It’s slightly ironic that Samrat Reddy, the founder of smoothie bar chain, Drunken Monkey, chooses Starbucks as our meeting point. Apart from the fact that the 33-year-old isn’t a habitual coffee or tea drinker, Reddy’s ultimate goal is to build smoothies, and his brand, in particular, as a lifestyle choice—kind of like how coffee is perceived today. “Just as people say, ‘Let’s go for a coffee’, I want them to think of smoothies in the same way," he explains. For this reason, he counts Starbucks as his inspiration. “They sold coffee as a lifestyle not as a product. That’s my goal too," Reddy adds.
Though Reddy opened the first Drunken Monkey outlet in Hyderabad in February 2016, he had been toying with the idea much longer. In 2007-08, when Reddy went to the University of Strathclyde, Scotland, to pursue a one-year MBA programme, he wrote a paper on the smoothie industry globally, with special focus on India. “I studied mostly in Chennai and whenever I would step out with my friends they would want to go to a coffee place. I preferred this smoothie place called Fruit Shop on Greams Road but it wasn’t a ‘cool’ option like coffee," recalls Reddy, who was a sportsperson in college and continues to play basketball and cricket. His active lifestyle coupled with the fact that he doesn’t drink tea and coffee led him to look for healthier alternatives.
While delving a little deeper into the subject, he realised that in India, logistics was a problem when it came to handling perishable products such as fresh fruits. “It’s easier to set up and run a coffee or milkshake place that uses syrups as the products don’t spoil easily. With fruits, the prices fluctuate, the products vary and they are easily perishable. When the return on investment is the same, why would anyone want to invest in a smoothie bar that requires more involvement at the backend?" asks Reddy.
Engineer to entrepreneur
An electrical engineer by qualification, Reddy landed his first job with Infosys at their Melbourne office after completing college. After a year there, however, he felt that he wasn’t cut out for the job. “A standard 9-to-5 job wasn’t for me," says Reddy, who went to pursue his MBA soon after. For experience after an MBA, he managed a family-owned steel plant, Delta PEB, for over four years. “Managing the steel plant taught me to work with large teams and people," says Reddy.
A few years later, in 2015, the realisation that his career wasn’t going in the direction that he wanted it to motivated him to wipe the slate clean and go back to his original idea—opening a smoothie bar. Convincing family and potential investors, however, took longer. “My family couldn’t understand why I wanted to run a juice shop after studying and working so hard. People in the F&B industry tried telling me to open a dosa or biryani place instead as there was no market for smoothies," says Reddy.
Reddy spent a year experimenting with smoothie recipes, coming up with standard formulas for each of their signature smoothie blends and establishing a 120-member central operations team. In the first year, Reddy set up four outlets in Hyderabad. But the turning point, according to the entrepreneur, was when they went from four to 50 outlets in the second year. “Nothing changed in the model or the product. But people started believing in the product," says Reddy, who has invested ₹ 10 crore so far along with his two business partners.
Since smoothie bars aren’t an established trend, Reddy says the biggest challenge is building a new market. This includes educating the consumer. “Most people don’t understand what a smoothie is and how it’s different from a milkshake or juice," says Reddy, adding that their outlet staff is trained to explain the difference to customers. His branding strategy also consciously avoids promoting Drunken Monkey as a health drink because he doesn’t want customers to perceive the product as “healthy and boring". “The fact that our products are also healthy is an added bonus. We didn’t want to be preachy. The name—Drunken Monkey—comes from the same thought," Reddy explains. They also got a patented bottle mould made to stand out from the crowd of milkshake and juice companies.
Tier II cities were also a revelation for Reddy, who says that some of these outlets are at par or doing better than those in the metros. According to him, the advantages include low real estate costs, less competition and better buzz since word of mouth works well in smaller cities.
Chasing the millennial dream
Reddy said that he doesn’t like to give up on anything that he starts and he doesn’t have a plan B. “The moment you have a plan B in mind, you have already failed," he says.
For others chasing a similar startup dream, Reddy has one piece of advice – “Ask yourself what is the reason you want to do this. If you don’t have conviction, you won’t have the strength to see yourself through the difficult times."
Cheers To That is a series which looks at beverage start-ups set up by millennials and how they deal with trials and triumphs.