'We are on track to achieving a target of $250 mn revenue by March 2022'
Darpan Sanghvi, Group Founder & CEO, Good Glamm Group & Rahul Agarwal, CEO, Organic Harvest, tell us about the synergies the partnership brings and the road ahead
Good Glamm Group, the content-to-commerce conglomerate, recently acquired a majority stake in Organic Harvest, a ECOCERT certified Beauty and Personal care brand. This marked the entry of Good Glamm Group in the Organic BPC (Beauty & Personal Care category) and the company invested a further Rs 75 crore in growing the brand.
The foundation for the group was laid in August 2020, when MyGlamm acquired POPxo & Plixxo. In September 2021, the Good Glamm Group, a digital FMCG conglomerate built on its content to commerce strategy, was formalised. Since then the Good Glamm Group has been on a shopping spree and acquired The Moms Co, Scoopwhoop, St. Botanica, MissMalini Entertainment, Winkl & Vidooly and invested in Sirona Hygiene.
In January 2022, Plixxo, MissMalini, Winkl and Vidooly were spun off from Good Glamm Group to form the Good Creator Co. In conversation with exchange4media, Darpan Sanghvi, Group Founder & CEO, Good Glamm Group and Rahul Agarwal, CEO, Organic Harvest, tell us about the synergies this partnership brings and the road ahead for Organic Harvest and the Good Glamm Group.
Excerpts from the interview:
How does Organic Harvest fit in the larger scheme of things for the Good Glamm Group?
Darpan Sanghvi: Organic Harvest has the largest portfolio of organic beauty personal care products in India. The Naturals category is the largest category within the beauty and personal care segment in India and we were looking to enter this space as we believe organic is the future. Currently, organic beauty is a small but fast-growing market that requires consumer education.
Rahul Agarwal has built an amazing brand Organic Harvest and this was a great opportunity for us to enter the organic space. The second synergy was that Organic Harvest has predominantly been an offline brand with around 25,000 to 30,000 points of sale (POS). The Good Glamm Group has about 30,000 POS and with us coming together, collectively now we have 50,000 points of sale. The other brands in our group can leverage Organic Harvest’s offline distribution. On the other hand, Organic Harvest can use the content-to-commerce engine of the Good Glamm Group to quickly scale online.
Rahul Agarwal: Organic Harvest has been in the market for nine years and traditional offline face-to-face distribution is in our DNA. By joining hands with The Good Glamm Group, we now have the massive reach that the group brings to the table, in terms of the content platforms as well as the influencers and then converting that communication into e-commerce with the help of D2C marketplaces. This deal was a no-brainer. We took the decision in a span of 30 minutes as both of us saw this to be a natural fit.
How is your vision and goal aligned to accelerate the company's presence in India and globally?
Rahul Agarwal: As mentioned, we are currently present in close to 30,000 outlets in India. Globally, we are present in 10 countries, of which we have physical distribution in seven countries, i.e. six in GCC (Gulf Cooperation Council) and Nepal and we are present in the US, UK, Canada through online distribution. As we expand globally, we have the content-to-commerce playbook template used in the Indian market ready which we are trying to replicate in the global market. The same synergy will help us in connecting to the global consumers.
Why didn't Organic Harvest look at the digital space earlier?
Rahul Agarwal: Traditionally consumer brands were built offline. It's only in the last five years that communication with the consumers increased online and brands started getting built in the digital world. With changing times, especially post-Covid the need of the hour is to have an omnichannel presence. Having only an online or only offline presence will not work as in the future the journey of the consumer may start from online and end offline and vice versa as well. That's why we are looking at being a brand with an omnichannel presence.
What are your growth projections?
Rahul Agarwal: We are currently at about Rs 80 crore run rate and in the next 15 months, we want to reach a run rate of Rs 250 crore. In the next three years, we aim to achieve a run rate between Rs 500-700 crore. I believe this is something that is achievable when we are talking about the massive reach the group brings to the table, both in terms of offline and online.
Darpan Sanghvi: The Naturals category is by far the largest category in the beauty personal care space in India. Also, we have a high elasticity in how we can extend the brand, i.e. it can go across skin, hair, body, etc. We can focus on several categories within BPC because the customer benefit is the product being organic, organic hair and skin products. That's why we believe even within the portfolio that Organic Harvest is one of the highest potential brands in terms of scale. We believe this can become a $100 million brand in the next three years.
Rahul Agarwal: The idea is to replace the chemical-laden products which consumers are using with our organic offerings. We want to bring the consumers to the top end of being green and start using the organic products from our brand.
You have mentioned educating the consumers about organic. How is your marketing strategy going to evolve now going ahead?
Rahul Agarwal: With the massive digital reach, both in terms of influencers as well as the content platform that we have, digital will be the strategy for us to communicate with the consumers in the coming three to six months. However, in the medium term as the reach of the brand increases in the offline world to maybe 100,000 outlets, then we will also look at the traditional mediums.
Darpan Sanghvi: Good Creator Co. has about one and a half million influencers. If you see consumers today, their discovery, validation, and education are happening on social media through influencers. Among the first things that Rahul and I spoke about was educating consumers about organic as they are misled between herbal, natural, etc and the lack of standardization. That's where we feel that the whole creator-generated content can come into play. Today, the group posts over 50,000 influencer-generated content every month. Now, we can hopefully add another 10,000-20,000 more posts for Organic Harvest. That will be a huge education channel and then it will be topped off by traditional ATL but the digital piece is going to be massive for education.
Looking at the overall group, how are things panning out in terms of achieving your target of $250 million revenue by March 2022?
Darpan Sanghvi: Hopefully, we will beat it. We are well on track for the same, and the goal is to substantially beat it. We keep our fingers crossed.
With the acquisition of D2C brands like Moms & Co., St. Botanica & Sirona Hygiene, what is the strategy?
Darpan Sanghvi: The strategy is clear. We understood content-to-commerce and have 150 million active users through our content platforms. We were able to engage with them through cosmetics, but the conversations were only around our first brand MyGlamm. That business scaled to 400,000 new customers a month and a $100 million revenue run rate. We realised we had four and a half billion monthly Impressions through our content platforms but were only able to insert the product into 100 million conversations because we only offered makeup. We then looked at all the categories within BPC that we thought had a great opportunity to be inserted into content - organic, hygiene, skin care, baby care and hopefully soon, we'll have a men's care category coming in as well.
The strategy behind these acquisitions is that as a company, you can't go and build five brands, it's not possible because each brand has a very unique DNA. As a company, you have a certain DNA and we started with cosmetics. However, I have zero credibility to create hygiene or an organic brand which is where we are able to partner with brands that have scaled up to Rs 70 -100 crore in revenue, and then plug them into the engine of the group and take the total revenues upwards over a couple of years, that becomes a very exciting proposition. That's how we went about our acquisition strategy, which is identifying the correct white spaces in the BPC category where we can’t play as MyGlamm, but where we think there is a large opportunity and where we feel they can really benefit for our content to commerce strategy.
We have set very clear and aggressive targets for each brand in the portfolio. What are the challenges you foresee in bringing together everything?
Darpan Sanghvi: The first challenge that I am very cognizant of is, the coming together of different companies, cultures and people. We have a very clear philosophy on how we partner, we keep everyone extremely independent. Each company’s founders are their own boss and all the companies have got their primary capital upfront. They all have got $10-15 million, which means the founders have the agility to grow their business the way they think is appropriate. We ensured that the founders have complete freedom, agility and nothing changes for the founders and their teams. That’s very important to us as people are the key piece in all of this.
There is no macro risk as the BPC category is exploding, We have got great brands who had great proof of concept and it's all about execution to scale them up. The biggest thing is ensuring that I am able to give all our founders what they need while ensuring that they are completely agile, have the capital and resources to execute and achieve. The success of Mom’s Co or Organic Harvest is the success of the Good Glamm Group, We are all equally aligned on the incentivization as well. Now managing people and execution is the biggest challenge that we have to stay on top and that's what we're focused on.
Rahul Agarwal: Adding to Darpan’s point, along with agility what comes with being a part of a bigger group is the financial muscle. We have got best of both worlds; we continue to work as a startup, continue to be flexible and agile but at the same time because the group is big we have the financial muscle to better negotiate with our channel partners, vendors and reach out to our consumers in a massive way.
You mentioned the men's grooming space. So when do we hear about your next investment/acquisition?
Darpan Sanghvi: We’ll be able to give some news on this soon, possibly in this quarter.
Will the future growth be organic or inorganic?
Darpan Sanghvi: Our growth has been 50% organic and 50%, inorganic. This year everything that we have invested in or acquired, we intend to grow by 3x. Whatever was inorganic will now be organic growth. At the same time, if there are opportunities for us in white spaces in the BPC categories that we want to play, such as men's grooming and other categories, you will see us going for inorganic opportunities. Our goal is to achieve th market leadership position in the categories we operate in.
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