We Sacrifice Profit Margin, But Not Quality, To Offer Competitive Price, Says Skippi

With decades of experience in the food and beverage industry, Ravi Kabra and Anuja Kabra launched an ice pop brand for the first time in India. After thouroughly studying the untapped Indian market, they carried out primary and secondary research to finalise on the product line.

However, Covid-19 pandemic badly hit their business as the production was stopped for a year. But the co-founders of Skippi did not lose hope. They redesigned the product in a more flavourful and juicier form and restarted Skippi in 2021. Subsequently, they received funding to support the business expansion. And there's no turning back.

In an interview with Bizz Buzz, Ravi Kabra said Skippi will enhance its presence in tier-2 and tier-3 cities by strengthening distribution channels and exploring new retail partnerships

What is the current status of the ice popsicle market in India?

The ice popsicle market in India is growing steadily, driven by the hot weather and increasing demand for refreshing treats. Brands are focusing on reducing sugar and using natural ingredients. With rising awareness, consumers seek products with no artificial colors or sweeteners. New flavors and fun packaging are also attracting kids and adults alike. The market is seeing more players, both established brands and new ones, offering a variety of choices. Distribution through modern retail outlets, online platforms, and local stores has made these products more accessible. Additionally, the market is being boosted by the rise of quick-commerce platforms that deliver ice pops quickly.

How do you perceive your customers’ needs and design your products?

At Skippi, we understand that our customers look for fun and convenient treats. They want products that not only taste great, but are also made with quality ingredients. Families, especially parents, care about what their kids consume, so we need to provide ice pops that are free from artificial colors and preservatives. We listen to our customers through their feedback and adapt to their preferences, like offering new flavors that excite both kids and adults. We also know that convenience matters, so our products are easy to find. Ultimately, we aim to make every Skippi product a fun and trusted choice that brings joy to our customers. By staying connected with them, we continue to evolve and ensure we meet their needs in the best way possible.

Is your product line meeting the requirements of market demand?

We offer a fun and tasty range of products that I think you'll love. Our main item is ice pops, which come in a variety of fruity and refreshing flavors. We've also got cornsticks, a crunchy snack available in different flavors. If you're in the mood for something sweet, our cream rolls are a delicious treat, combining creamy fillings with a crispy outer layer. Recently, we introduced Crazy Corn, featuring exciting flavors like Cream & Onion, Jalapeno, Lemon & Mint, and White Chocolate. Each of our products is designed to be enjoyable and unique, catering to a wide range of taste preferences.

How is Skippi standing out in the market?

We’re making a big splash in the market by offering a fun and refreshing treat that stands out for its quality and unique flavors. Unlike many competitors, we focus on natural ingredients and avoid artificial colors and sweeteners, appealing to consumers. Our vibrant branding and creative flavors, like Cream & Onion and Jalapeno, add a unique twist to traditional ice pops, making them memorable. Our success on Shark Tank India has also boosted our visibility and credibility, helping us attract more customers. Plus, our effective use of social media and engaging marketing strategies set us apart, making Skippi a popular choice for those seeking a tasty and healthier frozen treat.

How are you managing the rising input costs?

We tackle rising input costs by focusing on efficiency and smart sourcing. We regularly review our supply chain to find the best deals and ensure we're using resources wisely. Our team works hard to streamline production processes and reduce waste, which helps keep costs down. We also look for ways to innovate and improve our products without compromising quality. By staying agile and responsive to market changes, we're able to manage costs effectively while continuing to deliver great-tasting snacks to our customers.

Explain the concept of intense competition on pricing and its impact on reducing profit margins.

Intense competition on pricing in the market, like what Skippi faces, often forces brands to lower their prices to attract customers. While this strategy can drive sales and increase market share, it directly impacts profit margins. Lower prices mean reduced revenue per unit sold, which can strain profitability, especially if production costs remain high. To maintain a competitive edge, we might have to sacrifice some profit margins to offer attractive prices. This balancing act requires careful cost management and strategic pricing to ensure long-term sustainability. Although it’s challenging, staying ahead in a competitive market involves not just pricing strategies but also differentiating through quality and innovation.

What are the measures taken to reduce production costs?

To reduce production costs at Skippi, we focus on several key strategies. First, we streamline our manufacturing processes by investing in efficient machinery and technology. This helps us produce more ice pops with less waste and energy. Second, we negotiate better rates with suppliers to lower the cost of raw materials. We secure more favorable prices by buying in bulk and building strong partnerships. Third, we continuously review and optimize our supply chain to reduce transportation and storage costs. Additionally, we focus on improving labor efficiency through training and process improvements, ensuring that our team works effectively.

What is the current cost of cold-chain logistics and transportation?

The cost of cold-chain logistics and transportation is a significant aspect of our operations. Currently, maintaining the integrity of our ice pops through efficient cold-chain logistics involves substantial expenses. This includes the costs associated with refrigeration units, insulated packaging, and specialized vehicles to ensure that our products remain frozen from production to delivery. With rising fuel prices and increased demand for temperature-controlled environments, these costs have been fluctuating. We continuously monitor these expenses to optimize our logistics operations and keep our prices competitive while maintaining high-quality standards. Efficient cold-chain management is crucial for us to deliver our ice pops in perfect condition, and investing in reliable logistics solutions is a top priority for us to ensure customer satisfaction.

Where do you stand in terms of market share?

Currently, Skippi Ice Pops is the dominant leader in the ice pops market, holding more than 90 per cent of the market share. While smaller brands are emerging and creating some category awareness, it will take them a significant amount of time to reach anywhere near our position. Local push carts typically hold the remaining 10-15% of the market without any brand or quality recognition, as well as smaller local players, who have launched regional brands. Looking ahead, we are confident that we will continue to grow our market share in the coming years, further solidifying our leadership in the industry.

What is the sales volume for this year, and what growth do you anticipate for the next fiscal year?

We are looking for almost doubling our top line this year to crossing about Rs55 crore and we are anticipating by that next year, next financial year that is by March 2026, we will be touching or crossing beyond the Rs100-cr mark because there is a huge potential in the market that is awaiting us for our presence. It is just a matter of increasing our distribution across India to make it happen.

What are your future expansion plans?

We're focusing on broadening our market reach both within India and internationally. Domestically, we plan to enhance our presence in tier-2 and tier-3 cities by strengthening our distribution channels and exploring new retail partnerships. We are also investing in advanced production facilities to keep up with growing demand. Additionally, we’re working on diversifying our product line to include innovative flavors and health-conscious options. Our goal is to make Skippi a household name globally, known for quality and fun.

How much investment has been made in operations so far?

Operationally, we have raised investments from Shark Tank India and there was another Rs10-cr round, which we raised a few months back. We have been investing heavily, but predominantly the larger chunk of the funds has been going into marketing. But in terms of operations, we have increased our supply chain activity. We have added a few warehouses to our supply chain, which increases our efficiencies in supplying within the same day or at least by the next 24 hours to our customers.

What are the sources of your funding?

Our funding typically comes from the market itself, most of our customers pay us advance, that is our distributor channel partners pay us advance payments, and the rest of the funding as I mentioned came in from venture catalysts, Hyderabadi Angels, HEM Securities and Best Vantage and other investors who have supported us including Sunicon from the previous round of funding.

What is your strategy for expanding internationally?

We are looking at markets in the Middle East, Africa, the US, UK. We tend to identify very good partners who are not in a trading mindset, but rather some importers and distributors who understand the art of developing brands and typically that takes longer timelines we are patient enough because brands take a longer time to develop the awareness and we very meticulously then meet these exporters. Usually, we would travel to see their infrastructure, distribution infrastructure and the current brands that they are onboarded with themselves and if we understand that our mindset is aligned with the importing partner then we offer them the exclusive rights for that country.

Are you planning to develop country-specific product lines?

At the moment, we do not have any such plans for developing country-specific product lines. But yes, going forward, in case we see a lot of demand coming from a particular country for a particular segment of products, I think we do have the bandwidth and the know-how skill sets within our team to create products specific to the country. And who knows, the product for a specific country might be very suitable for other countries and it might help us increase our product portfolio also.