Rakyan Beverages Pvt. Ltd, the maker of organic cold-pressed juices sold under the brand RAW Pressery, has raised close to $4.5 million in series B funding from Sequoia Capital, Saama Capital Management Ltd and DSG Consumer Partners.
The investment is an endorsement of potential demand for cold-pressed beverages from urban households in the country, said founder Anuj Rakyan.
Started in 2013 by the former marketer as an experiment to fill the gaps in India’s health beverages market, RAW Pressery has become a fad among fitness enthusiasts who started consuming the cold-pressed apple, beetroot, ginger, carrot and lemon juices as detox drinks.
Rakyan will use the funds to expand capacity and launch a range of low-priced beverages and smoothies.
“Over the next three years, you’re going to see Raw Pressery become a sort of lifestyle brand,” said Rakyan, who is managing director of the company, outlining his ambition to be a clean-label food and beverage company.
Rakyan, which has positioned RAW Pressery as an upmarket product, plans to expand its consumer base with new products like smoothies, cold soups and more juices priced between Rs.50 and Rs.150 per bottle/pack.
Rakyan will also use the investment to more than quadruple distribution to 1,500 outlets and set up a modern cold-pressed juice facility that will help it serve another six markets. It now sells in six cities, including Mumbai and Bengaluru.
Cold-pressed juices burst on the scene after companies and celebrities in the US endorsed the benefits of these drinks, made using HPP, or high-pressure processing, technology. The process entails applying high pressure on fruits and vegetables using hydraulic presses to extract juice from them. Cold-pressed juices are known to retain higher amount of nutrients.
Rakyan started the company in Mumbai through a home-subscription model before selling in supermarkets such as Foodhall, a chain of gourmet stores by Kishore Biyani’s Future Group.
Beverages, both hot and cold, are a $15 billion-a-year market in the country and growing at an annual pace of 11%, according to a 2015 joint report by The Boston Consulting Group (BCG) and industry body Confederation of Indian Industry (CII). The report identifies beverages and fruit juices as one of the fastest growing categories within packaged consumer goods market.
Large consumer firms, such as ITC Ltd, Dabur India Ltd, PepsiCo India Holdings Pvt. Ltd and Coca-Cola India are competing for higher market share in the market that includes colas, fruit-based drinks, dairy beverages and energy drinks.
In India, cold-pressed juice is still a small, urban-centric phenomenon with home chefs and young entrepreneurs experimenting with organic blends.
Globally, “the category of cold-pressed juices and all natural beverage is growing very fast and has huge potential with the focus on wellness which, even in India, is only going to continue getting larger,” said Ash Lilani, the managing partner and co-founder of the Silicon Valley-based Saama Capital, a first-time investor in Rakyan.
For DSG, the investment was the first from a new fund called DSG Consumer Partners II.
For Sequoia, RAW Pressery is the third investment in a beverage firm. It has also invested in the Bengaluru-based Hector Beverages Pvt. Ltd, which makes the Paper Boat brand of traditional Indian drinks, and in the Delhi-based craft beer company B9 Beverages Pvt. Ltd.
“We’re happy to have Ash and Saama Capital join us on board at RAW Pressery as Anuj and team set out to build the largest cold-pressed juice brand in the country. RAW has lined up a series of exciting new product introductions and we are looking forward to the launch,” said V.T. Bharadwaj, managing director, Sequoia Capital India Advisors.
This story was first published on Livemint