Hearing to Mr Yeshwanth Nag Mocherla, Founder of The ThickShake Factory as a part of Impresario series by IITJ !!

The ThickShake Factory is a Hyderabad based brand. In a session organized by IITJ, with its founder, Mr. Yeshwanth Nag Mocherla, we got to hear a lot of important things about the Entrepreneurship and Business tactics.

Here's a brief excerpt of our understanding of the session,

Mr. Mocherla said that during the COVID times, the Sales condition was terrible as the Sales went down during March, April, and May. During Pre-COVID, the offline sales which were 70%, Post - COVID, it became 30% of what it was earlier. Post-COVID, for online channels, 110% levels recovered.

In the Retail Industry, the major brands in Business are Reliance, Aditya Birla, Dominos, TATA, etc., they make up to be billion-dollar and 10 billion dollar companies.

He further said that his company was one of those which started from zero capital and raised further. At that time, only 2-3 companies made an impact.

Mr. Mocheralla shared his delight with the students and his audience that from a "Restaurant Player' they have changed this now to do some exciting stuff. During COVID, they made their online channels and the amount of work and Sales they did in the past 7 years, they are now planning and have created goals to do it in the next 15 months. They are creating multiple Brands online.

So, it would be a first of its kind Brand to have partnered with Bollywood stars. They are planning to collaborate for a fitness band with Tiger Shroff and Wowffles with Shraddha Kapoor.

Mr. Mocherla shared that they make Plant-based ice- creams and that was their USP from Day 1. So, for these Plant-based ice creams, they would partner with Mr. Ritesh Deshmukh and Mrs. Genelia Deshmukh.

Impact of COVID-

Due to COVID, they would transform from a Restaurant based company into a Food Tech company.

Talking further, he said, why would a retailer build store.

He explained that now they are shifting to online channels. Now they don't need to spend 25-30 Lakh Rupees to build up a store. The Cloud Kitchen is very less on rent as compared to stores. This is how the game is changing.

He discussed how Uber came into business 5 years back and about it's working. He further discussed how Zomato and Swiggy ask you for Discounts. He said that in the Food Business, Swiggy and Zomato give discounts to Restaurant operators to get into the system. Once they get into the system, the Aggregator earns more than the Operator in the form of Commissions apart from other pay and that's how their business works. Earlier they used to charge 10-12% Commission but now they take around 25-30% Commission.

He further said Retailing as used to be earlier has changed now and the new setup was by Mr. Kishore Biyani, CEO of the Future Group who set up the whole Modern Trade.

Mr. Mochreal explained that opportunities are great when disruption is happening. It is important to see whether you are sustaining or not in disruptive situations.

He gave his own reference of his panel discussion with @Newsx held in March 2020. He mentioned in his discussion that Post COVID, 40% of the restaurants would shut down. He made this intellectual statement with his analytics and business overview. So, he says that in the current situation we can see that 25 - 30% of restaurants are already disrupting.

So, whether you are agile enough to adapt or not, that is important.

He gave an example of his Cloud Kitchens where AI-enabled masks were worn by the Staff so that is a technology-driven approach they adopted Post COVID. Every time a staff member not using a mask, the authorities get a notification about it. Now, their company competes in Biryani and gives a tough competition to other Restaurant players in India. Biryani is the most consumed eatable in India after Pizza.

Belgian Shakes:

On being asked by one of the students who had an experience of their Belgian Shakes in Hyderabad, their Belgian Shakes having the largest popularity and gave them the majority of sales amongst all their products, to this Mr. Yeshwanth Nag explained that it is about a 20:80 ratio, their Chocolate flavor product gave them (70% of Sales including Belgian Chocolate). He talked about his specific target group (15 - 35 age group). He said that once a consumer likes something, he will like that. If a strategy is working for you, you should continue to adopt and follow that. He said that there are Brands like SUBWAY which continue to feed their customers with the same taste and strategy and that is working for them. So, they continue to do it. 

Mr. Mochrela shared their own experience that they make their own ice - creams and it's so creamy that nobody can beat it in the market. They bake their own ice - cream in their manufacturing plants and they use those ice - creams in their milkshakes.

He explained that Marketing Concept, in theory, states that in market share, we assume the demand to be 100, and then divide it into 10 and 40 and accordingly process it but in practice, you can create a demand. 

In Hyderabad which is the Biryani Capital, Yogi Adityanath just a day ago made a statement about changing its name to "Bhagyanagar". Then, we can imagine the name to be "Bhagyanagar Biryani which would not resonate. 

He said that their tough competitors in the market are "Shadowfax", "Paradise" and "Shadab" in Hyderabad including others.

So, to exist in the market and be successful, you need to be different.

Experience of working with his brother:

On being asked about his experience, Mr. Mochrela said that for the initial 2 years he did not realize that he was working with his brother who was his partner as well. Luckily that acted complimentary for them. As they both possessed Complimentary skill sets, it worked well for them. The detail-oriented operations are taken care of by his brother. This is so because they are competing with the restaurant or food chain players who are in the Hospitality industry for 20-30 years. So, they have a huge set of experiences associated with them.

So, his brother takes care of the Supply Chain Management and the speaker himself takes care of the Funding, Investors, Marketing, and strategy part. 

The speaker says that they have 250 Cloud Kitchens and they will ensure supply. So, they will create demand.

The biggest advantage of working with his brother was that they shared a 30 years bond. So, they know each other's back that whatever decision will be taken, even if they don't understand or are not convinced about it, still they have the trust factor that it would be for company's good.

So, that Trust is important for any business. It is the fundamental thing for any business partner or co-founder.

On being asked about the Franchise Model,

the speaker said that they disrupted the franchising space. 

7 Years back, 

in December, it was their first day in business and they got a franchising inquiry from Dubai and within a week they got inquiries from around the country. 

He said that it is very difficult to turn down business opportunities. 

He shared his own experience stating that there is no transparency in India.  In India, Business ethics or ethics in general are very bad.

There is no sincerity amongst people. They need constant monitoring. Like if you get a chance in the exam to cheat, they will cheat because it is the easier path.

The speaker shared that he himself fought with many people. In India, people get into euphoria and get into business for just making money and then shut it down. They don't have the patience. 

Currently, they have stopped franchising and they have franchising just if somebody wants to invest in it.

One of the audience questions put forward was that having read about their story how they started with the idea of having the same taste as that of what we get in the Belgium market, how Thick Shake Factory came into existence, the speaker responded that he is not a big fan of Swiggy. He shared about his brother, Ashwin who was initially working in the ice - cream section of Amul. 

When it was asked that they could have easily outsourced the ice- creams at that point in time, then why did the company just made their own ice - creams?

Mr. Mocherla explained that initially, they contacted "Amul", " Quality Walls" and "Vadilal: and similar brands. They went to various chefs. The output they got was not good. These brands were selling the ice -creams to "Cafe Coffee Day" as well. It was also using the same ice - cream. The quality of ice - cream was directly proportional to the output they got in the form of the Milkshakes.

In Europe and in other places, they had experienced very creamy milkshakes.

India at that time had no milkshake market. So, they went to small manufacturers.

The ice - cream manufacturers whom they went to, they observed that the ice - cream manufacturers are very protective in India. They were not allowing them inside their factories. The formula or recipe they had, nobody was going to make ice - creams for them with their formula.

So, initially, they just made the ice - creams exclusively for themselves. They had no buyers for it. They contacted a manufacturer and took a space in there where only the ice cream of their formula, was made and they offered to pay the manufacturers despite having no buyers. It took a lot of time for them to rise. It was a secret for the initial 2-3 years that they were manufacturing ice - creams also. Later they grew and scaled up their business and they became a BRAND. As long as they are continuing to build up and maintain the quality, it's working for them.

Further in the discussion,  the speaker was congratulated for attaining 100% equity. 

On being asked about the best strategy for a low budget company,  the speaker said that, for a small scale company, you can't expect much. Word of mouth marketing is important. 

Having shared their own experience, the speaker said that, for them, the "Placement of stores" was an important factor that worked. They opened their stores in the best locations in Hyderabad, Chennai, and Bangalore so that people can notice them. He said that we need to get SALES for that we need to get our basics right. We can only force a customer 1 -2 times but for the customer to return back, your product should be worthy of it. 

On being asked what approach should be followed from Market Research before diversifying, taking the reference of the recent Starbucks case in Australia, the speaker responded that D- Mart is the biggest retailer in India and it is not even present in 10 cities, more than that, Thick Sakes is present in 20 cities. 

The speaker said that before diversifying, you need to have a team to handle the growth.  He shared that they are opening up Distribution Channels. They are keeping the basics intact, changing a very less number of things. 

So, he concluded with his session by giving an example that if you are a Nestely Distributor and you are distributing a Cadbury chocolate and you are doing good in your work and somebody tells you to add one more chocolate brand to your business. So, the whole process remains the same they are just adding a new product. 

Similarly, they are adding new cuisines but the basic process remains the same.