The Organic World eyes to be Rs 100 crore brand by FY 25 end

Grocery retailer The Organic World, which closed the last fiscal at Rs 35 crore, is planning to close this fiscal at Rs 60 crore and is eyeing to be a Rs 100 crore brand by FY 25 end, Gaurav Manchanda, founder and director, Nimida Group (the parent company of The Organic World) told ETRetail.

Over the past years, the brand has been growing between 2.5 to 5 per cent month-on-month and ends the year with a 20-25 per cent growth.

Talking about the profitability of the brand, Manchanda said, "At the unit level, we have reached the break-even point and stores continue to be profitable, however, we are still not profitable at the head office level."

To auger the growth further, the brand is planning to expand its offline reach by foraying into new cities along with penetrating deeper into the existing markets.

Currently, the brand operates 17 stores - 13 company-owned and company-operated stores and 4 franchise stores. And this fiscal, it further plans to open 10 company-owned company-operated stores and 25 franchise stores.

"Our target is to open 100 stores over the next 18 months. We have a lot of interest coming in from cities like Hyderabad, followed by Chennai and Bengaluru. Currently, we plan to focus on these 3 cities and then we will start expanding to cities like Coimbatore and Mysore," he said.

"Eventually, we intend to enter metro cities like Bombay, Pune, Ahmedabad, and Delhi, as well as Gurugram by 2026. But right now, due to supply chain constraints, we are now focussing only on South India," he further added.

Out of the 100 stores that the brand is eyeingto open, it plans to have 75 franchise stores and 25 company-owned and company-operated stores.

The bootstrapped brand has no plans to fuel the expansion by raising funds rather it plans to fund it through internal accurals.

"The CAPEX involved to open a turnkey and ready-to-operate company-owned company-operated store stands at Rs 60 lakh. It spans across 1,000-2,200 sq.ft and offers 3,500 SKUs, whereas the CAPEX for the turnkey and ready-to-operate franchise store stands at Rs 20 lakh. It spans across 500-800 sq.ft and offers 2,500 SKUs," he explained.

"For us, 20-30 per cent of the SKUs like dairy, bakery, snacking, and staples drive a significant portion of the business," he said.

At present, the brand also has 3 private labels operating in 3 different categories - Happy Harvest Farms offers organic staples, WellBe offers snacking options and Osh Life caters to the homecare needs of the consumers.

"Going ahead, we plan to launch more private labels in categories like personal care, vegan and gluten-free products," he asserted.

WellBe is also present across 1,000 other retail stores like More Retail, Lulu's, and Nature's Basket to name a few along with The Organic World stores.

"Going ahead, we plan to enter GT as well with WellBe by focusing on the smaller packs and plan to take it to the national distribution level over the next 18 to 24 months," he said.

At present, private labels contribute to 55 per cent of the sales of the brand, and going ahead, the brand plans to increase the contribution of the private labels to up to 65-70 per cent.

Currently, 90 per cent of the revenue of the brand is contributed by offline retail and the remaining 10 per cent comes from online retail.

"We plan to make it an 80/20 split soon by increasing our average basket size. We're also going to offer our products at quick commerce platforms," he asserted.

The average basket size of the brand stands at Rs 960.