beverage Industry

    1. ABAneesh Bhasin25:36

       and, uh, right after that, I started working with three photographers in Bareilly. So I gave my twelfth boards, took one day off, started working the next day at this place called, uh, Suri, uh, Photo Labs. Uh, they actually had a pretty world-class setup for that time. So just started working and learnt a lot about photography that time. Eventually moved to Bombay in a year to learn photography here, and started assisting and getting work and, yeah, starting off. So photography became my thing after school, hobby turned profession. Then I somewhere got introduced to wine and alcohol because of photography. So I shot a lot for Diageo and couple of alcohol brands, and eventually got commissioned to shoot for a book on the alcohol industry, uh, CIBC, which is their main lobby, uh, main body that all the companies are a part of. So that assignment took me to pretty much every winery in Nashik. Everyone would oblige you with a wine tasting. I had no clue what I was doing, but being polite and tasting. And somewhere that just got me into, you know, consuming a beverage with a little more intent rather than just gulping it down. Uh, that's the same time I got introduced to coffee. I still remember first trip abroad, I was twenty-one, going for a photography fair to Cologne in, uh, Germany, and having my first cup of cappuccino, which was not that Indian cappuccino, which was that espresso in a wedding that we get. Uh, I still remember that moment. So a lot of these beverage experiences happened, and I was like: "You know what? This is very interesting. I want to learn more." So I started learning more about wines, uh, end up building an app around wines six, seven, eight, eight years back. We almost got acquired by Diageo, London. Eventually, that didn't happen, but that is what really got me into beverages. So school, photography, photography led me to beverages, and then all of this happened.

    2. NKNikhil Kamath27:37

       Very cool.

11. 27:38 – 30:35

    Rahul’s Intro | Family & Childhood

    1. NKNikhil Kamath27:38

       Rahul?

    2. RRRahul Reddy27:40

       Hello. How are you?

    3. NKNikhil Kamath27:42

       Good, how are you?

    4. RRRahul Reddy27:43

       I wish I had your sense of humor. [chuckles]

    5. NKNikhil Kamath27:47

       I have, I have the kind of sense of humor where it's easier to laugh at me than with me. [chuckles]

    6. RRRahul Reddy27:51

       Okay, I'll keep that in mind. [chuckles] Awesome.

    7. NKNikhil Kamath27:54

       Tell us more about yourself.

    8. RRRahul Reddy27:57

       Uh-

    9. NKNikhil Kamath27:57

       I met Rahul last week in, uh, Dubai, where he's starting a new store, and I checked it out.

    10. RRRahul Reddy28:03

        Amazing.

    11. NKNikhil Kamath28:04

        Quite a cool space.

    12. RRRahul Reddy28:05

        True. It's a work in progress. Um, well, uh, actually, I have some similarities to Matt, uh, in terms of our backgrounds.

    13. NKNikhil Kamath28:15

        I was thinking that, you know?

    14. RRRahul Reddy28:16

        Yeah.

    15. NKNikhil Kamath28:17

        Like, these two are full-blown c- creative people. You and Matt look more like the corporate type. [laughing] Hedge fund, nerdy. I know you went to college in the US.

    16. RRRahul Reddy28:26

        Yeah.

    17. NKNikhil Kamath28:26

        Not because you, you know, wanted to study how to cook, but like college, college.

    18. RRRahul Reddy28:31

        So I grew up in the US-

    19. NKNikhil Kamath28:32

        Yeah

    20. RRRahul Reddy28:32

        ... uh, like Matt. Um, never worked in finance, but we do have some overlaps. Um, so my-- okay, so my family's all, um, from Hyderabad. So, uh, mom and dad's side, I guess one side's from Andhra now, one side's from Telangana originally, but that's another thing. Um, but Hyderabadi, both.

    21. NKNikhil Kamath28:56

        What did your dad do? I remember meeting him.

    22. RRRahul Reddy28:58

        Yeah, so, so basically, my, my dad migrated to the States, I think it was nineteen seventy-nine, and so he was part of that, I think, like, initial wave of engineers, pre-Valley boom and, you know, pre sort of internet era and the dotcom era. And he went from-- I mean, the story goes, he went from Hyderabad to Iowa, which is like... I, I don't think you could find a more opposite, you know, environment, right? Like, corn fields and ten feet of snow and, you know. And I think it was, like, him and, like, some, like a bunch of people from Hyderabad and Punjab and, like, Iran, and there was, like, this group of, like, you know, Brown people, basically, that showed up to become, like, do EE at the time, like electrical engineering in, uh, Iowa. So he-- I don't think he was a particularly good engineer, but he, um, was, was, like, fairly entrepreneurial in spirit. So he, he, uh, graduated, and then he moved to California, and I guess there was a lot of buzz about, like, semiconductors and things at the time. And, um, so he sort of, you know, he ended up working at this company, um, called Synopsys at one point, semiconductors, and got into that semiconductor space, and then that sort of like... So he's, he's, he's become sort of like a serial entrepreneur for the last thirty-odd years now. Been in, been in the Valley, and that's where I was born. So I was born in, in the heart of the Valley, actually, a place called Fremont.... um, not too far from San Francisco. Um,

12. 30:35 – 39:26

    Experience of Growing Up Abroad as an Indian

    1. RRRahul Reddy30:35

       and-

    2. NKNikhil Kamath30:35

       How does it feel to people like you and Matt, who have gone to school in America? You don't have the same outlook of India as us kids who were born here, right? How do you see it differently?

    3. RRRahul Reddy30:48

       Oh, so different, and I think-- I'll let Matt speak for himself, but for me, that's definitely part of the, the fabric of what ended up becoming this idea called Subko. For me, it was, it was always like a grappling with being this diaspora kid who was part of this South Asian community, and I was in a-- To be fair, I was in a city and in, in a region with a lot of Indians and a lot of South Asians, so there was a nice kind of contingent from, like, all over India and in neighboring countries as well. Um-

    4. NKNikhil Kamath31:24

       When you're not Indian-

    5. RRRahul Reddy31:25

       Yeah

    6. NKNikhil Kamath31:26

       ... and you're growing up in a white school, I don't know, Iowa or whichever school you were going to when you were a teenager-

    7. RRRahul Reddy31:31

       Mm.

    8. NKNikhil Kamath31:33

       Are you wishing you were an American, from a very psychological perspective, to want to fit in? Do you get bullied more if you're an Indian kid? Matt doesn't look Indian. He looks-

    9. MCMatt Chitharanjan31:43

       No, no, but-

    10. NKNikhil Kamath31:44

        He's got watery eyes. [laughing]

    11. MCMatt Chitharanjan31:45

        You, you, you-

    12. NKNikhil Kamath31:45

        Just when he starts speaking, we get to know. [laughing]

    13. MCMatt Chitharanjan31:47

        I grew up in, like, a very, like, a village, so anybody who's not fully white is considered not white.

    14. NKNikhil Kamath31:53

        [chuckles] So are they racist if you're like-

    15. RRRahul Reddy31:55

        Yeah, you know, I, I think, I think it was always... It was an evolution, Nikhil. Like, I, I think starting off, yes, there was a lot of, "Hey, why can't I be part of that sort of majoritarian fabric of where this is?" And, you know, always feeling slightly ashamed at times and slightly-

    16. NKNikhil Kamath32:12

        How does it come across? You feel ashamed when they do what?

    17. RRRahul Reddy32:16

        I think initially, it's like little things. It's like your mom wants to pack you some Indian food for lunch, right?

    18. NKNikhil Kamath32:21

        Uh.

    19. RRRahul Reddy32:21

        And you're like, "Well, it smell-- like I love it, but it smells a little strong," right?

    20. NKNikhil Kamath32:24

        Mm.

    21. RRRahul Reddy32:24

        Like, people around you are, like, reacting to it. Like, okay, or it's like-

    22. NKNikhil Kamath32:28

        And when you say reacting, what are they doing?

    23. RRRahul Reddy32:29

        I mean, it's like: "What is that?" And they have this, like, terrible food that they're eating, right? Like some, like, like terrible, like, white bread sandwich or something.

    24. NKNikhil Kamath32:35

        Mm.

    25. RRRahul Reddy32:36

        And like, you know, that- that's one visceral reaction. Or when your parents come to pick you up, and, you know, their accent's a little different, right? Their accent, Desi accent, and whatever, and no matter how long they live there, your accent stays, right? Typically. Um, and so, you know, stuff like that. So I think a little bit of shame initially. I mean, I think that there's, like, two camps. Like, people then try to overcompensate and then sort of become like: "Hey, um, you know what? Like, I'm brown, but, like, I'm not really brown. I'm, like, more of, like, a coconut, right? So, like, I'm, like, brown on the outside-

    26. NKNikhil Kamath33:07

        [laughing]

    27. RRRahul Reddy33:07

        ... white on the inside." [laughing] Yeah, yeah. Just like, there's people that kind of like aspire to be a coconut, right?

    28. NKNikhil Kamath33:12

        Yeah.

    29. RRRahul Reddy33:12

        And I'm like: Okay, you do you.

    30. NKNikhil Kamath33:14

        Yeah.
13. 39:26 – 42:40

    Relation between Passion & Talent | Building Subko

    1. RRRahul Reddy39:26

       Sure.

    2. NKNikhil Kamath39:27

       I think, personally, that passion and talent are two forms of the same word. We often think passion or talent are inputs. Like, if you're passionate about coffee, you get into coffee, and then you realize you're talented, and you have a good outcome. I feel like passion and talent are more outputs than input. When you're better at something, when you feel good doing something, you feel like you're passionate about it, and then you inherently develop a talent, and then you continue to do it. Do you think you moved back to India and thrived because you felt that people around you treated you better, and you didn't have to deal with the nonsense of growing up in the US? Is that why you moved?

    3. RRRahul Reddy40:19

       No. I think in a weird way, if anything, I moved because the whole reasoning behind the business also started as to the motivation. So it was, it was really to kind of prove a little bit of a point, maybe, that one could build something world-class in India, and if one was good enough at that, could actually make it something relevant on the global stage. I think that was a very powerful, sort of like, motivator for me, but it had to be rooted very deeply here.

    4. NKNikhil Kamath40:51

       Why?

    5. RRRahul Reddy40:52

       Because-

    6. NKNikhil Kamath40:53

       'Cause you grew up in the US. You're as American as you're Indian then.

    7. RRRahul Reddy40:56

       That's true. That's true.

    8. NKNikhil Kamath40:57

       So why not build something in the US which satisfies all of the conditions you mentioned?

    9. RRRahul Reddy41:03

       Because I think in, in what ended up being our industry, coffee, chocolate, bakes, I think, uh, the raw material is the most important element. We're, we're, we're really an agriculture business. We're a supply chain business, and for me-

    10. NKNikhil Kamath41:16

        India is not particularly known for its coffee historically, right?

    11. RRRahul Reddy41:19

        It's not.

    12. NKNikhil Kamath41:20

        Then why India?

    13. RRRahul Reddy41:21

        Well, it's anywhere between the fifth and seventh largest producer of coffee in the world, despite not being known for it. So I think the underdog story and the chip on the shoulder are the two ways that I kind of refer to this. So-

    14. NKNikhil Kamath41:34

        Chip on the shoulder, why?

    15. RRRahul Reddy41:35

        Because as Matt said earlier, I mean, people were growing X number of metric tons of coffee a year, but they all presumed that the only market for it had to be in export. And Matt opened up the opportunity for entrepreneurs like myself to even fathom the idea of domestic consumption, and I think what we wanted to then do is, in a lot of ways, building on top of what Matt already created, was: How does this now become a cultural symbol and something of real, like, real cultural currency from a creative perspective as well? And how does that sort of play a role in a lot of the coffee brands and projects that are being fermented in a lot of the global cities around the world? And I feel like doing that in the West feels a bit false. It feels a bit dishonest if you kind of do it there without actually committing to the, to the soil, to the land, to actually having real relationships with the producers, with the farmers, and establishing it here. I think that, that was very critical for that credibility to be there, so I think that was a big reason.

14. 42:40 – 47:54

    How are Subko & Blue Tokai different?

    1. NKNikhil Kamath42:40

       How are Subko and Blue Tokai different?

    2. RRRahul Reddy42:42

       Oh, that's a fun one. [laughing]

    3. NKNikhil Kamath42:44

       [laughing] Same price point, largely?

    4. MCMatt Chitharanjan42:47

       ... No way! He's more expensive.

    5. ABAneesh Bhasin42:49

       No, no, I-

    6. MCMatt Chitharanjan42:49

       He's way more expensive. [laughing]

    7. NKNikhil Kamath42:52

       What else?

    8. MCMatt Chitharanjan42:52

       Uh, I think similar on the coffee side, I, I mean, so one is they obviously do more other products. They do, uh, cocoa, which we don't do. Uh, we didn't have bakery, our own bakery, until fairly recently, and that was by acquiring another brand, so that's a difference. Coffee side, I think sourcing is fairly similar, I think. We work with some of the same estates. Roasting, we have, you know, they have their philosophy, we have our philosophy. Even if we source the same lots of coffee, it'll be different for an end customer. We, I would say, are more mass premium. [chuckles] They're more niche premium.

    9. ABAneesh Bhasin43:38

       Niche premium.

    10. MCMatt Chitharanjan43:39

        Uh, I think the customers are slightly... I mean, I, I would say we're more-- we, we try to be more accessible. Uh-

    11. ABAneesh Bhasin43:48

        Basically calling them expensive. [chuckles]

    12. MCMatt Chitharanjan43:50

        No, no, no! Not, I don't think, uh... I, I think that what I really appreciate about Subko is they've done things in a very distinct-

    13. ABAneesh Bhasin43:58

        Yeah

    14. MCMatt Chitharanjan43:58

        ... and different way. But the, the communication that they have, the storytelling that they do, the whole brand is, is very different than other coffee brands that have started, uh, in, in specialty.

    15. ABAneesh Bhasin44:09

        I have an observation for both these brands because I've been-- I've had the privilege to see Blue Tokai from day one. I think I was one of their very early customers. [clears throat] And just to take you back in time, there was nothing speciality in the country that time. There was only Cafe Coffee Day and Barista, and that's about it. No concept of doing good coffee at home or any of that. And I think with Blue Tokai, you start in a certain way, not knowing how things are going to pan out. So you don't have a very defined brand identity, tone of language. Your brand book is not developed, right? You're just trying things out as you grow. And what I've seen with you is that I think you're one of those brands that has come out from day one with such a well-constructed world for your brand, which is very commendable. With that, you don't see that often, that you launch with everything sorted in your packaging, how your brand puts out content, to how you serve a dish, and you nail it from day one. So I think to me, that's a difference between two brands, but it's also how you guys have started in a very different year of, uh, how coffee was.

    16. NKNikhil Kamath45:21

        What else? Rahul, do you want to say something about niche and mass niche?

    17. RRRahul Reddy45:29

        Look, I, I, I think Blue Tokai has changed the palette of coffee consumption in India, and that's... I mean, without that having happened, Subko wouldn't have had a shot, to be honest. So, and that's not just because Matt's sitting here. I've, I've- I genuinely believe that. Um, I think we're different in a couple key ways. Like Matt said, we started off as being like, "Okay, we're gonna try to... The way we can premiumize this segment," was we, we felt we had to provide value addition on top of something Matt was already doing well. So I think he was, he was serving much better cup of coffee in a much better environment than it existed earlier. And we said, "Okay, so let's try our best to produce, to source the best coffee we can, roast it the best way we can." But then two key things that had to differentiate us further were building a very deep commitment to what a global Indic design language may look like, and baking in conjunction with roasting coffee. And to me, that was the next step, because if we wanted to really justify a higher price point and a more experiential sort of, you know, coffee brand, I felt that, um, what pairs really well with it are, are really world-class baked goods. Um, and I wanted to kind of bring both of those two things together and try to construct that, um, in unison. So I think the design language and then having the bakehouse kind of like, um, co- be co-created with, with the high-quality coffee, I think was important. Um, so I think that's a difference. Um, we do tend to kind of be, uh, maybe, like, bullheadedly committed to this idea of design and coffee coexisting. So we try to like, even from, like, micro lot of coffee to micro lot of coffee, we'll change an element of the design or the packaging, and I think these are things that, um, perhaps have helped us gain some support with folks that are more in the creative industries or in the entertainment sphere, or in the arts industries. And I think maybe that's something that we've had maybe more of a focus on than maybe Blue Tokai has. Um, so those are a few differences, I would say. Um, and now recently we make chocolate, so I think that's something that Matt doesn't currently do, so.

15. 47:54 – 50:30

    Hacks for a 25 year old to Compete with Subko & Blue Tokai

    1. NKNikhil Kamath47:54

       So I'm a twenty-five-year-old boy or girl who wants to enter the coffee industry and compete with you guys. I walk into Bandra, there is a Blue Tokai. Next to it, there's a Subko. The third store right adjacent to both of you, let's say, on the same lane as Bougie Cafe, is me. What can I do today that will work, at what price point, that will send some of your traffic to me?

    2. MCMatt Chitharanjan48:24

       I think you should be a multi-roaster cafe. So now there's many other coffee companies around. If you're a place that I can go to, where I can get coffee from a... roaster A, B, C, and I can choose and figure out what I like, I think that would be a good differentiator.

    3. NKNikhil Kamath48:40

       Do you think my audience cares that much where the coffee is roasted?

    4. MCMatt Chitharanjan48:46

       They just want different, something different. So if you come to Blue Tokai, you're only going to get Blue Tokai coffees. If you go to Subko, you're only going to get Subko coffees. Where it's a good opportunity for people to sort of understand what else is out there, and I think people appreciate variety.

    5. NKNikhil Kamath49:01

       ... If I were to be honest, like, I'm no big coffee aficionado or something like that, but I, I know, like, a good coffee from a bad coffee, but beyond a point, I can't distinguish which roaster, what, all of that. Me, twenty-five years old, starting a store in Pali Hill, Bandra, will make the assumption that my clientele is largely like me.

    6. MCMatt Chitharanjan49:24

       Mm-hmm.

    7. NKNikhil Kamath49:26

       It's not multi-roastery that will necessarily-- Like, I could tell, uh, some of the people we play paddle with, that this particular coffee shop has different roast from different places, uh, but it is next to a Subko, a Blue Tokai, a Bougie, a whatever else is on that road. I don't think I'll be able to draw them in with just that.

    8. MCMatt Chitharanjan49:49

       So I think that's just a way to differentiate the offering. I think food is unfortunately something that's very... I mean, I say this as a copy person, food is something that really makes or breaks the, the success of a store.

    9. NKNikhil Kamath50:03

       Mm-hmm.

    10. MCMatt Chitharanjan50:04

        For sure.

    11. NKNikhil Kamath50:06

        What if, uh, he decides to sell biryani and coffee? Do you think something like that could work?

    12. MCMatt Chitharanjan50:10

        No, it's too dissonant. People who are going to coffee shops are not looking for, uh, biryani.

    13. NKNikhil Kamath50:17

        Mm-hmm.

    14. MCMatt Chitharanjan50:17

        That being said, there are coffee shops where coffee is only a small part of the sales, where they have an extensive menu, and those, those do incredibly well.

    15. AKAdithya Kidambi50:25

        Like a, like a, like a co-working space or such, where there's coffee-

    16. MCMatt Chitharanjan50:29

        It's not-- I mean, the-

16. 50:30 – 58:09

    Cafe Offerings of both Coffee & Food | Consistency, Subculture, Distribution

    1. AKAdithya Kidambi50:30

       ... So-

    2. MCMatt Chitharanjan50:30

       So one thing that we notice in our, in our business is that if we extend the menu, it increases the sales. So the wider variety of food items that you have, the more you're able to sell. Operationally, it just is very challenging to-- I mean, we don't want to run kitchens. So if you're able to run a, a restaurant and have coffee, in the market right now, that's an amazing proposition.

    3. AKAdithya Kidambi50:52

       So you sell your food with coffee?

    4. MCMatt Chitharanjan50:53

       Yeah.

    5. AKAdithya Kidambi50:53

       Oh, okay.

    6. NKNikhil Kamath50:54

       What's that percentage split?

    7. MCMatt Chitharanjan50:56

       For us? For us, we sell forty-five percent is beverages, and forty percent is food, and then fifteen percent is the retail packets and bread.

    8. NKNikhil Kamath51:04

       And for you, Rahul?

    9. RRRahul Reddy51:06

       We're almost exactly at fifty-fifty, believe it or not.

    10. NKNikhil Kamath51:09

        Yeah?

    11. RRRahul Reddy51:09

        Yeah. Some-- Like, we've had quarters where there's a forty-five, fifty-five, you know, it's... Yeah.

    12. NKNikhil Kamath51:16

        So coffee shops are actually making fifty percent of revenue from food?

    13. MCMatt Chitharanjan51:20

        Yeah.

    14. NKNikhil Kamath51:21

        All coffee shops? If you both are, I'm extrapolating.

    15. RRRahul Reddy51:24

        I think that's probably-

    16. MCMatt Chitharanjan51:26

        But so also, we have a more-- I mean, theirs is definitely very differentiated, but even for us, we have a more differentiated food offering than, let's say, a Starbucks or a Costa, where they're just getting, uh, food from, like, a Taj Sats and then just reheating it.

    17. NKNikhil Kamath51:40

        So do you have, like, a hot kitchen in the coffee shop?

    18. MCMatt Chitharanjan51:43

        We used to. We don't have a hot kitchen. We have a central kitchen, and then we have a make line. So it's freshly assembled and prepared, but it comes centrally from our central kitchens.

    19. NKNikhil Kamath51:52

        Is that a big differentiator, that if you had a hot kitchen, you could draw in some-- You have a hot kitchen. Does that make a big difference in getting people in the door?

    20. MCMatt Chitharanjan52:00

        It helps in getting higher APCs, for sure.

    21. NKNikhil Kamath52:03

        What is a APC?

    22. MCMatt Chitharanjan52:04

        Uh, average-

    23. AKAdithya Kidambi52:05

        Average person

    24. MCMatt Chitharanjan52:05

        -per person. Average check per person.

    25. NKNikhil Kamath52:08

        But the CapEx related to a hot kitchen kind of mitigates that-

    26. MCMatt Chitharanjan52:11

        It's not necessarily a CapEx thing, it's more of a managing a kitchen staff. Also, you're not really able to get very high quality-- I mean, our experience, you're not able to get high-quality kitchen talent because people who are very talented, they don't want to work at a coffee shop, they want to work at a restaurant. They don't-

    27. AKAdithya Kidambi52:26

        I also feel like it's a, it's a matter of iteration, right? There's like a-- There's way too much iteration-

    28. MCMatt Chitharanjan52:30

        Yeah

    29. AKAdithya Kidambi52:30

        ... in the kitchen these days. Uh-

    30. MCMatt Chitharanjan52:32

        Yeah, you, you, you, you'll have a hard time retaining talent.
17. 58:09 – 1:04:27

    Waves of Coffee - Shift to Coffee

    1. RRRahul Reddy58:09

       the way I see this, Nikhil, is again, like, coming back to this sort of the maturation, at least from the coffee perspective of the, the specialty coffee market. It- I think the f- I'm going to go into this, like, wave discussion, right? So there's, there's, there's this literature that talks about the waves of coffee, right? The first wave, the second wave, the third wave, and now there's like fourth and fifth wave. And so, let's say we're now in like, very firmly in this third wave of coffee movement now, where like, specialty coffee is permeating the market, right? Now, within that third wave, I feel like there's multiple layers. There's multiple more waves. So the first wave within the third wave is probably when a brand like Blue Tokai comes and, like, disrupts that market, right? Like, all of these big international players are now like: "Whoa, there's a, there's a homegrown brand that can do this, that can scale good coffee, sources everything domestically, has beautiful cafe spaces." Amazing. What I think you see globally, what happens is that then you'll have a population of different, uh, roasters. Roasters are also doing what you said, which is sourcing from farms, roasting their own beans. Then they'll start doing some wholesale. Now, I think the point at which India has to now go is, like, everybody doesn't need to be a roaster. It's very capital-intensive, it takes a lot of quality control. I mean, you have to, you have to build very strong supply chain linkages. If that's your passion, do it.

    2. NKNikhil Kamath59:32

       How much money does it take? Like, if I have- if I'm twenty-five and I have two crore rupees to start a coffee shop, roastery is not covered in that. No.

    3. RRRahul Reddy59:40

       Tough.

    4. NKNikhil Kamath59:41

       Right.

    5. SPSpeaker59:42

       But also, as a twenty-five-year-old, are you starting this business to just run this one outlet to earn that money from that?

    6. RRRahul Reddy59:47

       Yeah.

    7. SPSpeaker59:47

       Or you're starting it-

    8. NKNikhil Kamath59:48

       Yeah

    9. SPSpeaker59:48

       ... to kind of become a-

    10. NKNikhil Kamath59:49

        I want to start one coffee shop next to the two of you, and I want to make money.

    11. SPSpeaker59:53

        Okay. You're not worried about funding, like, uh, raising the capital, giving exit-

    12. NKNikhil Kamath59:59

        No, two crores, two crores

    13. SPSpeaker59:59

        ... and all of that?

    14. NKNikhil Kamath59:59

        I have this rich uncle who's agreed-

    15. SPSpeaker1:00:00

        Okay

    16. NKNikhil Kamath1:00:01

        ... to give me two crores.

    17. SPSpeaker1:00:01

        And he's, he's happy to, if you just pay him back on your own time.

    18. NKNikhil Kamath1:00:04

        If I make him a decent return on the cash he's given me.

    19. SPSpeaker1:00:06

        I see.

    20. NKNikhil Kamath1:00:08

        Yeah.

    21. RRRahul Reddy1:00:08

        Yeah, but, like, what I would say is, like, as the, as the market is maturing now, and, and there are a certain collection of coffee roasters who hopefully all, you know, have their own little areas of differentiation, for coffee shops to now proliferate, right, in the way Nikhil is describing, where it's like, you know... The way I would love to see India go is that every city, every neighborhood, has, like, dozens of local coffee shops, right? And you will also still have maybe literally a dozen great roasters in the country-

    22. NKNikhil Kamath1:00:41

        Mm

    23. RRRahul Reddy1:00:41

        ... that have their own shops and also maybe supply. And I think, you know, so, so the more, the more of these local, smaller scale shops that open, they can, you know, choose the roaster that they want to work with, or multiple.

    24. SPSpeaker1:00:56

        Yeah.

    25. RRRahul Reddy1:00:57

        And they have to have other differentiations. They have to have some kind of a conceptual arc. Like, could there be a coffee shop that's built for the investor community? I don't know, right? Maybe that's, maybe that's, maybe that's a coffee concept right there, right? Or, you know, I don't know, like a mini paddle coffee shop, like, literally, like an indoor paddle-only coffee shop.

    26. NKNikhil Kamath1:01:18

        Do you think that could work?

    27. RRRahul Reddy1:01:19

        Hundred percent.

    28. MCMatt Chitharanjan1:01:20

        ... it would work.

    29. NKNikhil Kamath1:01:21

        Paddle and coffee?

    30. ABAneesh Bhasin1:01:23

        I have a slightly different view. In fact, I have a question for all three of you. Sorry, because you're not that much in Bombay. What does a boujee do, that they are packed all the time? Monday morning, eight o'clock, they're packed. What is it?
18. 1:04:27 – 1:10:21

    How Big is the Craft Industry in India

    1. NKNikhil Kamath1:04:27

       Do you guys want to talk about how big the market is? I tried to research online. I didn't get to a number. I got, like, wide approximations, but I didn't figure out how much is the number. If I'm selling a coffee for more than hundred rupees, and people are buying, how big is that market in India?

    2. MCMatt Chitharanjan1:04:43

       There's only around five thousand branded coffee shops and another equivalent amount of unbranded.

    3. NKNikhil Kamath1:04:48

       And what would that number be in terms of net sales?

    4. MCMatt Chitharanjan1:04:52

       Net sales, it's around billion, is what they estimate.

    5. ABAneesh Bhasin1:04:55

       There are five thousand branded coffee shops? Damn! I didn't know that. But, you know, on the coffee bit, a lot of people who consume coffee, according to me, are having a coffee beverage and not just coffee.

    6. MCMatt Chitharanjan1:05:09

       Mm.

    7. ABAneesh Bhasin1:05:09

       Because if you're going into a Starbucks and ordering a mocha latte with a red velvet foam on top of a pumpkin spice something, how much of it is coffee versus sugar?

    8. MCMatt Chitharanjan1:05:20

       I think very few people are coming for the reasons that you mentioned, the health aspect, killing hunger-

    9. NKNikhil Kamath1:05:24

       Is that just me?

    10. MCMatt Chitharanjan1:05:25

        Yeah.

    11. ABAneesh Bhasin1:05:25

        That's us, uh, Paddle people. [chuckles]

    12. NKNikhil Kamath1:05:28

        Yeah? That bubble.

    13. MCMatt Chitharanjan1:05:29

        Yeah.

    14. NKNikhil Kamath1:05:29

        So most people are coming in for what?

    15. MCMatt Chitharanjan1:05:31

        A place that they can sit, uh, that has something enjoyable to drink. Um, it's not... A- and so you'll, you'll segregate ver- versus like, "I like an atmosphere in this place," or, "I like the products in this place," but it's not, it's not for any functional... And I think the other thing is that it has a-

    16. RRRahul Reddy1:05:52

        But there is caffeine.

    17. MCMatt Chitharanjan1:05:53

        You think?

    18. RRRahul Reddy1:05:54

        There is caffeine.

    19. MCMatt Chitharanjan1:05:55

        Oh!

    20. ABAneesh Bhasin1:05:55

        There is caffeine.

    21. RRRahul Reddy1:05:56

        Yeah, yeah. I mean, as in, when I say caffeine-

    22. MCMatt Chitharanjan1:05:57

        But you think that's a driver for people?

    23. RRRahul Reddy1:05:59

        Yeah, because-

    24. MCMatt Chitharanjan1:05:59

        I mean, I think it's addictive, so one is, it's addictive. Uh-

    25. RRRahul Reddy1:06:02

        I think it's a driver only from the lens of like, you're do- you're, you're having a meeting, okay? What do you- what do you socialize or meet or speak over? It's not a coincidence that you're drinking coffee while having to have your energy be intact, right? So I think from that, like, correlational point of view, um, whether you're like co-working, quote-unquote, on your own, or running a meeting with someone, I don't think it's a coincidence that you're probably going to drink coffee and not like a very heavy, sugary, milky chai. From that perspective.

    26. NKNikhil Kamath1:06:33

        Can I ask you a layman question, as somebody who has no knowledge about coffee, like idiot question? If I started a coffee shop, let's say you have hundred milligrams of caffeine in your coffee, and you have hundred and ten or whatever. What happens if me, the twenty-five-year-old, starts a shop next to you and puts three hundred and fifty milligrams of caffeine? Wouldn't it be more addictive?

    27. MCMatt Chitharanjan1:06:56

        Yeah, it would.

    28. ABAneesh Bhasin1:06:57

        It would also get you really hopped up, I think.

    29. RRRahul Reddy1:07:00

        Yeah. Could, could go, could go down-

    30. MCMatt Chitharanjan1:07:01

        The thing is, it won't taste very good, though.
19. 1:10:21 – 1:12:31

    How to Influence the Crowd at a Coffee Shop

    1. NKNikhil Kamath1:10:21

       You're almost going to a coffee shop for the crowd that is in a coffee shop, almost like a bar. How do you influence that?

    2. MCMatt Chitharanjan1:10:28

       I mean, as- uh, for us at least, we try to do a lot of community events in the beginning, having pop-ups, having music, having art gallery, people come and do installations.

    3. NKNikhil Kamath1:10:42

       Mm.

    4. MCMatt Chitharanjan1:10:42

       So I think you have to have, like, you have to have a hook. Like, what, what Rahul was saying is very, is very true. You have to have some kind of reason for people to come.

    5. NKNikhil Kamath1:10:50

       Is it like a bar, where you bring in the women and the men follow?

    6. MCMatt Chitharanjan1:10:56

       No, I don't think so. [chuckles]

    7. SPSpeaker1:10:58

       No, I don't think so.

    8. NKNikhil Kamath1:10:59

       So what, what hack can you tell me in terms of getting the kind of crowd in a coffee shop which would attract more people?

    9. SPSpeaker1:11:07

       That's a good question. [chuckles]

    10. MCMatt Chitharanjan1:11:09

        [chuckles] If I had an answer to that, I would replicate it across our hundred and thirty-five outlets. But, uh, uh, I mean, for us, we've tried to just do it by product.

    11. NKNikhil Kamath1:11:21

        Mm.

    12. MCMatt Chitharanjan1:11:21

        Uh, and I think at a certain scale, that works, right? If you know that, okay, I know that this brand has a consistent coffee, consistent food, so when I'm choosing to go for my meetings or, or whatever, I can go to that place and-

    13. NKNikhil Kamath1:11:34

        Mm

    14. MCMatt Chitharanjan1:11:34

        ... be assured a certain level, I think that works. But for, uh, like a standalone coffee shop, you'd have to have something more significant.

    15. NKNikhil Kamath1:11:43

        I feel like I might be the anomaly, but I can't remember the last time I chose to go to a coffee shop because they have consistent food and coffee.

    16. MCMatt Chitharanjan1:11:53

        That you like, so I mean-

    17. NKNikhil Kamath1:11:55

        Maybe I can go to a restaurant for that reason, but not a coffee shop.

    18. SPSpeaker1:11:57

        Yeah, same. Same.

    19. NKNikhil Kamath1:11:59

        Right?

    20. SPSpeaker1:11:59

        Yeah. I, I would... I mean, as non-coffee people-

    21. NKNikhil Kamath1:12:04

        Mm

    22. SPSpeaker1:12:04

        ... you know, I would- I wouldn't necessarily go to a coffee shop for that repeat experience.

    23. MCMatt Chitharanjan1:12:09

        But for both of you-

    24. SPSpeaker1:12:10

        Uh

    25. MCMatt Chitharanjan1:12:10

        ... what's your standard coffee order at a coffee shop?

    26. NKNikhil Kamath1:12:13

        Americano.

    27. SPSpeaker1:12:14

        Yeah, uh, latte.

    28. MCMatt Chitharanjan1:12:16

        But so if you knew one place had-

    29. SPSpeaker1:12:18

        Latte or cortado

    30. MCMatt Chitharanjan1:12:18

        ... an Americano that you liked versus a place that had a cool-looking vibe, you'd choose the cool-looking vibe?
20. 1:12:31 – 1:18:13

    Difference between Good & Bad Coffees

    1. NKNikhil Kamath1:12:31

       at home, I used to do Nespresso coffee for the longest time, then Rahul did some mini Subko setup.

    2. SPSpeaker1:12:39

       I saw the Linea Mini there.

    3. NKNikhil Kamath1:12:40

       Yeah, it's here as well.

    4. SPSpeaker1:12:42

       Nice.

    5. NKNikhil Kamath1:12:43

       Now I know that the Nespresso is bad.

    6. MCMatt Chitharanjan1:12:45

       Mm.

    7. SPSpeaker1:12:46

       Yeah.

    8. NKNikhil Kamath1:12:46

       'Cause if I have a cup of this and I have a cup of that, I can distinguish.

    9. MCMatt Chitharanjan1:12:50

       Yeah.

    10. NKNikhil Kamath1:12:52

        But when I'm going into a nice coffee shop, there, this distinction becomes a little bit harder, 'cause all the coffees are kind and nice. Or like, you know, like many things in life, like alcohol, if I'm having Grey Goose Vodka or Absolute Vodka, how much is the differentiation in taste that is actually palpable, and I can distinguish? And how much is the fact that I know one bottle costs two times the other, so it must be good? You know what I mean?

    11. MCMatt Chitharanjan1:13:23

        Yeah.

    12. RRRahul Reddy1:13:25

        ...Yeah.

    13. RRRahul Reddy1:13:25

        Do you get this question a lot with tonic?

    14. RRRahul Reddy1:13:28

        Not with tonic. I think it's more of alcohol.

    15. RRRahul Reddy1:13:31

        So no one's like, "Hey, like, can you really tell the difference between the tonics anyway?"

    16. RRRahul Reddy1:13:35

        You can, because, um-

    17. MCMatt Chitharanjan1:13:37

        Yeah

    18. RRRahul Reddy1:13:37

        So there's a line by Fever-Tree, which I love, which is like three-fourth of your drink is the mixer.

    19. RRRahul Reddy1:13:42

        Mm.

    20. RRRahul Reddy1:13:42

        So by volume, it's so much that you will...

    21. MCMatt Chitharanjan1:13:44

        Yeah.

    22. RRRahul Reddy1:13:45

        And why I was asking them about that coffee-

    23. MCMatt Chitharanjan1:13:46

        You can, you can actually instantly tell the difference between tonics.

    24. RRRahul Reddy1:13:48

        Yeah, yeah.

    25. RRRahul Reddy1:13:49

        Yeah.

    26. RRRahul Reddy1:13:49

        Like, I, the other day tasted-

    27. MCMatt Chitharanjan1:13:50

        Sugar-

    28. RRRahul Reddy1:13:51

        Yeah, yeah

    29. MCMatt Chitharanjan1:13:51

        ... bitterness.

    30. RRRahul Reddy1:13:52

        You can.
21. 1:18:13 – 1:24:11

    Starbucks | Difference in Coffee Culture of India and USA

    1. MCMatt Chitharanjan1:18:13

       times for us.

    2. NKNikhil Kamath1:18:13

       Is Starbucks doing well in India? [chuckles]

    3. RRRahul Reddy1:18:15

       [chuckles] Yes and no.

    4. MCMatt Chitharanjan1:18:18

       [chuckles] It's fine, yeah.

    5. NKNikhil Kamath1:18:19

       [chuckles] Go ahead.

    6. RRRahul Reddy1:18:20

       I, I mean, it's-

    7. NKNikhil Kamath1:18:21

       There was some rumor that Starbucks is shutting down-

    8. MCMatt Chitharanjan1:18:23

       Yeah

    9. NKNikhil Kamath1:18:23

       ... then they came and clarified.

    10. MCMatt Chitharanjan1:18:24

        That's fake. That was fake.

    11. RRRahul Reddy1:18:24

        They clarified that.

    12. NKNikhil Kamath1:18:25

        That it's fake. But how is it actually doing?

    13. RRRahul Reddy1:18:27

        But, but I was gonna... I don't have any data on how they're doing. What I would say, though, Nikhil, is the... When you say speciality, this is an interesting one. So Starbucks's perception differs heavily based on which country it's in, right? Which means what? Which means in India, Starbucks is the biggest specialty coffee brand, even though me and Matt would not refer to it as a specialty coffee brand, which is kind of fascinating. 'Cause price point-wise, Starbucks is even at times more expensive than we are, and, well, they are, they are who they are. They have the brand that they have, and you have to respect that. Um, but that's, that's interesting to me.

    14. MCMatt Chitharanjan1:19:11

        I mean, so they've gotten to a thousand plus crores, they're at ninety-seven cities-

    15. RRRahul Reddy1:19:15

        Yeah

    16. MCMatt Chitharanjan1:19:15

        ... so, I mean-

    17. NKNikhil Kamath1:19:16

        Profitably?

    18. RRRahul Reddy1:19:18

        No.

    19. MCMatt Chitharanjan1:19:19

        No.

    20. NKNikhil Kamath1:19:19

        Why is that? Why is Starbucks globally as profitable as they are? I've-... because I work in the stock markets, I've looked at it from a very stock market lens. They're almost a bank as much as they are a coffee shop. But for somebody who's so profitable outside, why are they struggling to break even and make money in India?

    21. MCMatt Chitharanjan1:19:41

        Their cost structure is also quite different in India versus other places. So they pick-

    22. NKNikhil Kamath1:19:45

        It should be better, right?

    23. MCMatt Chitharanjan1:19:46

        No, because the, it goes back to the real estate. They pick the most prime locations in every market that they're operating in, so the rentals that they're paying are, are incredibly high.

    24. NKNikhil Kamath1:19:56

        The one thing I've noticed is in America, a lot of people buy a coffee and walk.

    25. MCMatt Chitharanjan1:20:02

        Yeah.

    26. RRRahul Reddy1:20:02

        Yes.

    27. NKNikhil Kamath1:20:03

        They-

    28. RRRahul Reddy1:20:03

        That's-

    29. NKNikhil Kamath1:20:03

        -don't occupy real estate.

    30. RRRahul Reddy1:20:04

        Exactly.
22. 1:24:11 – 1:28:59

    Opportunities in Tier-2 Cities | Price Sensitivity

    1. ABAneesh Bhasin1:24:11

       Tier-2 is good for opening a coffee shop.

    2. NKNikhil Kamath1:24:13

       Is it?

    3. ABAneesh Bhasin1:24:13

       Yeah, I think so. There's lesser options-

    4. MCMatt Chitharanjan1:24:16

       Under served-

    5. ABAneesh Bhasin1:24:16

       So you may be-

    6. MCMatt Chitharanjan1:24:16

       More underserved. Still, there's enough-

    7. ABAneesh Bhasin1:24:18

       Yeah

    8. MCMatt Chitharanjan1:24:18

       ... of a population who appreciates coffee, who's interested in it.

    9. RRRahul Reddy1:24:22

       Me and Matt were talking about this earlier, like, before we came here. What is the thesis behind brands that want to sell coffee for less than a hundred rupees? 'Cause for me, coffee is like this upwardly mobile, aspirational beverage. So suddenly, you're running into this, this like, U-curve, right? Where, who are you serving? You're not sure. You're just trying to have a race to the bottom with the product. I mean, I... I think I've spoken to Nikhil once about this, actually, about... I think you asked me a question once, Nikhil, about what I would do, um, with pricing, like what pricing strategy might look like at Subko.

    10. NKNikhil Kamath1:24:58

        Mm.

    11. RRRahul Reddy1:24:58

        And I think my an- like, with various things happening, supply chain shocks, inflation, you know, how would you try to deal with that? Would you make things more affordable for your customers? Would you start... You know, and I, I think given the kind of brand we are trying to build, I said, "No, we would, we would maintain our standards obviously very high," but I think the customer base we have ex- expects sort of like this, this premiumization of the segment. And I'm just wondering, I'm personally not sure. There, there are multiple brands that have come up and raised a lot of capital recently who-

    12. RRRahul Reddy1:25:32

        ... like, have coffee for less than, I mean-

    13. MCMatt Chitharanjan1:25:34

        Yeah, I, I don't think that dropping the price, uh, increases demand so much to compensate for that.

    14. NKNikhil Kamath1:25:40

        No?

    15. MCMatt Chitharanjan1:25:40

        The people who are coming for a coffee shop are, uh, more price insensitive.

    16. NKNikhil Kamath1:25:46

        What price are most people okay to spend on a coffee when they come into Blue Tokai?

    17. MCMatt Chitharanjan1:25:49

        So we've done a survey-

    18. NKNikhil Kamath1:25:51

        Yeah

    19. MCMatt Chitharanjan1:25:51

        ... and it's two fifty rupees is kind of the, they, they won't notice anything up until two fifty rupees. If it's above two fifty rupees, then they, then they'll start to pay attention.

    20. NKNikhil Kamath1:26:00

        Right.

    21. RRRahul Reddy1:26:02

        What's your price- pricing average?

    22. MCMatt Chitharanjan1:26:04

        So cappuccino is two forty.

    23. NKNikhil Kamath1:26:08

        There come some coffee shops in Bangalore I go to outside of Blue Tokai and Subko. There's Araku, there's Lavonne. Uh, like, even for me, it's complicated now when I have to choose. I'm trying to think, why do I choose to go to one versus another? It's coming down to avocado toast and eggs for me, [laughing] I must say.

    24. RRRahul Reddy1:26:31

        There used to be one coffee shop in, uh-

    25. NKNikhil Kamath1:26:33

        Yeah

    26. RRRahul Reddy1:26:33

        ... JP Nagar. I don't know if around the corner, Benki?

    27. NKNikhil Kamath1:26:35

        Yeah, yeah, yeah.

    28. RRRahul Reddy1:26:36

        You know Benki?

    29. NKNikhil Kamath1:26:36

        Yeah, yeah.

    30. RRRahul Reddy1:26:38

        Standard, right?
23. 1:28:59 – 1:33:21

    Recent Consumption Trends | Health-Conscious Trends

    1. NKNikhil Kamath1:28:59

       I'm obsessed with consumption trends, okay? Uh, so I'm constantly doing research, again, from a very investor lens. Like, right now, if you were to take the end of January, beginning of February, many different sectors, consumption is slowing down. I want... I don't want to name brands because I should not be talking about their numbers. But, like, say, a clothing brand, I'll name foreign ones 'cause I can. Like, a Zara in India, which was growing at thirty, forty percent, or a H&M a year ago, is now either not growing or flatlining. Vehicle sales, be it passenger or commercial, have slowed down to a large degree. Clothing brands, uh, across price points, the ones who are selling at five hundred rupees a T-shirt to five thousand rupees a T-shirt, we're seeing slowdown across all of this. Uh, I've gone around, asked a bunch of people who run, operate brands like this: why is it happening? Many believe it's cyclical. There was a boom in consumption after COVID. That boom is kind of plateauing out right now. Uh, nobody knows the real reason. It could be that, it could be that discretionary income is going down 'cause the cost of money in the West is higher, and less money is finding its way. Uh, for a long time, especially in Bangalore, everything we bought and did was subsidized by foreign Ps and VCs who were dumping money on me and my friends in the startup world. Not so much me, but they were, in turn, subsidizing everybody. The one unique insight a lot of these consumption gurus who run many, many brands have, is anything health in this three-month cycle, two-month cycle, is really starting to gain traction. People are really doubling down on health, which is ironical in a way, because if your discretionary spend is going down, your spend on health should be going down. But that, that is like a counter trend almost. Do you think there is a scope to incorporate that here in, say, the healthiest coffee shop next to Subko and Blue Tokai, where you guys are selling cookies and all of that, and I don't? Can I do that?

    2. MCMatt Chitharanjan1:31:28

       Yeah. Yeah.

    3. NKNikhil Kamath1:31:30

       Can I say, whatever you come in-

    4. MCMatt Chitharanjan1:31:31

       High protein-

    5. NKNikhil Kamath1:31:32

       Yeah

    6. MCMatt Chitharanjan1:31:33

       ... protein coffees or protein-

    7. RRRahul Reddy1:31:35

       MCT and-

    8. MCMatt Chitharanjan1:31:36

       Yeah

    9. RRRahul Reddy1:31:36

       ... all that.

    10. NKNikhil Kamath1:31:36

        Do you think that could work?

    11. MCMatt Chitharanjan1:31:37

        Yeah, yeah.

    12. NKNikhil Kamath1:31:38

        What if I say you come into my coffee shop-... I will make sure you walk out without consuming more than two fifty calories.

    13. SPSpeaker1:31:44

        Hmm.

    14. NKNikhil Kamath1:31:45

        The minute you've spent two fifty calories, I block you from having anything.

    15. AKAdithya Kidambi1:31:49

        I would go there. [chuckles]

    16. NKNikhil Kamath1:31:50

        You would go there, eh?

    17. AKAdithya Kidambi1:31:51

        I would go there.

    18. NKNikhil Kamath1:31:52

        Right?

    19. SPSpeaker1:31:54

        I think it's an interesting angle. And both of you guys have marked as low calorie on, on your products, I noticed.

    20. AKAdithya Kidambi1:32:00

        Yeah.

    21. SPSpeaker1:32:00

        Low sugar, zero calorie even, right?

    22. AKAdithya Kidambi1:32:02

        I, I, I mention the full calorie content on the front label-

    23. SPSpeaker1:32:07

        Yeah

    24. AKAdithya Kidambi1:32:07

        ... not per hundred milliliters.

    25. SPSpeaker1:32:08

        Not just, not just per hundred. Even, even we, even we do that.

    26. AKAdithya Kidambi1:32:11

        Front label, right bottom in the center-

    27. SPSpeaker1:32:14

        Yeah

    28. AKAdithya Kidambi1:32:14

        - total calories of the bottle right there.

    29. SPSpeaker1:32:15

        Hmm. It's, it's-

    30. AKAdithya Kidambi1:32:17

        People should be, people should be educated about what they have there.
24. 1:33:21 – 1:41:28

    What’s Kombucha? | Fermentation | Health Benefits

    1. NKNikhil Kamath1:33:21

       to this. Should we move to kombucha for a bit? You-- maybe you start by explaining what is kombucha, 'cause most people don't know it. In south, it's bigger than north for some reason.

    2. AKAdithya Kidambi1:33:30

       Yeah. Yeah, it is. Um, okay, very simple. It's fermented sweetened tea. Tea, black tea mostly, or green tea, which is usually sweetened, mostly by an organic source, like a sugar or a jaggery or a honey. Um, it's fermented with this culture called SCOBY, which is a symbiotic colony of bacteria and yeast, which means both bacteria and yeast have a function to play in the po- in the process of fermentation. Um, it was discovered by accident. I think, I think one of the stories is that five thousand years ago, there was this, um, Korean guy who just left, uh, tea outside, and then it had this-

    3. NKNikhil Kamath1:34:11

       Chinese guy, no?

    4. AKAdithya Kidambi1:34:12

       Yeah, multi... different stories.

    5. NKNikhil Kamath1:34:14

       Ah, I read a few stories. [laughing]

    6. AKAdithya Kidambi1:34:16

       As- A, As- Asian guy. [laughing]

    7. NKNikhil Kamath1:34:17

       Yeah?

    8. AKAdithya Kidambi1:34:18

       As- Asian guy.

    9. NKNikhil Kamath1:34:18

       And then it was called kombucha in Germany.

    10. AKAdithya Kidambi1:34:20

        And, uh, no, no, no, it was, it wa-- that, that is kvass.

    11. NKNikhil Kamath1:34:23

        Uh.

    12. AKAdithya Kidambi1:34:23

        So it was, uh, so apparently, he left this tea outside there, and then he gave it to a Japanese emperor.

    13. NKNikhil Kamath1:34:28

        Hmm.

    14. AKAdithya Kidambi1:34:29

        The emperor liked the tea, so he called that, that dude's name was Kombu.

    15. NKNikhil Kamath1:34:33

        Hmm.

    16. AKAdithya Kidambi1:34:33

        So it was Kombu's tea, kombucha.

    17. NKNikhil Kamath1:34:35

        Hmm.

    18. AKAdithya Kidambi1:34:35

        That was essentially the origin story for kombucha. Many cultures have m-- different fermented beverage. We have kanji, the Germans have kvass. Uh, so origin stories and fermented beverages keep changing. But essentially, kombucha essentially is fermented tea. It's fermented using this culture called SCOBY. Uh, there's, uh-

    19. NKNikhil Kamath1:34:55

        Can you explain what fermentation is?

    20. AKAdithya Kidambi1:34:57

        Fermentation is the process of breaking... In the most simple way, it's the process of breaking down sugars. That's fermentation.

    21. NKNikhil Kamath1:35:05

        Sugar is bad. Why is breaking down sugar good?

    22. AKAdithya Kidambi1:35:07

        Breaking down sugar is easy for your body to consume. So it'll break it into mostly organic acids and, uh, um, and basically, it's food for the bacteria, right? So the, the culture, the culture grows. So that's, that's essentially-- And it's breaking down complex sugars in a way where it makes a lot of difference in flavor, or it makes a lot of, uh, difference in health in terms of consumption.

    23. NKNikhil Kamath1:35:32

        So what you're saying, SCOBY is a bacteria?

    24. AKAdithya Kidambi1:35:34

        SCOBY is both bacteria and yeast, symbiotic culture of bacteria and yeast.

    25. NKNikhil Kamath1:35:39

        What is, what is yeast?

    26. AKAdithya Kidambi1:35:40

        Yeast is what, uh... How do I say? Yeast is what they use to puff up bread.

    27. NKNikhil Kamath1:35:46

        But what is it? Again, a bacteria?

    28. AKAdithya Kidambi1:35:48

        It's, it's, it's another, it's another, it's another live culture. It's another living thing, so to say.

    29. NKNikhil Kamath1:35:52

        So what you're saying is, okay, there's some bacteria.

    30. AKAdithya Kidambi1:35:55

        There's some bacteria, there's some yeast. Both of it have its function.
25. 1:41:28 – 1:44:01

    First Kombucha Billionaire | Difference of Flavour Palette in India and Abroad

    1. NKNikhil Kamath1:41:28

       this interesting guy, okay, online. His name is GT Dave.

    2. AKAdithya Kidambi1:41:31

       Yeah.

    3. NKNikhil Kamath1:41:32

       Apparently, he's the-

    4. AKAdithya Kidambi1:41:32

       The biggest kombucha dude. Yeah

    5. NKNikhil Kamath1:41:34

       ... biggest kombucha dude in the world, and he's the first kombucha billionaire who started brewing in his house when he was fourteen, fifteen-

    6. AKAdithya Kidambi1:41:43

       Yeah

    7. NKNikhil Kamath1:41:43

       ... and selling it, and he made this massive brand out of it.

    8. AKAdithya Kidambi1:41:47

       The only billion-dollar kombucha brand.

    9. NKNikhil Kamath1:41:49

       Yeah.

    10. MCMatt Chitharanjan1:41:49

        What's the brand? What is it called?

    11. AKAdithya Kidambi1:41:50

        GT. GT's.

    12. NKNikhil Kamath1:41:52

        That's his name also, right? GT Dave.

    13. AKAdithya Kidambi1:41:53

        It's GT Dave, yeah. It's, yeah. So GT's Kombucha is the largest. They make-- They, they started off with kombucha, did many other things, but kombucha is what they sell the most, and, uh, very different from the kombucha that we make here.

    14. NKNikhil Kamath1:42:06

        Yeah?

    15. AKAdithya Kidambi1:42:07

        In terms of... Not in terms of function, but more in terms of flavor. The kombucha that you get abroad is sour. We were just discussing this before also.

    16. NKNikhil Kamath1:42:15

        Yeah.

    17. AKAdithya Kidambi1:42:15

        The kombucha that you get in the US has a different palate. It's super sour. If you've had those kombucha-

    18. NKNikhil Kamath1:42:19

        Yeah

    19. AKAdithya Kidambi1:42:19

        ... it's a lot more sour. It's not-

    20. NKNikhil Kamath1:42:20

        But it feels like it's doing more in your body than the kombucha you get here.

    21. AKAdithya Kidambi1:42:23

        Uh, I wouldn't say it's doing more or less. Ours is more about keeping everybody happy whilst having them consume this beverage. Now, if I were to give somebody something s- that vinegar tasting, doesn't fly well, because we used to make... When we used to make kombucha earlier in the day, when we just started, that was the way to make kombucha, right? There was no tech involved, there were no machines, there was none of, there was none of, none of that. So the kombucha used to come out that way.

    22. NKNikhil Kamath1:42:48

        Mm.

    23. AKAdithya Kidambi1:42:48

        Takes were very, very low.

    24. NKNikhil Kamath1:42:49

        Yeah?

    25. AKAdithya Kidambi1:42:50

        Yeah. And then we slowly started, we slowly started focusing, and we were, we were doing tea-based kombucha, right? We were doing, we were... That's what I want to say. We were showcasing the teas around us, like, exactly like how kombuchas used to be made back in the day, but with different teas. And the flavor differentiation essentially were the different teas. Uh, things really changed for us when we made cola. Things [chuckles] really changed for us when we made ginger and blueberry-

    26. NKNikhil Kamath1:43:12

        Mm

    27. AKAdithya Kidambi1:43:12

        ... and things a little more funky and mossy and things like that. It's because that's, that's what people want also.

    28. NKNikhil Kamath1:43:19

        Mm.

    29. MCMatt Chitharanjan1:43:20

        But I think it's a journey, right? Like-

    30. AKAdithya Kidambi1:43:22

        It is
26. 1:44:01 – 1:49:24

    How Big is the Kombucha Market? | Consumption Patterns in India

    1. AKAdithya Kidambi1:44:01

       And-

    2. NKNikhil Kamath1:44:01

       How big is it?

    3. AKAdithya Kidambi1:44:02

       It's very small. It's about two hundred crores right now.

    4. NKNikhil Kamath1:44:05

       In India?

    5. AKAdithya Kidambi1:44:05

       In India.

    6. NKNikhil Kamath1:44:06

       Two hundred crores, the whole market?

    7. AKAdithya Kidambi1:44:07

       Yeah. Yeah.

    8. NKNikhil Kamath1:44:08

       Is that all?

    9. AKAdithya Kidambi1:44:09

       Yeah, it's-- that's all.

    10. NKNikhil Kamath1:44:10

        Who has market share? How much do you guys have?

    11. AKAdithya Kidambi1:44:13

        Uh, [sighs] we have a, we have a small share. I only have data from quick commerce, otherwise it's very hard to pick. On one of the quick commerce platforms, we have about thirty-two percent of the market share. Yeah. And, um-

    12. NKNikhil Kamath1:44:24

        And in the US, it's about four, five billion dollars.

    13. AKAdithya Kidambi1:44:26

        It's four, five billion dollars, yeah. And-

    14. NKNikhil Kamath1:44:28

        That sounds like potential, right?

    15. AKAdithya Kidambi1:44:30

        Yeah, there is a lot of potential. It's growing. I mean, we've been growing like crazy. It was, it was... I think it was about thirty crores in twenty twenty-one. So it's been growing. It's been growing really well. It's almost tripled, uh, so to say. And it's only growing more because on, on the, on the backside, just me being one of the small brands in a very crowded kombucha space, we've been growing five X almost every year.

    16. NKNikhil Kamath1:44:54

        So this sounds like a killer opportunity. Went from thirty crores to two hundred crores in four, five years?

    17. AKAdithya Kidambi1:44:58

        Yeah, and it's going to-- and it's definitely going to go to a billion dollars by twenty thirty-two, is what they say.

    18. NKNikhil Kamath1:45:04

        In India?

    19. AKAdithya Kidambi1:45:04

        In India.

    20. NKNikhil Kamath1:45:05

        Mm.

    21. AKAdithya Kidambi1:45:06

        Uh-

    22. NKNikhil Kamath1:45:06

        So-

    23. AKAdithya Kidambi1:45:06

        And also, it's... I think, like I said, right, consumption pattern for kombucha in India is very different. People are not drinking it for, to say, "Oh, oh, my God, I'm gonna get, like, super healthy." People know it's healthy, people know it's fizzy, so they were like: "I'm already drinking this fizz that's bad for me, I'm just gonna replace it." And I, and we achieve more success by making it more accessible. That's essentially how this category is going to be.

    24. NKNikhil Kamath1:45:30

        Accessible, you mean cheaper?

    25. AKAdithya Kidambi1:45:31

        Cheaper.

    26. NKNikhil Kamath1:45:32

        Distribution?

    27. AKAdithya Kidambi1:45:33

        Distribution, both.

    28. NKNikhil Kamath1:45:34

        How much-

    29. AKAdithya Kidambi1:45:34

        Cheaper in distribution-

    30. NKNikhil Kamath1:45:35

        How much does your kombucha cost?
27. 1:49:24 – 1:58:21

    Awareness of Kombucha as a Product | Hard Kombucha | Substituting Alcohol

    1. ABAneesh Bhasin1:49:24

       How do you, how do you explain the word to people when they first encounter it?

    2. AKAdithya Kidambi1:49:28

       And that's, so that's the problem, right?

    3. ABAneesh Bhasin1:49:29

       Like, the lower your price point goes-

    4. AKAdithya Kidambi1:49:31

       Yeah

    5. ABAneesh Bhasin1:49:32

       ... the more you're accessing people who have no clue what this is.

    6. AKAdithya Kidambi1:49:35

       Kombucha in, in, in a... So that, I think, I think that's been our learning, right? From, from, from then to now, right? Education has been sort of our biggest letdown, and education requires a lot of capital-

    7. ABAneesh Bhasin1:49:48

       Yeah

    8. AKAdithya Kidambi1:49:48

       ... and a lot of time and a lot of expertise in being able to communicate that, none of which, none of which we had. And-

    9. NKNikhil Kamath1:49:53

       But you probably have the inflection point the US did at some point, right? Naturally.

    10. AKAdithya Kidambi1:49:57

        Yes, naturally. No, but that's what's helping-

    11. NKNikhil Kamath1:49:59

        We seem to mimic the West-

    12. AKAdithya Kidambi1:50:00

        Yeah... No, but that's what's helping us right now. That's what-- That, that is the only thing that's helping us right now, right?

    13. NKNikhil Kamath1:50:05

        Mm.

    14. AKAdithya Kidambi1:50:05

        That, that culture saying kombucha-

    15. NKNikhil Kamath1:50:07

        Yeah.

    16. AKAdithya Kidambi1:50:07

        -Oh, my God, okay, it's such a billion-dollar industry. Okay, people are looking into it.

    17. NKNikhil Kamath1:50:11

        How about export for you guys?

    18. AKAdithya Kidambi1:50:12

        Huh?

    19. NKNikhil Kamath1:50:13

        How about export? We've talked about it.

    20. AKAdithya Kidambi1:50:14

        We, we have. I think, I think, uh, Middle East is seeming really juicy right now.

    21. NKNikhil Kamath1:50:19

        Yeah.

    22. AKAdithya Kidambi1:50:20

        But we're working around, uh, legislations over there, and, you know, uh, it's, it's a lot of things and all certifications-

    23. ABAneesh Bhasin1:50:26

        But you know what? In our category, logistics is expensive.

    24. AKAdithya Kidambi1:50:30

        Yeah.

    25. ABAneesh Bhasin1:50:30

        So exports-

    26. AKAdithya Kidambi1:50:31

        Making the product-

    27. ABAneesh Bhasin1:50:31

        -from that standpoint

    28. AKAdithya Kidambi1:50:32

        ... really, really, really cheap. It's not, it's not-- Like I, like I said, anybody with a bucket can make kombucha now. Uh, can you do it to be scalable? Maybe not, but you can definitely, definitely start, and then you can learn along the way.

    29. NKNikhil Kamath1:50:43

        So is there a use case where I make a alcoholic beverage like beer, which has five percent alcohol-

    30. AKAdithya Kidambi1:50:50

        Yeah
28. 1:58:21 – 2:05:47

    Craft Beverage Taxation Policies

    1. NKNikhil Kamath1:58:21

       So we're going down the same path where I'm a twenty-five-year-old girl-

    2. AKAdithya Kidambi1:58:26

       Yeah

    3. NKNikhil Kamath1:58:26

       ... but want to open a kombucha business.

    4. AKAdithya Kidambi1:58:28

       Yeah.

    5. NKNikhil Kamath1:58:29

       And you're going to eventually tell me why I should do it or not do it.

    6. AKAdithya Kidambi1:58:32

       You should totally do it, because there needs to be... I, I feel like-- So I define craft with three words, okay: authenticity, innovation, and quality. The more, the better. And, uh, that's why craft beverages in general as a segment need to have a lot more players in it, and there is money to be made. If you see, if you look at a shelf, even, say, at a 7-Eleven in Thailand, the number of options for beverages is just way too many.

    7. NKNikhil Kamath1:58:59

       Mm.

    8. AKAdithya Kidambi1:58:59

       And all of them-- And I've been, I've been, I've been going to Thailand a bunch of times over the last five years, and I see this brand repeated. It's not like I, every time I walk in, I see a different brand. It's the same brands again and again, right? But there are just at least five times more brands than there are in India, and I think we have a much larger population. We have a much bigger appetite for carbonated beverages than most of the country.

    9. NKNikhil Kamath1:59:21

       Do you think it's because we have less discretionary spend per capita, that there are lesser options?

    10. AKAdithya Kidambi1:59:28

        Maybe. Which is, which is, which is why you come back to accessibility, right?

    11. NKNikhil Kamath1:59:31

        Mm.

    12. AKAdithya Kidambi1:59:31

        With time, you have to make it cheaper for people to be able to, uh, make it a part of their daily lifestyle.

    13. NKNikhil Kamath1:59:38

        Mm.

    14. AKAdithya Kidambi1:59:38

        And that's what Coke and Pepsi have done really, really well, right? They've played with the food angle. They made sure you're- it's super accessible. They made sure their distributing, distribution is great. They made sure that even after paying forty to forty percent in tax, it's twenty bucks, twenty-five bucks-

    15. NKNikhil Kamath1:59:54

        What is this forty percent in tax?

    16. ABAneesh Bhasin1:59:55

        I really want to talk about that bit.

    17. NKNikhil Kamath1:59:56

        Yeah, yeah, tell us.

    18. ABAneesh Bhasin1:59:57

        Because out of all the enthusiasm in this space-

    19. AKAdithya Kidambi1:59:59

        No, go for it. You, you should, you should, you should say this. [clears throat]

    20. ABAneesh Bhasin2:00:01

        One caution for anyone to get into beverages is to understand taxation in India. We're taxed at forty percent, which is ridiculous. I think we're one- we're either the only country or one of the two countries that has such a rule against carbonated and sugar beverages. So if I have sugar and carbonation, I'm at forty percent. If I remove the carbonation, I'm back at twenty-eight or eighteen, depending on the product.

    21. AKAdithya Kidambi2:00:26

        Yeah.

    22. ABAneesh Bhasin2:00:26

        Or if I remove, uh, sugar, then I'm at eighteen percent. So it's a very bizarre rule because if I take a Tetra Pak of juice, that will be very harmful in terms of sugar and, you know, a lot of how our juice, packaged juice and all are. That is considered as a healthier product.

    23. NKNikhil Kamath2:00:45

        And what kind of taxation? This is on the sale value?

    24. ABAneesh Bhasin2:00:48

        Yeah, [clears throat] on, on-

    25. AKAdithya Kidambi2:00:49

        On the MRP

    26. ABAneesh Bhasin2:00:49

        ... MRP, right?

    27. AKAdithya Kidambi2:00:50

        Your MRP includes the tax.

    28. ABAneesh Bhasin2:00:51

        So forty percent is a very large amount. When we were launching Svami, that time it was eighteen percent sales tax. We assumed that everyone, your Schweppes, Pepsi, Coke, will increase their prices. Most of them didn't, they absorbed it. For us, it was a big challenge, right?

    29. NKNikhil Kamath2:01:08

        But you were at eighteen percent, it went to forty.

    30. ABAneesh Bhasin2:01:11

        When we were launching, that time it was eighteen.
29. 2:05:47 – 2:09:27

    Steps into Starting a Beverage Brand | Mossant’s Journey

    1. NKNikhil Kamath2:05:47

       to start a kombucha brand-

    2. AKAdithya Kidambi2:05:48

       Mm-hmm.

    3. NKNikhil Kamath2:05:48

       -how much money do I need?

    4. AKAdithya Kidambi2:05:51

       I started with six lakhs, so you can start with six lakhs. You have to hustle your way through.

    5. NKNikhil Kamath2:05:54

       Can you articulate the process for me?

    6. AKAdithya Kidambi2:05:55

       Okay. The first thing that we needed to do was to understand-

    7. NKNikhil Kamath2:05:58

       I want to compete with you.

    8. AKAdithya Kidambi2:06:00

       Okay. The first thing that we needed to understand was regulations and legislations, like you said, taxations and regulations. Regulation, most important, keep the alcohol below zero point five percent. You have to do that. Understand taxation of your product, depending on how you're manufacturing this product. If you, if you've got this right, you can create this brand.

    9. NKNikhil Kamath2:06:21

       Mm.

    10. AKAdithya Kidambi2:06:21

        Next, obviously, is voice, which essentially is: what is the problem that is- kombucha is solving? And for us, it was very simple. The problem that we were solving is we were giving you a better Coke, which wasn't available, which still isn't available.

    11. NKNikhil Kamath2:06:33

        Mm.

    12. AKAdithya Kidambi2:06:34

        That's the problem that we were starting with.

    13. ABAneesh Bhasin2:06:35

        Very less health benefits.

    14. AKAdithya Kidambi2:06:37

        Yeah.

    15. ABAneesh Bhasin2:06:37

        Maybe there is a-- maybe there is room for a new entrant to come in to push-

    16. NKNikhil Kamath2:06:42

        Mm

    17. ABAneesh Bhasin2:06:42

        ... health as a more objective-

    18. NKNikhil Kamath2:06:44

        Mm

    19. ABAneesh Bhasin2:06:44

        ... sort of play to do kombucha.

    20. NKNikhil Kamath2:06:47

        Mm.

    21. ABAneesh Bhasin2:06:47

        We had a much larger vision of building beverages-

    22. NKNikhil Kamath2:06:50

        Mm

    23. ABAneesh Bhasin2:06:51

        ... uh, which is why we, we, we, we kept talking about sodas and how we are the replacement. We are the next-- We are the new kid on the block, and we're the next-gen soda. Uh, but there is room for a bigger kombucha brand to come and spin that health wave and, you know, grab it by the neck and really take it forward. There is a lot of room. It can be done.

    24. NKNikhil Kamath2:07:09

        Mm.

    25. ABAneesh Bhasin2:07:10

        But your taxations, rules, and everything will be vary according, based on how you produce this product.

    26. NKNikhil Kamath2:07:14

        What he's saying, he has a point.

    27. AKAdithya Kidambi2:07:15

        Yeah.

    28. NKNikhil Kamath2:07:15

        Like, there is a new better chocolate brand called SuperYou.

    29. AKAdithya Kidambi2:07:21

        Yeah.

    30. NKNikhil Kamath2:07:21

        Ranveer Singh, the actor's brand.
30. 2:09:27 – 2:10:12

    East Asian Beverage Markets

    1. NKNikhil Kamath2:09:27

       like Japan, Korea, and all that? What are people drinking?

    2. ABAneesh Bhasin2:09:29

       Japan is so crazy that if you see how many products Suntory makes-

    3. AKAdithya Kidambi2:09:33

       Yeah, it's insane.

    4. ABAneesh Bhasin2:09:34

       Right?

    5. AKAdithya Kidambi2:09:34

       It's insane.

    6. ABAneesh Bhasin2:09:34

       And Suntory is setting up-

    7. AKAdithya Kidambi2:09:35

       Coffee

    8. ABAneesh Bhasin2:09:35

       ... shop in India now. Uh, there's non-alcoholic-

    9. NKNikhil Kamath2:09:38

       Originally was-

    10. AKAdithya Kidambi2:09:40

        Originally, yeah.

    11. ABAneesh Bhasin2:09:40

        Yeah, but they-

    12. AKAdithya Kidambi2:09:41

        Originally

    13. ABAneesh Bhasin2:09:41

        ... I think they do about three to five billion in non-alcoholic beverages.

    14. AKAdithya Kidambi2:09:45

        Yeah. Yeah, I think the largest manufacturer of RTD coffee.

    15. ABAneesh Bhasin2:09:48

        Yeah, yeah.

    16. AKAdithya Kidambi2:09:49

        In Japan.

    17. ABAneesh Bhasin2:09:49

        You look at their range, everything from hydration to energy-

    18. AKAdithya Kidambi2:09:52

        They have covered everything.

    19. ABAneesh Bhasin2:09:53

        Everything.

    20. AKAdithya Kidambi2:09:53

        Everything.

    21. ABAneesh Bhasin2:09:54

        Same with Korea.

    22. NKNikhil Kamath2:09:55

        Mm.

    23. ABAneesh Bhasin2:09:55

        There's so much innovation in beverages, so there is a lot of innovation to happen.

    24. NKNikhil Kamath2:09:59

        Mm.

    25. AKAdithya Kidambi2:09:59

        When it comes to beauty, I think Thailand is, like, up there-

    26. ABAneesh Bhasin2:10:02

        Yeah

    27. AKAdithya Kidambi2:10:02

        ... with vitamin, collagen, the number of supplements-

    28. ABAneesh Bhasin2:10:04

        Oh, I just got these collagen-

    29. AKAdithya Kidambi2:10:06

        Yeah

    30. ABAneesh Bhasin2:10:06

        ... little tubes back.
31. 2:10:12 – 2:19:12

    Building a Global Indian Beverage Brand | Bottling & Distribution

    1. RRRahul Reddy2:10:12

       say one thing, though. The conundrum that always kind of excites me and confuses me at the same time, like for your kombucha brand, Nikhil, you have a foreign ca-- kind of foreign as an unfamiliar category. We've all discussed that.

    2. NKNikhil Kamath2:10:27

       Mm.

    3. RRRahul Reddy2:10:29

       Primarily, I know you maybe have a couple of flavors that don't... Primarily, you're also talking about flavors which are largely unfamiliar. Then you're trying to drive costs down to make it more familiar, but that audience probably isn't familiar with a flavor like yuzu, right?

    4. ABAneesh Bhasin2:10:43

       Yeah.

    5. RRRahul Reddy2:10:43

       Or like hops or any of these like, these, these more for... So then it becomes-- it begs the question: Is, is creating, like, Indic flavor profiles the answer-

    6. ABAneesh Bhasin2:10:53

       Hundred percent

    7. RRRahul Reddy2:10:53

       ... at the end?

    8. AKAdithya Kidambi2:10:54

       Oh, yeah.

    9. RRRahul Reddy2:10:54

       Like, at the end.

    10. ABAneesh Bhasin2:10:55

        Most definitely. Most definitely.

    11. NKNikhil Kamath2:10:56

        So what are you thinking, flavors like?

    12. AKAdithya Kidambi2:10:57

        That's why collagen works the most.

    13. RRRahul Reddy2:10:58

        So, I don't know, jaljeera kombucha.

    14. ABAneesh Bhasin2:11:00

        Yeah, hundred percent.

    15. AKAdithya Kidambi2:11:01

        Oh, hundred percent.

    16. RRRahul Reddy2:11:01

        Right?

    17. ABAneesh Bhasin2:11:02

        Yeah.

    18. RRRahul Reddy2:11:02

        Like that's what I want Nikhil to make-

    19. ABAneesh Bhasin2:11:03

        A hundred percent

    20. RRRahul Reddy2:11:03

        ... jaljeera kombucha.

    21. ABAneesh Bhasin2:11:04

        Dude-

    22. AKAdithya Kidambi2:11:04

        Yeah

    23. ABAneesh Bhasin2:11:04

        ... think of flavors that don't have-

    24. AKAdithya Kidambi2:11:06

        Ethnic, ethnic-

    25. ABAneesh Bhasin2:11:06

        That don't need education

    26. AKAdithya Kidambi2:11:07

        ... ethnic kombucha.

    27. NKNikhil Kamath2:11:08

        And sell it even abroad.

    28. AKAdithya Kidambi2:11:09

        Yeah.

    29. NKNikhil Kamath2:11:10

        It's like why Radico is doing so well.

    30. RRRahul Reddy2:11:11

        Exactly.
32. 2:19:12 – 2:21:57

    How to Compete as a New F&B Brand

    1. NKNikhil Kamath2:19:12

       say we are all starting independent brands, you four, including me, the twenty-five-year-old. How do we get people to pick us over them? And I don't mean the rich, I mean, like, more people.

    2. AKAdithya Kidambi2:19:25

       I think, I think story-

    3. ABAneesh Bhasin2:19:26

       Branding-

    4. AKAdithya Kidambi2:19:27

       ... story will play a fair, decent price-

    5. NKNikhil Kamath2:19:28

       But if they have more marketing money, how do you compete with brands?

    6. ABAneesh Bhasin2:19:31

       I don't think it's about marketing money anymore, and, and this was my thing about a coffee shop. A lot of people have a dream, dream to open a restaurant.

    7. NKNikhil Kamath2:19:39

       Mm.

    8. ABAneesh Bhasin2:19:39

       Uh, I think at some point my dream is to open a coffee shop, and-

    9. AKAdithya Kidambi2:19:43

       You're going to work with him, I mean. [chuckles]

    10. NKNikhil Kamath2:19:44

        Yeah. [chuckles]

    11. ABAneesh Bhasin2:19:46

        I'll work with both of you, of course. Uh, but to me, the excitement there is that I today can, I think, compete with a Starbucks and offer a better experience because I understand the consumer, I understand this country and the people, that an international brand may not.

    12. NKNikhil Kamath2:20:06

        Mm.

    13. ABAneesh Bhasin2:20:06

        And they will have an agency working for them, and they'll have some market research working for them, and so much- so many other things in the system, that you actually may not really know your customer. Today, as a twenty-five-year-old, you have a fresh start. Think what's happening in your system, uh, in your ecosystem, right? If alcohol is on the lower side of things, and that's another debate and conversation to be had, what do people want to drink? People want to-... drink or consume a product that has a legit story, and beyond a point, you will see through marketing fluff.

    14. NKNikhil Kamath2:20:42

        Yeah.

    15. ABAneesh Bhasin2:20:42

        Every, every brand, and this happens on the internet right now, right? Right from a clothing brand to a underwear brand, "Most comfortable underwear ever." Everyone says the same thing.

    16. NKNikhil Kamath2:20:51

        Mm.

    17. ABAneesh Bhasin2:20:52

        "The most comfortable black T-shirt ever." Everyone will say the same thing, but at some point, your genuine storytelling and your product will have to differentiate.

    18. NKNikhil Kamath2:21:02

        If I were to start a coffee shop, after all that you have heard, what should my story be?

    19. ABAneesh Bhasin2:21:08

        I can tell you my story if I was to start a coffee shop. As much as I think that a lot of people may not care about the roaster and the farm, I would put together a very solid collection of about five, six beans on rotation. I would focus a lot more on pour-over coffees and maybe coffees on tap, like nitro coffee. I think that's a great product. You feel like you're having a Guinness, a well-made, uh, nitro brew. I would have a concise coffee menu, uh, food menu, but I would have really good music.

    20. NKNikhil Kamath2:21:48

        Mm.

    21. ABAneesh Bhasin2:21:48

        Really good music starting in the morning. If you walk into-

    22. NKNikhil Kamath2:21:53

        Like banging music, like-

    23. ABAneesh Bhasin2:21:54

        Banging music!

    24. NKNikhil Kamath2:21:55

        Yeah.

    25. ABAneesh Bhasin2:21:55

        I want, I want energy.

    26. NKNikhil Kamath2:21:56

        Yeah. Tell

33. 2:21:57 – 2:30:20

    Non-Alcoholic Industry | Svami’s Journey

    1. NKNikhil Kamath2:21:57

       us a bit about your business, Aneesh.

    2. RRRahul Reddy2:21:59

       So-

    3. NKNikhil Kamath2:21:59

       Now we know that coffee, these boys have the biggest market, which is about projected one point two billion dollars soon. Craft coffee. His market is two hundred crores. How big is your market?

    4. ABAneesh Bhasin2:22:13

       So my market is... Hey, you gave me the numbers. [chuckles] Say it again.

    5. RRRahul Reddy2:22:18

       For the, for the-

    6. ABAneesh Bhasin2:22:19

       For the non-alc market.

    7. RRRahul Reddy2:22:20

       For the non-alcoholic beverage, okay, this was, this was, uh, one thousand three hundred and seventy-six billion rupees.

    8. NKNikhil Kamath2:22:31

       It's a very complicated-

    9. ABAneesh Bhasin2:22:32

       Yeah, it's a-

    10. NKNikhil Kamath2:22:32

        Yeah. Yeah

    11. ABAneesh Bhasin2:22:32

        ... billion rupees is a little complicated.

    12. RRRahul Reddy2:22:34

        But that's the data that was shown to me by the computer.

    13. NKNikhil Kamath2:22:36

        So that's like one lakh thirty-seven thousand crores, about twenty billion?

    14. ABAneesh Bhasin2:22:42

        Yeah.

    15. NKNikhil Kamath2:22:42

        Seventeen, eighteen billion.

    16. RRRahul Reddy2:22:43

        Yeah, about, yeah, about twenty billion.

    17. NKNikhil Kamath2:22:45

        Could it be that big?

    18. ABAneesh Bhasin2:22:46

        It would be that big-

    19. RRRahul Reddy2:22:47

        Yeah, it's huge

    20. ABAneesh Bhasin2:22:48

        ... but, but, I would never-

    21. NKNikhil Kamath2:22:50

        Uh

    22. ABAneesh Bhasin2:22:50

        ... ever start for myself or advise someone to start a tonic water company.

    23. NKNikhil Kamath2:22:56

        Mm.

    24. ABAneesh Bhasin2:22:56

        Like Svami is not a tonic water company, we're a non-alcoholic product company.

    25. NKNikhil Kamath2:23:00

        But you are drinks that go with alcohol?

    26. ABAneesh Bhasin2:23:02

        Yes. The majority portfolio currently are mixers.

    27. NKNikhil Kamath2:23:05

        I love the name, by the way.

    28. ABAneesh Bhasin2:23:07

        Thank you.

    29. NKNikhil Kamath2:23:07

        Yeah, it's very cool.

    30. ABAneesh Bhasin2:23:09

        Yeah.
34. 2:30:20 – 2:31:59

    Differentiating as a Tonic & Non-Alcoholic Brand

    1. NKNikhil Kamath2:30:20

       if I want to start a tonic brand or a soda water brand, and I want to create a differentiation, what can it be?

    2. AKAdithya Kidambi2:30:27

       Flavor.

    3. NKNikhil Kamath2:30:28

       Because it's such a commodity-

    4. AKAdithya Kidambi2:30:28

       Flavor is where you create the most amount of difference.

    5. NKNikhil Kamath2:30:31

       It's, it's very minute flavor changes, right?

    6. ABAneesh Bhasin2:30:33

       No-

    7. AKAdithya Kidambi2:30:33

       I would, I would create-

    8. ABAneesh Bhasin2:30:33

       Not really

    9. AKAdithya Kidambi2:30:34

       ... I would create-

    10. ABAneesh Bhasin2:30:35

        So I-- So what we've done with Mossant is we know, we know Svami is sort of the market leader in the craft tonic sort of space. So what we've done is we've tried to do some com- something completely opposite from them to stand out, right? We've done a spicy tonic water, which is sort of the first tonic water that's catered to a tequila, not, not, not necessarily a gin. We've done a rosemary, which is a more savory. There is only one other brand which is-

    11. AKAdithya Kidambi2:30:59

        One of our first products was a rosemary product.

    12. ABAneesh Bhasin2:31:01

        Oh, really? Did you launch it?

    13. NKNikhil Kamath2:31:01

        So you guys are also competition in some ways.

    14. ABAneesh Bhasin2:31:04

        With this one segment.

    15. AKAdithya Kidambi2:31:05

        Mm. Yeah.

    16. ABAneesh Bhasin2:31:06

        Maybe-

    17. NKNikhil Kamath2:31:06

        Tonic

    18. ABAneesh Bhasin2:31:06

        ... maybe more to come in the future. [laughing] It'll be fun.

    19. AKAdithya Kidambi2:31:09

        Mm.

    20. ABAneesh Bhasin2:31:09

        Again, I will-

    21. AKAdithya Kidambi2:31:11

        Yeah

    22. ABAneesh Bhasin2:31:11

        ... happily-

    23. AKAdithya Kidambi2:31:12

        Yeah

    24. ABAneesh Bhasin2:31:12

        - promote any other homegrown brand-

    25. AKAdithya Kidambi2:31:15

        Yeah

    26. ABAneesh Bhasin2:31:15

        - as long as I can get someone to move away from a Schweppes.

    27. NKNikhil Kamath2:31:18

        No, I'm with you, like, I am the biggest proponent of homegrown brands ever.

    28. ABAneesh Bhasin2:31:22

        Yeah, yeah.

    29. NKNikhil Kamath2:31:23

        Like, I will go to the extent of paying more for an Indian brand if I could.

    30. ABAneesh Bhasin2:31:26

        Yeah, yeah. The other challenge, and this again comes down to pricing, because even your quick commerce today, right, as a new brand, they will eat you up.
35. 2:31:59 – 2:41:12

    Is Quick Commerce Sustainable in India?

    1. NKNikhil Kamath2:31:59

       Is quick commerce sustainable? I ask the same question to my friends who run restaurants. I'm re- reviewing the industry from a investor use case. It didn't work in the West. West went the way of big box retail. Uh, quick commerce had, like, a tiny spike, but it died.

    2. ABAneesh Bhasin2:32:19

       I think the moment-

    3. NKNikhil Kamath2:32:20

       I'm trying to figure out if it's gonna be different in India.

    4. AKAdithya Kidambi2:32:21

       I think it's sheer volume, no?

    5. ABAneesh Bhasin2:32:23

       But debatable.

    6. AKAdithya Kidambi2:32:25

       It's just like, it's sheer volume.

    7. ABAneesh Bhasin2:32:25

       I just think the moment quick commerce... And right now, a lot of them are behaving that way, that we will be your discovery.

    8. NKNikhil Kamath2:32:32

       Mm.

    9. ABAneesh Bhasin2:32:33

       Then they own you.

    10. NKNikhil Kamath2:32:34

        Then they'll start competing brands.

    11. ABAneesh Bhasin2:32:36

        Yeah.

    12. AKAdithya Kidambi2:32:36

        Yeah.

    13. ABAneesh Bhasin2:32:37

        So-

    14. AKAdithya Kidambi2:32:37

        They, they always do that. That's the, that's the game anyways.

    15. ABAneesh Bhasin2:32:39

        So they will come into brands that are doing well. Like, if you're an established brand, there's more reason-... for them to take you. If you're a newer brand, they totally can squeeze you, right?

    16. NKNikhil Kamath2:32:50

        And they've had the same playbook with restaurants-

    17. ABAneesh Bhasin2:32:52

        Yeah

    18. NKNikhil Kamath2:32:52

        ... and you guys have seen it.

    19. AKAdithya Kidambi2:32:53

        I think they, they will also now get into seeing which category and which product is doing well and start white labeling the same.

    20. NKNikhil Kamath2:32:59

        But Amazon has-

    21. ABAneesh Bhasin2:33:00

        Yeah

    22. NKNikhil Kamath2:33:00

        ... done that for years.

    23. ABAneesh Bhasin2:33:00

        Yeah.

    24. NKNikhil Kamath2:33:00

        And-

    25. ABAneesh Bhasin2:33:01

        So I mean-

    26. NKNikhil Kamath2:33:02

        why expect otherwise?

    27. ABAneesh Bhasin2:33:03

        Yeah.

    28. RRRahul Reddy2:33:03

        So I, I feel like slightly opposition to this. I feel like unfortunately, for us, it will very much stick around and, and dominate, because if you look at the US, which I'm familiar with, people have been ordering groceries, let's say, in the US online for, like, a decade now.

    29. NKNikhil Kamath2:33:24

        But not getting it in ten minutes.

    30. RRRahul Reddy2:33:25

        No, never. Right? But, but the behavior that they got used to and adapted to was that it was okay to order the day before, right? Whereas in India, it basically went from not really ever ordering groceries online to immediately ordering it and getting in ten minutes.

Episode duration: 3:25:44