Agastya Dalmia is adept at cutting his losses. So it shouldn’t come as a surprise that the QSR (quick service restaurant) milkshake and desserts brand Super Milk Products, which relaunched the 96-year-old brand Keventers six years ago, has emerged from the pandemic looking leaner and meaner.
“I have never been stressed about maintaining the legacy of such an old brand. There has never been any pressure from the family at least. However, I was stressed last year due to financial reasons,” says the Delhi-based CEO and co-founder, over a Zoom call.
Dalmia decided to take a long, hard look at Keventers, the dormant brand he and a college friend, Aman Arora, had revived in 2015. The 31-year-old bachelor and his team pruned the list of 215 outlets, including franchisees, last year, closing down 28. In a change of strategy, they are no longer looking at opening more outlets in metros. Instead, they plan to cater to growing demand in metros by expanding their cloud kitchen footprint.
In tier 2 and 3 cities, however, they want to develop café-like experiential outlets, so store sizes will increase from the current 100-150 sq. ft to 600-800 sq. ft. “What we have observed is, people in smaller cities are looking for destination places. I think we are in a good place now,” says Dalmia. The brand has grown 20% compared to where it was in February 2020. They are projecting turnover of ₹70 crore in 2021-22.
It has been quite a journey. But Keventers, which started out as a dairy manufacturing company in Delhi, has managed to create a retail category out of milkshakes—pioneering the use of the glass bottle and developing it as a “hangout” beverage option.
Dalmia’s grandfather, industrialist Ram Krishna Dalmia, had bought the brand in 1940 from its Swedish owner, dairy technologist Edward Keventers, who had set up a farm in Delhi’s Chanakyapuri in 1925. It started by supplying milk but diversified into milk powder, condensed milk, milkshakes and ice creams. It had even become a major supplier of milk powder and condensed milk to the army. In 1970, however, it shut down—Chanakyapuri was turning into a diplomatic enclave.
The brand was so popular, though, that an outlet in Delhi’s Connaught Place continued to sell milkshakes under that name. The family objected, but did little more till Agastya Dalmia decided to branch out and revive Keventers in a new avatar. The outlet in Connaught Place now operates under a different name.
Dalmia, an English honours graduate, a trained pianist and a Novak Djokovic fan who wanted to take up professional tennis, says it was Arora who pushed him to look at the business potential of Keventers. They started modestly in 2013, with just one outlet in the west Delhi locality of Pitampura where rents were low, selling 10 varieties of milkshakes. Within four months, however, they had to shut shop. Dalmia had been looking at the business as a “side project”, describes it as the most “brilliant” failure of his entrepreneurial career.
Not only was their appetite for risk low, everything was off: location, strategy, logo, pricing. They were serving in PVC cups, not the iconic glass bottle the brand had once been known for. The duo went back to the drawing board. In 2015, they were ready, this time choosing to open an outlet in south Delhi’s upscale Select CityWalk mall.
“We first started small because I wasn’t sure about myself, the concept or anything. We did it in a place (Pitampura) which had minimal rent, so if we failed, we wouldn’t suffer much loss. When it failed, it taught us to think about serving in glass bottles, the price, the flavours. When we decided on Select CityWalk, we were obviously nervous because the rent was high and I would lose more money. And losing money is never fun,” he says. The family pitched in with the funds.
In 2018, they decided to go beyond the 19 milkshake flavours on offer and introduce sundaes and ice cream. Last year, four kinds of smoothies entered the menu. They are now experimenting with savoury snacks, like fries and wraps, in some cities.
The decision to bring back the glass bottle—with customised sticker designs for every region—that had been synonymous with the brand in the initial days proved to be a wise one, setting them apart from others and ensuring brand recall when the bottles were re-purposed in homes. Dalmia recalls a customer even had a photograph taken with one next to the Eiffel Tower in Paris.
The strategy worked. By March 2016, Keventers had opened four more outlets in Delhi malls. This was about the time they roped in Sohrab Sitaram, a restaurateur. “At that point, we needed expertise in operations,” says Dalmia.
He now felt the time was ripe to expand via the franchise model. The inspiration came from his hair stylist at the time, Jawed Habib, who had done just that with his business. They advertised in Delhi and got an overwhelming response. “Aman had given his number to contact, and it got too much to handle. We received 300-odd requests,” says Dalmia.
They were not too choosy to begin with: They were open to any franchisee and location. Over time, though, disillusionment set in as they found several master franchisees weren’t adhering to quality controls; they even took one to court. They began training franchise owners on supply chain, quality control, marketing, hiring. “Although there is no monetary loss when a franchise store closes, there is value loss. So, over time, we have become a lot pickier with our locations,” says Dalmia.
Today, 55% of the outlets are company-owned, against 10% in the 2016-18 phase. The company-owned outlets, he believes, act as a benchmark.
Keventers, which has a presence in Dubai, Sharjah, Oman, Nepal and Kenya, is planning another 40 franchise stores in the next six months across India and the Middle East.
Clearly, the sector is on a growth path, though exact figures on the milkshake market are hard to find. One assessment by market research company IMARC says it is set to grow at a CAGR (compound annual growth rate) of 25.3% between 2021-26.
The pandemic has seen the company open up to cross-sector collaboration too. Its first move is a partnership with an omni-channel pet care brand, Zigly, in September. Keventers will handle the café in Zigly’s 8,000 sq. ft new experiential pet care centre in Delhi, where it will serve not just pet owners but also pets. “It’s the first time we are doing this, making treats for dogs and cats. But the pet industry is booming, and we wanted to cash in on it,” says Dalmia, who keeps a cat as a pet.
Over the last few years, many new brands have entered the thick-shake and desserts segment. Several have adopted the glass bottle. Dalmia, however, remains unfazed. “Imitation is the best form of flattery. You can’t really stop anyone from copying and look, competition is always going to come up. But it doesn’t get me worried because what they are doing is inadvertently growing the market. It’s just an indicator that the market is growing. Also, the market is big enough for a lot of players. It’s nowhere close to saturation point.”
I ask about a Kolkata-based frozen food and desserts company, Keventer Agro, which shares the name and has recently filed for an IPO. “We are two different entities,” he clarifies. The two have decided to “peacefully coexist”. “We came to the agreement that we would exist as Keventers, and they as Keventer. He has been around for a long time, so we don’t want to have any clash over that.”
Looking To The Future
From the beginning, Keventers has maintained a premium but affordable price range to appeal to young customers, unlike say the American brand Häagen-Dazs. Keventers milkshakes are priced at ₹149-299, while ice creams range from ₹99 for 100ml to ₹314 for a 450ml tub. Now, it’s looking at ways to keep abreast with changing attitudes to health food and beverages. So it’s looking at vegan milkshakes and options like savoury snacks.
But Dalmia draws the line at sugar substitutes. “Introducing one or two healthier options in a non-health category is something we can explore to increase our serviceable range and customer base. But our whole attempt has always been indulgence; it has never been specifically health.” One thing Dalmia is sure of: They are not going to introduce fast food items like burgers and pizzas.
They do keep working on flavours. Some are universally popular, of course: Chocolate flavours comprise about 65% of all sales. They have retained some of the classic flavours—strawberry, butterscotch and vanilla—though demand for these is limited among millennial and Gen Z customers. Dalmia’s personal favourites are peanut-butter milkshake and blueberry cheesecake ice cream.
The company is also working on eco- friendly packaging. Dalmia admits this is going to be expensive. “As a brand value, I have always wanted the brand to be sustainable. But we really have been struggling with it,” he says.
He gives the example of Keventers Ice Creamery, the ice-cream range launched in 2017. “It didn’t pick up as well. We thought of selling it separately with exclusive retail stores. But a lot of our young customers didn’t associate us with ice creams. We realised this model wouldn’t work. We integrated with the milkshake business,” he says. The ice creams come in colour artwork packaging with the brand’s mascot, Mr K, a tribute to Keventers’ Swedish founder.
They have added six ice-cream flavours this year—all in paper packaging. But another set of challenges looms. “It has been difficult to find the seal for the paper packaging. Sustainability is expensive in today’s world. It’s unfortunate and it will take a while before those things become cheaper,” says Dalmia.
Keventers has learnt to leverage the food apps Zomato and Swiggy to expand its customer base. From just 5% of their business in 2015-16, online takeaways now account for 40% of their business.
Dalmia remains humble about their success. “I don’t think there was any major study or analysis we did when we started out. All we can do is introduce a concept and see how the market likes it. In our case, the customers liked it, so I am very happy that that happened.”
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