Discovering the Journey of Launching a Homegrown Energy Drink Brand in India

Table of Contents

• Introduction
• Identifying the Market Opportunity
• Formulating a Unique Energy Drink Recipe
• Launching Hold Energy Drink
• Marketing Strategies and Growth
• Financials and Challenges
• Future Plans and Investor Pitch
• Conclusion

Introduction: The Story of Hold Energy Drink

My name is Devesh, and I'm a 20-year-old entrepreneur from Ahmednagar, India. Today, I've driven here in my car, which I use to market and brand my energy drink company, Hold Energy Drink. I dropped out of college after one year to pursue my business dreams, and after a year of research, I realized that there was a huge market for energy drinks in India, but it was dominated mostly by foreign brands.

I decided to launch a pocket-friendly, healthy, and tasty energy drink brand in India that would provide the best ingredients. That's how Hold Energy Drink was born – a brand that offers a delicious and affordable energy drink.

Identifying the Market Opportunity

After extensive research, I realized that the energy drink market in India was worth around ₹3,500 crore, with Red Bull capturing a 61% share. I noticed that these foreign brands were primarily selling a lifestyle, making people feel cool and trendy by consuming their drinks, especially on college campuses.

I saw an opportunity to create an Indian energy drink brand that would appeal to the masses with its affordability and quality ingredients.

Formulating a Unique Energy Drink Recipe

To make Hold Energy Drink stand out, we incorporated inositol, a type of carbohydrate that helps increase serotonin levels in the human body. This gives a happy feeling to the consumer and also helps women with PCOS.

We wanted to create a product that was not only delicious but also healthy and mindful of the ingredients we used. Our goal was to provide the best possible energy drink experience to our customers.

Launching Hold Energy Drink

I started Hold Energy Drink on April 23, and within the first seven days, we achieved sales of ₹1.5 lakh. In the second month, our sales grew to ₹3.5 lakh, and in the third month, we hit ₹5.2 lakh. While sales dropped to ₹3 lakh in the fourth month, we expect to close this month at around ₹6 lakh.

Initially, I worked alone to get the brand off the ground. I started selling to distributors at ₹43 per can, who then sold it to retailers at ₹48. The retailers then sold it at ₹60, leaving a gross margin of around 38% and a net margin of 25%.

Marketing Strategies and Growth

In the early days, I had a limited marketing budget, so I got creative. I gathered 25 of my friends' phone numbers and sent WhatsApp messages to over 12,000 numbers in the areas where we had distributors. This helped create awareness and drive initial sales.

As we continue to grow, I plan to focus on marketing at college festivals, which will help further spread the word about Hold Energy Drink. My goal is to make it India's leading energy drink brand.

Financials and Challenges

Starting with an initial investment of ₹5 lakh from my father, I used ₹4 lakh for inventory and ₹1 lakh for marketing expenses like car wraps. I operate as a One Person Company (OPC), which means I'm the sole shareholder for now.

One of the significant challenges I face is limited working capital. Since distributors pay me a month after receiving the products, I need to maintain a substantial inventory to keep up with sales. Expanding marketing efforts without adequate funding will be challenging.

Future Plans and Investor Pitch

To take Hold Energy Drink to the next level, I'm seeking ₹50 lakh in investment for a 5% equity stake. This funding will help me scale up marketing efforts, build a stronger team, and increase working capital to support our growth plans.

While some investors have expressed concerns about my ability to build a large business with limited resources, I remain confident in my ability to succeed. I'm eager to learn from experienced mentors and co-founders who can help me refine my marketing strategies and build a robust business model.

Conclusion

Hold Energy Drink is my passion project, and I'm committed to making it a success. While I may lack formal business experience, I have an unwavering determination and a willingness to learn from those who have walked this path before me.

With the right guidance, funding, and support, I believe Hold Energy Drink has the potential to become a leading brand in the Indian energy drink market. I'm grateful for the opportunity to share my story and look forward to continuing this journey with the help of experienced investors and mentors.

FAQ

Q: What inspired Devesh to start an energy drink business?
A: Devesh lacked interest in his studies, so he dropped out of college to start his own business. After researching, he realized the energy drink market in India was dominated by foreign brands, so he decided to launch a pocket-friendly, healthy, and tasty Indian energy drink brand.

Q: What makes Hold Energy Drink unique?
A: Hold Energy Drink is formulated with inosital, a type of carbohydrate that increases serotonin levels, making people feel happy. It is also helpful in PCOS in women. The brand aims to provide a tasty yet affordable energy drink with the best ingredients.

Q: How did Devesh market Hold Energy Drink?
A: Initially, Devesh did not have a marketing budget, so he used a WhatsApp database of 25,000 numbers to promote his brand. He also used location-based WhatsApp marketing and focused on college festivals. The marketing strategy was basic and relied heavily on his car as a mobile advertisement.

Q: What were Hold Energy Drink's sales in the initial months?
A: In the first month, the sales were 1.5 lakh. In the second month, the sales increased to 3.5 lakh. In the third month, the sales peaked at 5.2 lakh, but then dropped to 3 lakh in the fourth month.

Q: What are the financials of Hold Energy Drink?
A: Devesh sells the product to distributors at ₹43 per can, and they sell it to retailers at ₹48. The gross margin is around 38%, and the net margin is around 25%. The company operates as a One Person Company (OPC) for now.

Q: What challenges did Devesh face in building Hold Energy Drink?
A: Devesh faced rejections from 27 companies in India due to the high minimum order quantity requirements. He also struggled to convince the Sharks that his business plan was robust enough to scale Hold Energy Drink into a leading brand in India.

Q: What were the Sharks' concerns about investing in Hold Energy Drink?
A: The Sharks were skeptical about Devesh's ability to scale the business to a ₹100 crore valuation with just ₹50 lakh investment. They felt the marketing strategy was basic, and the product lacked differentiation or a unique formula. The valuation asked also seemed too high compared to the current revenue.

Q: How did Devesh respond to the Sharks' concerns?
A: Devesh remained confident and believed he could scale the business with improved marketing strategies and a co-founder's expertise. He was willing to learn from the Sharks and improve his understanding of building a successful business.

Q: What offer did Aman Gupta make to Devesh?
A: Aman Gupta offered Devesh ₹10 lakh for 10% equity at a ₹1 crore valuation, plus ₹40 lakh as debt at 12% for 2 years, with a 5% royalty on every can sold until the debt is repaid.

Q: Did Devesh accept Aman Gupta's offer?
A: The conversation ended without Devesh accepting the offer. Aman Gupta praised Devesh's hunger and jugaad but felt his marketing was too basic and the business was not yet investable.