Yoga Bar was one of the first few ‘clean-ingredient’ food brands in the country.
Founded in 2014, when healthy snacking was a little-known concept in India, Yoga Bar scaled to a ₹68 Cr turnover in FY 2021-22. In January 2023, ITC Ltd. acquired 40% stake in the brand for ₹175 Cr, with further infusions planned. The brand had raised a Series A of $11.6 Mn from Elevation Capital and Fireside Ventures before its acquisition.
Suhasini Sampath, Co-founder of Yoga Bar, shares the contrarian business decisions she and her sister/Co-founder Anindita Sampath, made on their journey from founding the brand to a successful exit.
#1. Just Bars for 7 Years
In 2012, Suhasini and Anindita were living and working in the US where they discovered supermarket shelves full of clean label foods. While heading home from a yoga class, Anindita quipped that if she were to ever create such a product for India, she’d call it Yoga Bar. Suhasini liked the name so much that she trademarked it right away.
Later that year, the sisters returned to India and spent three years researching the health food space. Their first product, multigrain energy bars, was launched in 2015 and their second product, protein bars, was launched in 2018. They ventured into a new category — muesli — only in 2021. Since then, their product range has expanded to include peanut butter, oats and seed / dry-fruit mixes.
“Getting the taste right is crucial for the Indian market, no matter how healthy the ingredients are. We were in no rush to expand our categories. Instead, we focused on perfecting our early products, working with food scientists and 200+ bakers to get them right,” says Suhasini.
The first bars were made in their mother’s kitchen and sent to friends, family, and corporate connections as Diwali gifts. Encouraged by the positive response, they started selling the bars through pop-ups and kiosks at yoga centres in Bangalore. Yoga Bar’s early products were wrapped in silver foil with brand stickers. Only after they were convinced of the product-market fit and began to see traction, did they design the packaging.
The founders continue to manufacture in owned facilities and have not used contract manufacturing in order to ensure quality and consistency.
Suhasini says that they take feedback so seriously that for several years, Yoga Bar packs actually carried her number and she would take each customer call personally to gain insights. Even today, new products are launched only after an in-office taste test. The product gets a green signal only if at least 75% of Yoga Bar employees choose it over alternatives at a comparable price point.
#2. No Focus on D2C
In 2015, the e-commerce market in India, especially for food, was nascent and the Sampath sisters focused on cracking offline distribution, starting with Namdharis, a Bangalore-based supermarket chain.
The packs for the bars, designed by Lucid Design working with Yoga Bar’s in-house design team, had flat colours, prominent text, and a bright cheery aesthetic that would stand out on retail shelves.
“We arrived at an identity with a distinctive bold handwritten logo that looked like it had been drawn with a fat marker. The idea was to make it warm and inviting, yet fun and expressive. And several years later it still appears fresh and instantly recognisable.” says Amit Mirchandani, Managing Director of Lucid.
Yoga Bar continued to sell almost exclusively offline until early 2021, using its social media channels to talk about general nutritional information and build the brand. Covid provided the impetus to move online and in 2021, Suhasini’s husband Aditya joined them as co-founder and helped the brand scale on online marketplaces.
Today, their revenue is split 50:50 between offline and online (primarily marketplaces, although they do now have an online store).
Says Suhasini, “My personal belief is that selling D2C online is viable only with margins of over 70%. Food is already a low-margin business; add the cost of delivery and it’s tough to scale big by selling online.” Instead, Yoga Bar’s digital spends were focused on marketplace sales.
#3. No celeb brand ambassador, no ATL
Many young brands sign on big celebrities to increase reach quickly and gain credibility. Suhasini’s view of brand ambassadors and ATL advertising is based on the data-driven logic that is her hallmark — there is no point raising mass awareness when your availability is limited. “The ROI for ATL campaigns and celebrity endorsements isn’t good enough until your products are present in at least 40,000 stores and we currently sell in 5000 outlets,” she explains. Yoga Bar has used influencers and celebrities like Mandira Bedi for social media campaigns, but in a very limited way.
#4. Focus on Retention
In another departure from most startups, Yoga Bar has a strong emphasis on retention. They have focused on driving repeat sales, and Suhasini says their current retention rate is close to 70%.
The founding team is razor-focused on metrics. (See Suhasini’s advice for entrepreneurs below). “We have never played the valuation game,” she says, “but that doesn’t mean we are not building a large company. Having a company that outlasts us is very important — and that’s the reason for the sale to ITC. ”
Suhasini’s advice is deceptively simple—don’t underestimate the power of getting the fundamentals right, asking yourself the tough questions, and taking the sustainable route to success.
Suhasini’s Advice to Consumer Brand Founders
Distribution: With retail distributors, you get only one chance as a young brand. Don’t dump stock just to show high primary sales. Unless you generate strong secondary sales (i.e. actual customers), you won’t last long on their shelves.
Metrics: Keep a razor-sharp focus on metrics.
- Don’t use investor money to push sales through ad splurges or celebrity endorsements. Thumb rule: If X is the money you’ve raised, aim to make Revenue = 4X. This keeps investors content and you free to grow the brand at your pace.
- If revenue is increasing but it’s because you’re adding new categories, you aren’t establishing yourself in any one category. Track category-wise revenue and make sure every category is growing.
- If your Marketing ratio:Revenue ratio is greater than 30%, it implies that you are buying sales. This is not healthy profitability and will make investors wary.
Valuation: Don’t let other brands’ valuations give you FOMO. Valuations are not exits. The right exit and the future of the brand you are building will take time. Stay patient.