The credit of introducing milkshakes in India goes to a very first ‘Made in India’ milkshake brand i.e. Keventers. The Delhi based brand, Edward Keventer (Successors) Pvt. Ltd has established itself as an evergreen milkshake in India and is holding the Indian milkshake market from a couple of years with its effective business model.
The milkshake business vertical of Keventers is supported by the demand for milkshakes among different customers and more in tourists and youngsters. The Government has also initiated encouraging the development of quality dairy products. It’s really hard to believe that a brand like Keventers which was unnoticeable before the year 2015, can reach the height of success within 3 years. Also, it has reported remarkable turnover near to 100 crores before the end of FY 2018-19 with more than 270 stores in different places in India in such a short period and at the international level in Nepal, UAE, and Africa. Keventers has created a place in both old (generation X) and especially in the young generation (generation Y) customers by its product quality, packaging, and modern techniques of branding.
This success could happen only with a strategic and result-driven Business model of Keventers. A business model of any business reflects its products or services, target market, promotion strategies, competitors, pricing, revenue generation, future expansion strategies, etc. The base of the competitive business strategy of Keveneters lies in its 93 years old history.
Looking back in the history of the 1920s, dairy manufacturing units were established in India by a Danish dairy entrepreneur, Edward Keventer in 4 cities including Delhi. He had also set up a dairy in the year 1925 in the Chanakyapuri area of Delhi. Later on, this dairy was acquired by his nephew Werner Keventers after his death. Further in 1960, Ram Krishna Dalmia of Dalmia Group brought the dairy plant. He revamped the plant with modern structure by the latest machinery of milk bottling and also incorporated pasteurizers. Dalmia was able to establish Keventers as a famous manufacturer of milk and ghee. Moreover, the milk power of Keventers also got an identity as a top-selling product. Further expansion of manufacturing ice-creams of the Dalmia group moved towards becoming a well-known brand in the market in the 1960s and by the 1970’s it was on the peak of its success by being popular as “Keventer’s shake”.
Unfortunately, there was a shut down in the operations of the main factory of Keventers after that. Agastya Dalmia who is the Grandson of Ram Krishna Dalmia further decided to re-launch the Keventers again in 2014, but it didn’t work. Then again in 2015, he revamped the brand with his two partners Aman Arora and Sitaram. Starting with one outlet in 2015 in Delhi, they further witnessed a great success in 3 years with more own and franchisee outlets.
A Business model is a defined plan of any business that shows a clear path of how that business earns profits. The Business model reflects the strategy of a business for its success. A business plan or model is required in a fresh business set up or in the expansion plan of an already established business.
The success of Keventers is due to its revamped Business model of the above components, which is explained below in detail:
1. The Value proposition of Keventers
The Value proposition of a business model consists of the products or services any business offers, value to its customers and also unique features that give a competitive advantage in the market. The value proposition of Keventers reflects in its exclusive product of Milkshakes which is a combo of both quality and taste; also, in the attractive packing of milkshake bottles of Keventers.
a) Flavored Milkshake:
While revamping the business model of Keventers, there was a big challenge to develop new flavors of milkshake by maintaining the texture of the old or traditional recipe. To collect the original recipe being used years back was also a tough task but ultimately the brand got success in recollecting the traditional recipe. Another challenge was to look for quality milk for milkshakes.
By meeting the above challenges, the brand is able to establish as a most demanding milkshake in India. Its flavored milkshake carries the original recipes i.e. flavors of butterscotch, chocolate, strawberry, and also customers can experience its new flavors i.e. chocolate mint oreo, banoffee, Kit Kat which is being liked by younger generation customers.
b) Innovative Packaging:
Before launching the new business model, milkshakes of Keventers were being sold in PVC cups rather than glass bottles. While revamping, the brand introduced a new logo and also starting using glass bottles to serve milkshakes. This was a revolutionary step and sooner the business reached on heights.
The packaging of the Keventers milkshake bottle is very innovative and attractive. It’s a simple glass bottle and a degradable straw which gives a refresh and cool experience while drinking the milkshake. There is a tight rope also that is innovative and environment-friendly as well. Moreover, the glass bottles are reusable for any household purpose as well.
2. Target Customer base
Before the restructuring of the Keventers Business model, the brand was well known among Gen-X but Gen-Y was still unaware of the brand. So there was a big challenge in front of Keventers to target customer base of Gen-Y and create brand value among them as the main preference of Gen-Y is freshness, taste, variety and flexible packing. So it was a great challenge for the brand to create value as the most preferred milkshake brand in Gen-Y who was still unaware of the brand.
Keventers overcame this challenge by becoming an aspiration brand for tech-savvy youth or Gen-Y. This helped the brand to reach out to more and more target customer base. By focusing the business strategy towards Gen-Y customers and further adopting the marketing strategy of placing different stores and also attractive packaging, Keventers is now a well popular brand among youngsters. Today, the target audience of Keventers is between the age of 18 to 30 years, comprises of both college students and young professionals. Also, this target audience covers 57% of the total customer base of the brand.
3. Marketing or Promotion Strategy
a) Current marketing plan or strategy:
The business model of Keventers consists of strong marketing or promotion strategies that cover its USP (Unique selling proposition) as well. The Brand is using different effective marketing tools i.e. digital, Public relations, events, branding, etc. Its marketing strategy reflects in the design or packing of milkshake glass bottles.
An attractive thick and fluid glass bottle design for milkshakes by Keventers has become the USP of the brand. The brand has done a makeover of earlier DMS bottle and now it is designed to give a sleeker look having cursive flourish and logo’s font. Also, to highlight its originality, the bottle is printed with the term “Since 1925” and the term “The Original Milkshake” is also printed on the bottom. Moreover, the brand has designed special theme bottles or occasion-specific bottles for different occasions i.e. new market launch, festivals, important national days, etc. This USP and marketing strategy of Keventers has created a great customer base of their product in target Gen-Y customers who are well connected with the cool design of these glass bottles.
The bottle of Keventers has a heroic image in its promotional strategy and as a result, different customers are excited to see new designs of bottles. Being glass bottles, these are reusable and environment-friendly as well. Keventers is using strategic and effective social media promotion strategy and due to this, the milkshake bottle has become Instagram catchy. Lots of customers like to share milkshakes of the brand frequently. The trendy glass bottles of Keventers milkshakes have separate iconography as per city. For the global market also, these bottles are well designed. Like for Kenya, animal print is there on bottles and for Dubai, camels or Dubai’s skyline is printed.
Keventers stores are impressively designed stores with consistency in designing. Walls painted with a lively color combination, bright outlets that maintain shine in the brand logo, etc. attract customers and gives them a pleasant experience of visiting store outlets. Moreover, the brand has highlighted the importance of outlets by using the iconic structures of different places and showing these in the milkshake bottles as a world. These outlets reflect a mix of an old and new culture.
b) Current and future expansion plans:
Keventers has also entered into the dairy segment by diversifying its business. Their new company i.e. The Milk Co., is based on the mobile application for delivering superior quality premium milk service in Delhi/NCR. By this, Keventers has the mission to be a leading player in the milk segment.
Also, further expansion of the Keventers product segment includes launching Ice creams. They have initiated this by launching Ice Creamery which is an ice cream parlor. They are planning to introduce lots of premium and tasty flavors.
4. Competitor Review
The competitive business strategy of Keventers lies in its attractive and innovative milkshake bottle packaging and the original recipe of milkshake with multiple flavors. This sets the brand apart from its main competitors i.e. Frozen bottle, Amul, etc. The Gen-Y or young generation is connected through its classy packaging of bottles and innovative theme based designs for different occasions or ceremonies and Gen-X or old generation is through it’s still using the original recipe in producing shakes. Also, it has a premium pricing strategy for milkshakes.
5. Revenue Generation
Keventers next parameter of its successful business model covers the revenue generation strategy by meeting essential costs or expenses. After re-launching the business model, Keventers generated revenue of Rs. 5 crores in the first year and could recover their investment. They didn’t invest heavily in starting and initially employed very few people. To meet further growth needs and to avoid the risk of huge investment, Keventers adopted the Franchise business model. Initially, Keventers were able to meet the demand of the market for milkshakes but once the demand started rising more than supply i.e. by April 2016, the brand picked up strategy for bigger regions to sell master franchise rights. These master franchisees further tied-up with other franchisees in their respective regions to sell the rights.
This way, Keventers has now 270 stores in 30 different cities out of which they owned and operate 20 outlets and rest 250 outlets are owned and operated by franchisees. This has increased the turnover of Keventers to Rs. 100 crores before the ending year 2018-19 and is able to gain this success within 3 years.
THE FRANCHISE BUSINESS MODEL OF KEVENTERS
The franchise business of Keventers requires a franchisee to invest Rs. 25-30 lacs for designing the outlets and maintaining the standards of Keventers outlets. The raw materials for making milkshakes like flavor syrups are provided by Keventers to maintain the quality.
Advantages of Franchise of Keventers:
The Revenue model of Keventers:
The more revenue of Keventers comes from outlet sales i.e. from own and franchise outlets. The franchise model of Keventers has a great contribution to the brand’s revenue generation i.e. 50% of the revenue comes from the franchisee outlets. One time license fee charged from franchisees is Rs. 5 lacs and also earns a royalty of Rs. 40k per month from them. A small portion of revenue i.e. approx. 3-4% comes from catering services at weddings. In own outlets of Keventers, there is a daily log of 1200 transactions and the ticket size of a 300 ml bottle is Rs. 107 and for a 500 ml bottle is Rs. 210. For franchise outlets, daily logs are 500 per day.
Keventers is able to manage their ROI as the kiosks are build-up in the area of 100 sqft. The set-up cost of an outlet of 100 sqft is generally around 12-15 lacs and breaks even within 12-18 months. On weekdays, Keventers average footfall is 250 and on weekends it is 800-1000. The brand earns somewhere between Rs. 2-4 lacs per month from each outlet.
With the team of young entrepreneurs, Keventers became brand by choosing the right business strategy. The taste of Keventers in now meant for both young and old generations. So, the will power and effective business model are the main factors for success in any business.