Adding a fruity flavor to the business is all it took for turning around a family’s fortunes
Vol 7 | Issue 49
What’s truly special about Pabrai’s Fresh and Naturelle Ice Cream – besides being tried and tasted by the likes of Hillary Clinton and Virat Kohli – is that it symbolises rebirth.
Rising from the ashes to become one of the country’s leading food start-ups and franchises, Pabrai’s now has a turnover of Rs 12 crore in just eight years.
When the family business suffered huge losses, Kunal Pabrai quit his job and returned to Kolkata to launch Pabrai’s Fresh and Naturelle Ice Cream whose turnover has touched Rs 12 crore in just eight years (Photos: Monirul Islam Mullick)
And the credit for this turnaround goes to Kunal Pabrai, 31, whose entrepreneurial strategies bore fruit – literally.
Kunal well remembers how his family was in a deep crisis when Tulika Ice Cream (named after his mother), which his father had painstakingly built into a mass-market brand, was facing a shutdown in 2007.
Labour issues coupled with its market being poached by other brands made the family run into a personal debt of over Rs 30 lakh.
“I was working as an analyst with Ernst and Young in Bangalore, but had to return to Kolkata as my father needed me desperately,” says Kunal, at his home that also doubles up as the company’s HQ at Ballygunge, a tony south Kolkata locality.
Then just 22, Kunal, with his family, mulled over starting afresh. “We were cash-strapped,” he says, “and what we knew best was how to make ice-creams.”
Kunal, along with his father Anuvrat (now 58) and younger brother Nishant (now 27), came up collectively with the idea of fruit ice-creams made entirely from natural ingredients, without the use of artificial flavours or colours.
Repurposing their knowledge and skills set to a new target base, it was a perfect way as Kunal says to “cater to our unique strengths and technical expertise and gear up for expansion both in India and internationally.”
They had all of Rs three lakh for seed capital.“Our old plant at Thakurpukur, in south-west Kolkata, was shut and we needed a new plant,” says Kunal.
“Luckily, we came in contact with the owner of a local ice-cream brand who was willing to hand over his sick unit in Tollygunge in south Kolkata to us, provided we kept on his four employees.”
Kunal with his mother Tulika, father and Pabrai's CEO Anuvrat Pabrai (third from left) and brother Nishant
The Pabrais agreed – and they never looked back.
Their product was unique: Fresh and Naturelle makes 100% natural ice creams and among the over 50 varieties of ice creams there are flavours ranging from the ordinary such as vanilla and chocolate to the extraordinary such as orange vanilla, black sesame, wasabi and nalen gur (date molasses).
Pabrai's offers over 50 varieties of ice creams with flavours ranging from the ordinary such as vanilla and chocolate to the extraordinary such as orange vanilla, black sesame, wasabi and nalen gur
Having burnt their hands earlier with creditors not paying up, they laid down a strict no-discount, no-credit policy. “We felt that small margin of profit was better than to suffer losses due to credit, as had happened with Tulika,” says Pabrai’s CEO Anuvrat Pabrai.
Their first outlet came up through an informal arrangement with Floriana Restaurant on Russell Street in 2008. “It was a semi win-win situation for us as it put our brand out into the market place,” says Kunal.
Nishant Pabrai, who was doing a hotel management course when he joined the company in 2008, says that they already had some good connections in the ‘horeca’ (hotels, restaurants, caterers) sector.
Both the brothers, Kunal (right) and Nishant, are involved in the business
“We initially tied up with big hospitality brands to build institutional clients and volumes before venturing into retail,” he says.
The first retail parlour came up in 2009 at a counter of a mall in Kolkata. “It was a small parlour of around 150 sq feet and we didn’t charge anything for the franchise as the cost for the set-up was paid by its owner,” says Kunal.
Slowly but surely, they began to consolidate. Over the years, the franchise fee rose from rupees 50,000, through 2 lakh, to its current 3.5 lakh for three years – renewable at only 10 percent of the fee.
In the future, they are looking at increasing the fee, depending on whether the franchise sells ice cream or Pabrai’s multiple products, including thick shakes, and gourmet coffees and teas, which they are planning to launch in six months to a year.
Pabrai’s currently has 25 parlours in 10 cities of the country including Delhi, Mumbai, Hyderabad and Chennai.
“We plan to take the count to 31 parlours in more cities by the end of this year, including in Vijaywada, Raipur and Pune,” says Kunal.
The Pabrais are already dreaming big and building bigger. When they first started the franchise model, one out of three franchises would shut down in a year. But continuous strengthening of systems and guidance of franchisees to be profitable has brought that rate down to a commendable 5 per cent.
“We are also planning to re-start our old Thakurpukur plant as currently we produce around 15,000-20,000 litres of ice-cream every month and want to increase our production, the number of franchises and expand to foreign shores," says Kunal.
A partnership firm, under their holding company K N & Co, they may restructure in the future to include private equity.
Pabrai’s ice cream parlours are located in 10 cities of the country including Delhi, Mumbai, Hyderabad and Chennai
Apart from them, there is another member of the family, who is equally involved in the business, the female member of the family, Tulika Pabrai (60), whom Kunal lovingly refers to as the chief accountant of Pabrai’s.
“We cannot take even a paisa without her permission!” he chuckles.
The struggle has been truly fruitful. With determination, vision and an obsession with quality, Pabrai’s has proved that once you hit rock bottom, the only way to go is up.
This Article is Part of the 'Amazing Entrepreneurs' Series
More Amazing Entrepreneurs
P C Mustafa, CEO, iD Fresh Food