MBA Case Study: Paper Boat Teaches Some Serious Marketing Strategies For Startups

9 mins read

It's no secret that the FMCG food and beverage industry in India is highly competitive. So how did Paper Boat (a product of Hector Beverages), one of the fastest-growing beverage companies, manage to find success? In this brand case study, we'll take a look at Paper Boat's story -  the company's history, its out-of-the-box marketing, its challenges, and its eventual success.

The non-alcoholic beverage industry makes a sizeable contribution to the economy of India, both in terms of the value it adds and the number of jobs it creates. As per a report compiled by the economic policy think tank, ICRIER, India has the potential to become a hub for the production of non-alcoholic beverages. Interestingly, the non-alcoholic beverages market in India is estimated to reach INR 1.47 lakh crore by 2030, up from INR 67,100 crore in 2019. Given the country's availability of raw materials, labor, and governmental support, the industry is poised for growth!

Given these numbers, it’s clear that there are already a large number of competitors vying for the same portion of the pie. But Paper Boat not just found its place in the market, they built a powerful brand image and a unique value proposition for its offering. 

Let’s pour into the entrepreneurship case study of Paper Boat - how did they use a "Blue Ocean Strategy" to create a niche market by branding traditional Indian drinks? 

Setting sail for the world of nostalgia

We all wish we could travel back in time and live life as a kid once again! Whether it is sipping tangy Aam Panna, sailing paper boats in rain, or watching Saturday morning cartoons, there's something about childhood that tugs at our heartstrings. And the idea for Paper Boat was born out of this!

On a usual office lunch break, random banter led to an idea clicking in place! Former Coca-cola employees - Neeraj Kakkar, Neeraj Biyani, and Suhas Misra realized the need for a beverage brand that not only tingled the tongue but also pulled at the heart’s strings. 

In an interview with a daily, Neeraj Kakkar, CEO, Hector Beverages recalls, -

“The idea for Paper Boat was envisioned over a lunch break at the office. The Aam Panna that Suhas Misra's mother would pack for him every day sparked an idea while we were discussing prospective business ventures. We realized that the Indian market is devoid of commercial ethnic drinks!”

Often brilliant ideas languish because people lack the guts, time, and money to take action or are unprepared, but the trio decided to give life to their idea. And thus a company was born out of a desire to create a brand that would evoke memories and a sense of nostalgia. 

It was in 2009 when the trio joined forces with James Nuttall and laid the foundation of Hector Beverages (Paper Boat's parent company). Giving life to their idea was never an easy task. It was a challenge to bring their concept to fruition. Creating a brand that evokes memories of childhood was a monumental undertaking.

Two years later in 2011, Hector Beverages debuted two new brands to the Indian beverage industry: Frissia, a protein drink, and Tzinga, an energy drink. Fast forwarding to 2013, the founders of Hector Beverages decided to enter the traditional Indian drinks market with the launch of Paper Boat - Drinks and Memories.

Hector Beverages quickly rose to prominence with its line of unique 11 different traditional-nostalgic Indian food and seasonal drinks like chikki, aam panna, rose tamarind, coconut water, and panakam as well as other favorites like thandai, jaljeera (a popular drink of north India), serbet-e-khaas, and other juices.

Fun fact 1: You may not be aware of this, but a design and brand consultant by the name of Elephant Design proposed three names for the brand: Good Ol', Paper Boat, and Lost and Found. 

Fun fact 2: According to some web sources, "Paper Boat" was inspired by the Jagjit Singh ghazal "Who Kagaj Ki Kashti Wo Barish Ka Pani."

In response to the commercialization of previously unavailable ethnic Indian beverages, the public was overwhelmingly positive. Later in 2016, Hector Beverages decided to expand its offering and entered the traditional Indian food sector with products like roasted and smoked nuts.

In a world of carbonated drinks and fast foods, Paper Boat has made a name for itself in the FMCG market. However, major credit for Paper Boat's success can be ascribed to its marketing strategy, which laid the groundwork for its promotional activities.

How did Paper Boat unlock marketing success?

Paper Boat has succeeded by marketing itself as a nostalgic brand. As a result of its efforts, it is India's fastest-growing consumer brand and is sailing in dollars.

Here are some of the key factors that helped Paper Boat become a  new-age admirable brand:

1. Partnership and collaborations

The company saw early success with its marketing strategy by focusing on digital and traditional channels to reach its target audience. However, the juice company faced challenges as it attempted to scale the business. But they eventually gained a foothold in the smaller cities by partnering with Indo Nissin Foods. Today, Paper Boat has 48 SKUs across India, with a strong distribution network around the country.

At this point, they needed to ensure that their products were readily available to everyone. To guarantee this, Paper Boat is always on the hunt for ways to collaborate with leading e-commerce and delivery firms. Online resources claim that today more than a dozen countries are said to buy the company's products!

Fun fact 3: With more than 20,000 retail outlets, Paper Boat has tie-up with a wide range of enterprises, from coffee chains like Barista to hotels like the Westin and the Trident, and airlines like Indigo and Jet Airways. 

2. Moment marketing 

According to The Wall Street Journal, over two-thirds of online shoppers believe that the quality, timing, or relevancy of a company's message influences their perception of a brand. And Paper Boat never misses out on valuable opportunities to connect with its customers.

Fun fact 4: Renowned poet and lyricist, Gulzar wrote and narrated Paper Boat's debut campaign.

Paper Boat is ready for anything, whether it's a festival or a hot topic in the news! 

 

 

 

 

 

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A post shared by Paper Boat (@paperboatdrinks)

3. Packaging and presentation

Paper Boat launched its product into the market with single-serving Doypack packaging. Also known as a stand-up pouch, this kind of packaging makes the product stand erect on its bottom for display, storage, and use. Elephant, the design consultant of Paper Boat, has made packaging echo its origins, values, and story in the way that best fits the narrative - capturing the nostalgia of the childhood memories of a huge customer base.

Closer to the middle of the year, the company joined forces with Tetra Pak to offer holographic packaging for its two offerings - Alphonso Aamras and pomegranate juice. This revised packaging is an enhancement that should be applauded because it is both aesthetically beautiful and easy to hold.

Fun fact 5: NASA also employs Doypack to ship beverages to astronauts in spacecraft.

Now comes the interesting part!

The packaging of Paper Boat Doypack has a hidden and interesting element at the bottom of the pack! The best part is that it was never advertised by the company itself. Curious? Try it for yourself and see what you find.

Best things of #PaperBoat are written on its bottom pic.twitter.com/ySlZjYZI8i

— diwakar (@DiwakarKothari_) July 8, 2016

Not just packaging and selling traditional drinks, the company is also celebrating the stories and traditions associated with each of these drinks. 

4. Building connections with target customers

One of the things that set Paper Boat as one of India's fastest-growing consumer brands in the industry is their focus on developing relationships with their customers. Co-founder of Paper Boat Neeraj Biyani shares, "When we started out, we knew that we had to do more than simply package and sell these drinks. We wanted to revive the memories and traditions associated with them. And we wanted to ensure that the young generation doesn't forget the drinks that their grandparents grew up drinking." 

They did not focus on merely selling their products; rather, they made a concrete effort to build a connection with people by drawing on shared experiences from their childhood. For instance, their campaign - ‘Confessions by Siblings!’

Another such example of their marketing campaign is the production of ‘short films in multiple languages’ celebrating childhood memories. 

For instance: Here is a short story named - Paper Boat Postcard. 

A tale that is certain to cause a commotion in the calm waters of your recollections of childhood!

My First Train Ride, Jab Bachche They, Waiting for Ma, My Struggles with the Treasure Chest, and many others are all examples of short stories that can all bring out the child in you. 

Rowing against the tides!

Paper Boat is arming itself with every significant piece of equipment and repair in order to compete with the huge giants that dominate the Indian beverage industry, such as Dabur India, PepsiCo, Coca-Cola, and B Natural, amongst others. 

The juice company has been going up against the tides and winning due to a number of factors, including raising capital totaling USD 103.5 Million in 14 rounds and adding op investment firms like Narayana Murthy-led Catamaran Ventures, Footprint Ventures, and Sequoia Capital into its tally. Their success story serves as a useful reminder that, in order to succeed in an industry as cutthroat as this one, it's important to focus on creating a bond with your target audience. 

In 2017, Interbrand named Paper Boat a "breakthrough" brand, and AFAQs ranked Paper Boat in the top 10 buzziest brands in India for 2016. Paper Boat has established itself as one of India's fastest-growing FMCG brands in India, thanks to its meteoric rise to prominence.

The company has a bright future and we're excited to see what its friendly brand voice does next!

We've all read case studies on international brands, but here are a few case studies on Indian companies that are well worth your time to check out:

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• The TVF story | From being rejected by MTV to giving hits like Aspirants, Kota Factory and Pitchers
• Story of the woman who transformed Vimeo from a failing company into a Billion-Dollar SaaS company