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Home > News> Big Story > Svami's Aneesh Bhasin on taking Indian tonic water mainstream

Svami's Aneesh Bhasin on taking Indian tonic water mainstream

The co-founder of Svami talks about going up against the mammoth global corporation Schweppes, and fending off suggestions about having a coronavirus cure

Svami's co-founder Aneesh Bhasin. (Illustration by Priya Kuriyan)

Sometime in the middle of last year, when the pandemic was at its peak and most of the world had shut down, Aneesh Bhasin’s phone became a bit busier. Among rumours about several purported “cures” for the novel coronavirus floating around at the time was hydroxychloroquine. Friends and acquaintances started calling Bhasin to say he should advertise that he had a solution to the dreaded virus in hand.

His callers were mistaking hydroxychloroquine for quinine, something Bhasin’s company has plenty of. For quinine is the main ingredient in the tonic water that Svami, the beverage company Bhasin co-founded in 2018 with Rahul Mehra and Sahil Jatana, produces.

“You have no idea how many people have written to me saying you are sitting on a gold mine. I would reply politely that I would go to jail if I did any of this stuff,” Bhasin says. “Some people suggested that I would sell out on Amazon…”

Another reason for the misunderstanding, perhaps, was tonic water itself, which was created by British soldiers in India sometime in the early 1800s, as a cure for malaria—they mixed gin with quinine, sugar and water. That accidental “discovery” became gin and tonic, a quintessential British drink now seeing a revival globally.

While Bhasin did not sell his product as a medicinal solution to the virus, his company did come out of the pandemic relatively unscathed. In the pre-covid-19 era, he says, about 80% of their sales would come from bars and restaurants; now, 90% of it is through retail. With eateries closed for a large part of 2020, tipplers got their fix of this favourite summer drink at home.

“Even though there was demand from retail, our distributors were out of stock and borders were shut, so the initial few months were tough,” says the 35-year-old in a Zoom call from Jodhpur, Rajasthan, where he is doing a “bit of Svami stuff”.

“We did not do our summer launches at all (last year). Home consumption became the trend, which I always hoped for. We are building an FMCG brand—so in three years, retail would have been more revenue. That accelerated superfast.”

The bearded Bhasin, who is dressed in a dark T-shirt with the afternoon light filtering in through the window blinds behind him, has had a fairly off-beat career trajectory. Since his father was in the Armed Forces, the former lifestyle and portrait photographer studied in 14 schools in different cities, and started photography when in class X. In two years, the hobby morphed into a profession and he decided against going to college to focus on shooting.

As a photographer, he travelled a lot, but when he was commissioned by the Confederation of Indian Alcoholic Beverage Companies to photograph a book on the Indian alcohol industry, it gave him exposure to every wine maker and vineyard in the country. With the Indian wine industry expected to boom, Bhasin started a wine app, Hipcask, in 2012, to compile all wine-related information in one place. Hipcask, which he started with Shiladitya Mukhopadhyaya and ran till 2017, was his introduction to the business of beverages.

Bhasin’s connections with bar owners put him in touch with Mehra, opening up the gateway to his next venture. Mehra, a co-founder of Gateway Brewing Company and then of Stranger & Sons gin, and Jatana, Bhasin’s brother-in-law, realised that there didn’t seem to be any modern Indian aerated beverage.

Svami launched less than three years ago with tonic water because that was the easiest, the “lowest hanging fruit that would be a differentiator” among non-alcoholic beverages. This was a time when the global gin trend was picking up in India, with Greater Than gin from Nao Spirits launching from Delhi, and it seemed the right time to introduce gin’s most favoured mixer companion.

The Svami partners decided to create their own recipe for tonic so they could exercise quality control at a granular level. It took them six months to source the right quinine from Congo. “It was more complex than we anticipated. It was all done at home, with home-grown equipment to carbonate and play with,” says Bhasin.

He admits that some of Svami’s inspiration came from the British brand Fever-Tree, a driving force in building this category from the mid-2000s—it helped revitalise gin globally and made it more trendy. “I have mad respect for what they have done,” says Bhasin. “One big takeaway has been that don’t only build a tonic water brand. As the market gets more crowded, you lose on sales.”

I got into this because I love drinks, love G&T. But in our circles, people are drinking less. We have seen that with Gen Z too.

Initially, it helped that Svami’s local competitors, O’Cean fruit water from Narang Group and Catch by DS Group, had not built a consumer-facing brand. More recently, though, newcomers like Bengal Bay, Sepoy & Co.—both of which launched soon after Svami—and Jade Forest have joined the race to dominate a niche market led so far by Schweppes. In late 2019, Svami raised fresh investment of 7.5 crore to shore up its marketing efforts.

Today the brand is also available in Singapore and Hong Kong, showcase markets in Asia that everyone in the food and beverage field looks at. Since the launch in December in Singapore, Svami has sent its second shipment to that country. Hong Kong has been slower to take off, with protests and pandemic taking a toll.

Over the last two-and-a-half years, Svami has added a host of beverages to its shelf, including flavoured tonic water and ginger ale. During the lockdown, it launched a 3 cal tonic water—it became one of their largest sellers online—non-alcoholic rum and cola, gin and tonic.

“I got into this because I love drinks, love G&T. But in our circles people are drinking less. We have seen that with Gen Z too. We were hearing about this from Europe four-five years back. We thought that would not be practical in India but we are seeing that.” Yet, he says, the options were limited to cola, Red Bull and packaged juice for those who did not drink alcohol. “The idea is to create something more complex and give you a different taste profile.”

Svami’s tonic differs from that sold by market leader Schweppes, a more than 200-year-old multinational. It has almost half the sugar but costs more ( 50 for a 300ml can of Schweppes versus 85 for a 200ml bottle of Svami). The question of price is one that comes up often. “People would say you are Indian and smaller, why aren’t you cheaper? We cannot match the economics of scale of the biggest beverage company in the world,” says Bhasin, who has a team of 50—manufacturing has the leanest team, sales the biggest head count.

Their production facility in Bhiwandi, Maharashtra, has a capacity of about 40,000 cases a month but they are doing far less currently.

They still hold their place in the market, he says, because craft offers better quality and “home-grown” is hip. “I still don’t think Indian wines are cool but Indian beers are, as well as Indian craft spirits and mixers. People want to support Indian brands for sure,” says Bhasin.

What the brand has done is make the tonic more visible and mainstream. Available in supermarkets, in a trendy, small bottle, it gained a first- mover advantage. In bars, customers would ask for it, unlike earlier, when they would mostly be indifferent to the mixer.

Bhasin’s pictures on social media—built as a combination of his past as a photographer and his present as an entrepreneur promoting his brand—make his followers assume he has this dream job. “They think I drink and have fun all day long,” Bhasin says, laughing. “They don’t realise how much time goes on Excels, investor and team calls. None of that is on Instagram, right? If you ask someone who knows me off Insta, he would say I just drink and smoke cigars.”

The other perception he is dealing with is that it’s easy to do this—start a lifestyle beverage company. He gets calls and messages “twice a month” saying someone wants to start a tonic water company and how much would it cost?

Since it’s a niche market, tonic can grow only as much as gin does. “It’s not wise to assume people will drink tonic with too many other things. I don’t think you can build a 500-1,000 crore company on tonics itself,” Bhasin says. He adds that he dismisses questions on starting a tonic water brand because everything about the Indian entrepreneurship space is stressful—running a firm, raising money—and it gets worse as the company grows. “I wish people would talk about that a bit more,” he notes. “On the surface, it looks super rosy and nice but it is stressful…”

Whenever he gets a little time, he relaxes with a cigar and watches YouTube tech videos of things he will never buy. He has just started learning skateboarding; he’s just one fall old. Like most of the team at Svami, he is a “sneakerhead”, which fits well into the image of a lifestyle company co-founder. He owns 30 pairs, with the Adidas ZX 2K and Air Jordan All Star 2021 being his current favourites.

His ambition is for Svami to be the go-to beverage, apart from a cola, for young Indians. He feels nothing will replace a Coke, but he wants to hold on to that thought at least. It may not be unattainable yet: Bhasin and his partners did build a beverage brand from scratch, all in-house.

Arun Janardhan is a Mumbai-based journalist who covers sports, business leaders and lifestyle.

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