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Monday, May 29, 2023

Deepika Padukone-backed Epigamia won’t sell its business, CEO says

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Epigamia, an Indian yoghurt manufacturer supported by French dairy giant Danone, has decided to shelve its strategy of selling its business, which has been affected by inflation.

The company’s CEO says, it is now seeking to broaden its horizons by venturing into new markets, according to Epigamia, a small Indian startup that specializes in marketing flavoured Greek yoghurt and fruit-based drinks to health-conscious customers, has gained popularity in urban centers since its inception in 2015. The company is also backed by Belgian investor Verlinvest.

The company’s financial struggles serve as a striking example of how surging costs are affecting small consumer goods startups in India, as it has been operating mostly in the red.

In the wake of a funding crunch and heightened investor scrutiny, many startups that experienced a valuation boom in recent years are now prioritizing profits. Epigamia, a prominent player in the Indian dairy and yogurt market, has followed suit by announcing its decision to forego a sale.

According to CEO Rohan Mirchandani, there were a few discussions regarding sales due to the challenging inflationary climate. Over the past four years, there has been a sense of being carried away. Until now, profits were not considered a target. The individual expressed that there should have been an emphasis on profits since the inception of the venture.

Epigamia eked out its first-ever tiny operational profit in April and closed the fiscal year with $24 million in revenues, after recently slashing marketing spends by 75%, cutting distribution by around a third to 25,000 stores and laying off around 2-3% of its workforce, Mirchandani added.

The yoghurt maker has announced plans to increase its revenue by 50% to reach $36 million by the end of the fiscal year in April 2024. Additionally, the company intends to expand its market reach by launching products in the Middle East by 2025-26.

Over the past year, milk prices in India have surged by more than 15%, marking the swiftest rate of increase in ten years. India’s dairy market, valued at $159 billion, presents a vast potential for growth in the high-end yogurt and milk products segment. Epigamia, a player in this market, faces competition from major players such as Nestle, Amul, and Mother Dairy.

It is evident that the company considers itself to be a product of slightly higher quality and price. According to Mirchandani, the aim is not to have a presence everywhere, but to focus on serving the top 100-150 million Indian population.

Popular Bollywood actress Deepika Padukone has been roped in as an investor by Epigamia, in what is being viewed as an attempt to attract younger customers.

Bollywood actress Deepika Padukone, known for her role in the 2017 action flick “XXX: Return of Xander Cage” alongside Vin Diesel, has recently been seen in a number of online video commercials endorsing Epigamia’s chocolate spreads.

According to the latest available data on Pitchbook, Epigamia was valued at $93 million in 2020. In 2019, Epigamia, a food and beverage company, received a $22 million investment from Danone’s investment arm. Danone is known as the largest yoghurt-maker in the world.

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