Natural Ice Cream – Sweeter Is the Story of the Founder
Ice cream is a magical invention that speaks to all our hearts. Across different age groups, geographical locations, customs and traditions, ice cream is a universal superstar which brings joy to everyone.
Many of us have grown up dreaming of owning our own ice cream empire. We would have the option of making extravagant executive decisions and creating masterpieces. The cherry on the cake would be the fact that there would be no restrictions on the amount of ice cream we consume.
Well, even though our ice cream dreams remain unfulfilled, for Raghunandan Kamath, the Ice Cream Man, this ideal situation has become a reality. His empire, Naturals Ice cream is one of the most popular brands of ice cream in India. With over 135 outlets across the country and a yearly turnover of more than Rs. 100 crore, Raghunandan Kamath’s success story is one that has the capability of inspiring the potential entrepreneur in us.
That, my friends, is why we are gathered here today.
I am going to tell you all about the intriguing life led by the ice cream magnate and his rise to success.
Let us start at the very beginning.
Raghunandan Kamath was born in Mulki, Karnataka, in 1954. Born into humble beginnings, Raghunandan experienced a very idyllic childhood, in his home village. He spent his days climbing trees, exploring the surroundings and indulging in mischief whenever possible. He was enrolled at the local village school for a few years before his family moved to Mumbai. His education was lax, to say the least, and he failed in English several times.
The Kamath family’s financial conditions were always poor. Raghunandan’s father was a humble fruit vendor and earned just barely enough to sustain his seven children and his wife. Kamath later on revealed in an interview, “None of us had chappals (slippers).”
Raghunandan’s family moved to Mumbai when he was aged fourteen. His father was a fruit-seller, and his family’s financial conditions were not ideal. The entire family lived in a 12*12. Here, his parents enrolled him into a standard school so that he may receive a proper education. However, Raghunandan was not interested in the prospect of sitting in a classroom and listening to a teacher’s lecture.
According to him, the best education was out there in the real world and it involved immersing oneself in productive activities.
“If I knew English, I would have got a job. I would never have had to innovate to survive,” said Raghunandan Kamath.
After a few dismal attempts to complete his formal education, Raghunandan decided to cut his losses. His brother had started his own restaurant, Gokul Refreshments, which offered a selection of authentic South Indian food and ice cream. Raghunandan joined his brother’s business and took up whatever petty jobs were available. He washed dishes, served food and cleaned tables.
While he was engaged in physical labour, Raghunandan observed the customers and daily functioning of the restaurant. Much like a moth is drawn to a flame, the Natural Ice Cream founder was most interested in the ice cream section of the restaurant. He observed that the customers at the restaurant actually preferred the ice cream to the authentic South Indian cuisine. However, any time he tried to make some meaningful contribution to the business in terms of ideas and suggestions, he was shot down by his brother.
Undeterred, Raghunandan continued his observations and he eventually came to the conclusion that if he could open up an ice cream parlour that served natural ice creams without any artificial flavourings, then that would be well received by consumers. With this plan in mind, Raghunandan continued to work at the restaurant, biding his time in wait for a suitable opportunity.
He did not have to wait long. Gokul Refreshments soon found it hard to cope up with the competitive environment in Mumbai and went out of business. With the dissolution of the restaurant, a small sum of money came Raghunandan’s way as his share of the sale. This modest sum signified the chance to realise his dreams and truly invest in what he believed in. Raghunandan did not waste this opportunity. With emotional support from his wife and some financial assistance from his friends, he amassed enough to buy a shop.
In 1984, he opened his own shop in the Juhu area of Mumbai. Of course, back then the ice cream was still a luxury commodity. In order to temper his expectations, Raghunandan started selling both ice cream and pav bhaji. This was to ensure that even if his ice creams were not as popular as he expected, he would still be able to generate some income through the sale of the tried and tested favourite, pav bhaji.
Raghunandan Kamath, the Ice Cream Man, started his ice cream journey with five flavours: sitaphal, black grapes, mango, chocolate and strawberry. From the beginning of his journey, Raghunandan stuck to his philosophy. He knew that his formal education was not up to average standards. However, he had grown up helping his father with his fruit selling business, and he possessed unequalled knowledge of fruits. From his experience at his brother’s restaurant, he knew the basics of how to make ice cream. From spending time with his mother in their small house, Raghunandan had picked up an instinct which enabled him to crack the proportions required to perfect the recipe.
Let us treat this as invaluable advice in order to ensure a successful life. Stick to what you know. The Natural Ice Cream Founder used the small things he had learnt growing up and translated all of that to begin his business. It is this philosophy that set him apart and ensured his success.
As Raghunandan’s shop started gaining popularity, his own confidence in his abilities grew. After the first year, he stopped selling pav bhaji and focussed all his attention on ice cream. While this move was an extremely risky one, it paid off for him. Raghunandan’s ice cream was a truly unique experience. The all-natural flavours with no artificial additions proved to be a huge hit among his customers and slowly his popularity grew.
“If you want to stand out, you have to specialise,” said Kamath.
In fact, a number of Bollywood stars like Jaya Bachchan and Dimple Kapadia became frequent customers.
Natural Ice Cream: Taste the Original is one of those companies which grew only through its unique comparative advantages. With very little spent on advertisements and marketing campaigns, the company increased in popularity primarily through word of mouth publicity and recommendations. In fact, statistics have shown that Naturals spends less than 1% of their total revenue on marketing. The company has always given high priority to the opinions of customers, even going so far as to launch new flavours according to their suggestions.
From the beginning, Raghunandan relied heavily on customer feedback and suggestions, and this proved to be the fact that made a difference between just an ice cream shop and an empire.
It was not all smooth sailing for Raghunandan. Soon after the initial success of his shop, diversions and distractions started cropping up. It all started in 1994 when Raghunandan’s family members decided to try their own hand at this ice cream business in order to gain a share of the profits. One of his brothers-in-law opened up an ice cream parlour of his own. He too started producing natural fruity flavoured ice creams without any artificial ingredients.
Raghunandan was faced with a new problem. Now that he had established a clear demand for his product, his next job would be to secure his own position, so as to weed out the imitators. Raghunandan decided now would be the best time to expand his own brand.
Once set on this new path, Raghunandan started looking for external sources to finance his expansion. He obtained a bank loan of Rs. 65 lakhs. Within a year, he had set up five shops around Mumbai. This marked the series of expansions.
Of course, by this time, the ice cream had become a more widely consumed product and other competitors started cropping up. From domestic brands like Vadilal and Kwality Walls to the entry of international brands like US-based Baskin Robbins, the Indian markets received an inflow of options.
However, as we know, the secret to any long-lived successful company is a comparative advantage. This is where Naturals always had an edge. Their product was truly unique. While other companies focussed on traditional flavours such as chocolate and vanilla, Naturals wowed customers with their fresh and seasonal fruity flavours. While other brands used artificial ingredients to bring flavour to their ice cream, Naturals relied on the taste of the fruit to carry them through.
In fact, part of the expansion policy undertaken by Raghunandan Kamath included the creation of special machines which would deseed and prepare the fruits for infusion. These machines were the intellectual property of Naturals. Without any insights, other companies were faced with the unimaginable task of manually preparing fruits, if they wished to compete with Naturals. Obviously, this was not possible and Naturals flourished over their competitors.
Today, Naturals has established a niche for itself in the ice cream industry. By giving great importance to quality control and the development of flavours, the company has proved that it indeed lives by its tagline, “Naturals: Taste the Original”.
In fact, Raghunandan Kamath’s success can also be used to prove Steve Jobs’ connecting the dots theory. As explained in his commencement address at Stanford University in 2005, Jobs mentioned the importance of understanding your past and putting that into context to ensure success in your future. Raghunandan used his experiences of his past to make decisions which ultimately led to the creation of Naturals. Looking back at the decisions he has taken, it is possible to obtain a clear chain of logical thought.
This is what makes the difference. This is what ensures that all the unique experiences that make you, you, also translates into success in your professional life. As Jobs said, “You cannot connect the dots looking forward; you can only connect them looking backwards.”
From generating an annual revenue of Rs. 1 lakh in 1984, Naturals climbed straight up. By 2009, the company was generating a revenue of Rs. 30 crores. in 2010, this number rose to Rs. 40 crores. As the valuation of the company rose, so too did Raghunandan Kamath’s net worth.
Currently, Naturals is worth more than Rs. 200 crores. The company is one of the top 10 in the country in terms of the consumer experience. It boasts of a 25,000 square feet factory in Kandivali, where the fresh flavours are produced every day and then distributed to its outlets in the rest of the country.
Raghunandan Kamath has groomed his sons Srinivas and Siddhant to carry on his legacy. He is a noted philanthropist and has donated huge amounts to education and other causes. The ice cream king also suffers from type II diabetes and is sad, unable to consume his own products. He has revealed in an interview that he would know what the flavour would be like “from the colour, the shine and the reaction on people’s faces”.
This is truly a rag to riches story.
Even more than that, it is proof that perseverance, dedication and talent will always shine through, even without formal education. Raghunandan Kamath and his ice cream are an inspiration to all of us.
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