In conversation with Rahul Agarwal, CEO, Organic Harvest, who talks about his brand and its future expansion plans.
‘Going natural’ and ‘going organic’ is the new beauty mantra today. However, not many are aware that misreading both as same or considering them as interchangeable labels, do not do justice to either of them. A product can be natural and organic, but not all natural products are organic, or even 100 percent natural. Organic products are made of 95 percent or more of organic ingredients derived from plant sources. All of these ingredients are grown without pesticides, bioengineered genes or petroleum-based fertilizers, which could be toxic to the environment. While many natural skincare products falsely claim to be organic, we rounded up on one of India’s homegrown organic beauty brand which offers an entire range of organic beauty care products. The brand uses materials that are certified by global organizations like EcoCert, OneCert and Natrue. The certification is evidence that the raw materials used for manufacturing Organic Harvest products are derived from plants that have been grown without chemical fertilizers, herbicides and pesticides. We talk to Rahul Agarwal, CEO, Organic Harvest, about the brand, its expansion strategies and the overall organic skincare industry, among other things.
Tell us about the brand, its inception and journey so far.
We started the research on already available products in the market and gauge the gap that exists for the organic beauty products. After a detailed and thorough research, we found out that there is not a single brand that specializes in organic beauty products offering a complete range of organic personal care. Although the personal care industry is flooded with domestic and international players vying for the market share, there is no brand in the organic personal care segment, and we are filling this gap with our quality products. Apart from the excellent quality of our products, the competitive pricing have resulted in a steady increase.
When we launched our products in 2013, we were discouraged by stalwarts of the industry, but we knew one thing, that if we could make good quality products, which are reasonably priced, there will always be a market for them. And that’s how our journey started. Meanwhile, organic skincare segment has emerged dominant in the market. It is said that 60 percent of the product that you apply on your skin goes inside your body. Hence we must use what is healthy and organically grown. The increasing demand witnessed in the segment is mainly attributed to the rising consumer awareness regarding the side-effects of synthetic and chemically treated personal care products.
Tell us about your product offerings and your target consumers.
We have a wide range of products for every customer’s need. The brand offers vast range of cleansers, sunscreens, toners, shower gels, shampoos, conditioners, treatment creams and serums, facial kits, lip balms to name a few. Some of the best-selling products of Organic Harvest include 3-in-1 face wash, exfoliating face scrub, sunscreen SPF 60 and anti-pigmentation cream.
Apart from this, the brand also has a wide range of essential oils which very few brands in the industry offer. With over 24 varieties of essential oils, the range includes lavender, lemon grass, rosemary, bergamot and so on.
Our consumers are someone who believe in preserving the nature and does not mind going against the herd. They are conscious of what they are using and are aware of the harmful effects of using chemicals and toxins.
Tell us about your market presence both in India and globally.
Organic Harvest is currently available in 5,000 outlets and we plan to increase the presence to 1,00,000 in India within a span of 2-3 years. We are exporting our products to 3 countries. Also, in terms of our exclusive brand outlets, currently we have 12 EBOs and plan to have 50 by 2020. We have recently also started our TVC campaign to further increase our visibility and have a top of the mind recall with the target audiences.
Internationally, we debuted in the UAE market last year and have received a tremendous response from the consumers. Organic Harvest is already present in Bangladesh and Nepal with its extensive range of organic beauty products.
Introduce us with your new collection. Also, how is this collection different from others and what’s so special about the same?
We aim to continuously upgrade our product portfolio with new launches. Recently, we launched Organic Harvest’s facial kit as the entry into new product vertical of facial range. ‘Organic Harvest 30 Minutes Makeover’ helps you achieve quick and desired results at the convenience of your home.
What is your average ticket size? Which months in the year bring in maximum sales?
Our average ticket size is Rs.600. Talking about the most busy months, October, November and December brings in maximum sales to Organic Harvest.
What is the price range of products at Organic Harvest?
Our product range starts from Rs.199 and goes up to Rs.1,995.
Tell us about your manufacturing units. Also, where do you source organic ingredients from for your products?
Our products are manufactured at our own facility located in Parwanoo and Baddi in Himachal Pradesh. Most of the raw materials we use in our products are certified by global organizations like EcoCert, OneCert and Natrue and these certification is evidence that the raw materials used for manufacturing Organic Harvest products are derived from plants that have been grown without chemical fertilizers, herbicides and pesticides. Our ingredients are mostly imported from countries like USA, Brazil, France, Switzerland, etc.
Tell us about your marketing and promotion strategies for the brand. What percentage of the annual revenue goes into marketing, etc.?
We believe in direct connect with the consumers, so all our promotion activities revolve around this premise. We employ highly trained beauty advisors, who make one-on-one interaction with the consumers and provide them knowledge about our products. We have more than 600 beauty advisors on our roll. We also believe that BTL marketing activities are a proficient and cost-effective means for focusing on a target audience and a particular gathering. It is a typical method to provide look and feel of products to the end users.
25 percent of our annual revenue is spent on marketing activities across online and offline mediums. The activities we undertake are in-store branding and promotion, contest with media channels like magazines, their online channels and authored articles. Events platform is another channel which we undertake to reach out to our target audience. For example, we hosted a beauty weekend with Cosmopolitan India Magazine to reach out to city influencers.
What makes Organic Harvest different from other brands in the segment? What is the brand’s USP?
Organic Harvest offers an array of products that are currently unique to the Indian consumer market. We are one of the few brands which offer wide variety of organic personal care products. Our brand embraces the organic power of plants and its botanical extracts in abundance combined with organic and natural ingredients.
The raw materials that are used are certified by global organizations like EcoCert, OneCert and Natrue. Every product is carefully conceived using eco-friendly practices and going the extra miles of being respectful to the earth, that’s what make us different and keeps us ahead of the competition.
How is Organic Harvest doing in terms of raising funds for further expansion? Also, tell us about you compound annual growth rate over last 3 financial years.
The brand is currently self-funded and we do not have any plans to raise funds. We have been growing at CAGR of more than 100 percent from last three financial years.
How is the current situation of market for organic skincare and beauty products in India as well as abroad?
Today, the outlook of the customer around the world is changing and a significant percentage of people are switching to products that are better for their wellbeing. We see a huge potential in this category with products that are natural and efficient.
In India, the market size of beauty cosmetics and grooming is expected to touch $35 billion by 2035 from the current level of $6.5 billion. Further, a survey carried out by ASSOCHAM reveals that the major factors behind the preference for personal care products include the words such as ‘natural’, ‘organic’, ‘botanical’, ‘free from’ harsh chemical and even ‘religious compliance’.
What are your plans for expansion in terms of newer markets and also in terms of new product innovation or category expansion?
Organic Harvest is currently available in 5,000 outlets and we plan to increase the presence to 15,000 in India within a span of one year. We are exporting our products to 3 countries and in the forthcoming year, we are planning to increase the number to 10. Also, in terms of our exclusive brand outlets, currently we have 6 EBOs and plan to have 10 in a span of one year. Internationally, we have recently debuted in the UAE market. Organic Harvest is already present in Bangladesh and Nepal with its extensive range of organic beauty products. The brand is targeting a tremendous growth and is poised to enter in the GCC countries – the Kingdom of Saudi Arabia, Sultanate of Oman, Kuwait and Qatar next month followed by Singapore, Malaysia and Indonesia in the South East by the next quarter.
We believe in gaining momentum rapidly and expanding our customer base gradually. We want to adopt emerging trend as a way to better engage its audience. With expanding customer base, new channels for users to discover inspiration, modern beauty brands must continue to operate differently, particularly when targeting younger generations.
We are continuously increasing our product portfolio as per the demand of the consumers. We plan to launch 8-10 new products in next one year.
Do you think franchise is a viable model for expansion? What are your plans to expand through this model?
Franchising your business can be faster than opening branches. However, not all businesses are suitable for franchising. Our primary sales come from general trade and we believe franchise is not an option for us.