The founder of Naturals talks about building India’s most successful artisanal ice-cream brand, and how he did it while battling diabetes
Thirty-five years ago, a young man from rural Karnataka set up one of Mumbai's first artisanal ice-cream parlours in a 400 sq. ft store. Today, Naturals has over 135 outlets across the country, it claims its annual revenue has crossed ₹100 crore in each of the last three years, and a KPMG survey on consumer experience placed it among the top 10 Indian brands in 2018.
How did Raghunandan Kamath do it? "Someone once asked the same question to the director of Hum Aapke Hai Koun..!," he says. "The director said, 'I made a film out of what was happening in my house.' Your life depends on what you have learnt growing up. It's the little things that make you big."
It might sound simplistic but Kamath swears by this philosophy. From his fruit-vendor father, he learnt how to identify the right flavours. From his restaurateur brothers, he learnt how to get ice cream right. From his mother's cooking, he picked up the hacks to blend the two in the perfect proportion. Growing up in a family of limited means taught him to work under budgetary constraints.
When I meet him, 64-year-old Kamath, wearing a powder-blue shirt and baggy trousers, is sitting in the second-floor office of his ice-cream factory, dipping a cracker in his tea. What kind of interview am I looking for, he asks me right away. Kamath might be fluent in Marathi, Hindi and Konkani, but is frugal in small talk.
My impression, I explain, is that Naturals' is the story of Indian jugaad. A family-run business that tapped into tropical flavours—sitaphal (custard apple), muskmelon, and tender coconut being the runaway favourites—and managed to get mass-produced ice creams to taste as good as handmade ones. Naturals, which relies largely on word-of-mouth for advertisement, is known to prize employee loyalty—for instance, there are free ice creams for the 140 factory staffers once a week.
Kamath thinks over my jugaad explanation for a moment. "You can give a headline as, 'Mother's struggle, bread for child'," he says in broken English. And thus we begin.
Kamath is the youngest of seven siblings, born in Mulki village of coastal Karnataka. It was an idyllic setting: a river gurgling through a village that grew crops like cashew and mangoes. "None of us had chappals (slippers)," says Kamath. "So there was no chota-bada (small-big) discrimination."
Kamath wasn't too keen on school. Only two teachers managed 40 students, spread over five grades. Often, students would all sit together and learn a smattering of all five levels. Kamath never managed to learn the English alphabet, and kept failing in English even as he was promoted to the next grade. This, he says, was a blessing in disguise."If I knew English, I would have got a job. I would never have had to innovate to survive."
When he was 14, Kamath and his parents moved to a 12x12ft kholi (shack) in Juhu Koliwada in Mumbai. His brothers had recently set up an Udupi restaurant in Santacruz. His parents wanted him to continue schooling but he kept playing hookey.
Teenaged Kamathwas captivated by Bollywood. "Sometimes, I would ride my cycle into the lanes where filmwallas like Shatrughan Sinha or Laxmikant-Pyarelal lived. I would stand outside their bungalows, looking at how beautiful they were, until the security guards started yelling at me."
Kamath was expelled from school after failing the class X exams twice. He started helping his brothers at the restaurant. He remembers his first day vividly. "I went and sat at the cash register. He (one of his brothers) said, 'Who told you to sit here? Go do the dishes.''' Perhaps they wanted him to work hard and rise through the ranks. After all, when he really put his mind to it, Kamath was full of ideas, especially for the ice cream they would make. But his brothers never took him seriously, Kamath reckons. His inexperience and indiscipline didn't help.
"By 1984, my elder brother had turned to spirituality. I won't take names but I think his guru was after his money," says Kamath. Their restaurant started running into losses. Finally, the four brothers decided to go their separate ways. Kamath got capital of ₹3.5 lakh. He was married by now and was itching to prove himself. This was his chance.
At the time, ice cream was a luxury and only a handful of ice-cream parlours were in business. "I remember, Kwality ice cream and Gold Spot would be the highlight of weddings. In my mind, only bungalow-wallas had access to it otherwise." He identified Juhu, a suburb of old money and new from business and Bollywood, as ideal for his maiden venture.
A staff member interrupts us. I realize my hour is nearly up. Kamath asks where I intend to go after the interview, figures his place is midway and offers me a ride. "We will talk in the car," he says. We take the elevator to the ground floor. The factory is humming with a few dozen workers, carting in crates of fruits to be processed into 14 regular flavours and a few seasonal ones.
When Kamath set up the first Natural Ice Cream outlet in Juhu Koliwada in 1984 (the "s" in Naturals was added as part of a rebranding exercise a few years ago), he also sold pav bhaji alongside. It was a trick: Spice them out with the pav bhaji, then offer an ice cream to cool them down. Soon, customers from beyond Juhu were heading for his shop. The first year, he earned ₹1.5 lakh. But Kamath wasn't satisfied. He wanted to be known only for his ice creams. "If you have to stand out, you have to specialize," he says. "You can't be a lawyer who specializes in income tax, GST, crime.... So after a point, I got rid of pav bhaji."
Naturals only offered five flavours then—sitaphal, kaju-draksh (cashew nut and raisins), mango, chocolate and strawberry. But soon, there were traffic jams outside his shop, with cars and customers often spilling beyond the designated parking space. As he had hoped, many among them were film stars, including Amitabh Bachchan and Dilip Kumar. Cricketer Vivian Richards, it has been reported, loved the ice cream so much, he offered to endorse the brand for free.
Kamath's dream run continued until 1994. That year, Kamath ran into trouble with the income-tax department. Then, one of his brothers-in-law started his own ice-cream parlour.
It felt like betrayal. "I had only one shop until then but I was happy. Now one of my own was putting a shop in my area." Kamath decided to scale up. He offered franchise opportunities to his relatives and long-term professional associates. In a year, he set up five Naturals stores in Mumbai.
But the competition wasn't just local. In the years after economic liberalization, US-based Baskin Robbins had entered the Indian market. There were home-grown giants like Vadidal, Kwality Wall's and Dinshaw. "I was scared at first," Kamath confesses. "But slowly I realized, we Indians are creatures of habit. After meals, we need paan, chhaas (buttermilk), saunf (fennel seeds)." Unlike the mass-produced vanilla, chocolate and butterscotch, Naturals offered flavours familiar to the Indian palate, like jackfruit and jamun (Java plum)."These are difficult to manufacture. We made our own machines for various tasks, like deseeding sitaphal. The process requires considerable human intervention. Most producers would stick to machines available in the market."
Many of Kamath's flavour and manufacturing ideas came from his mother's kitchen. He had seen his mother chop imli (tamarind) vertically, not horizontally. In a brief tour of his factory earlier, he demonstrates how he applied the same principle to break ice-apples—by creating a cavity where ice-apples could be loaded top down. To prevent milk carbonization, he had added a blower on top of the boiler, channelling the memory of his mother blowing on milk as it started boiling.
Naturals' niche became its USP. In time, Kamath groomed his two children, Srinivas and Siddhant, to follow him into the business. "Once, we had gone to the US for a vacation. My brother-in-law was driving us around when we saw a big car in front of us. My brother-in-law said, 'He must be a lawyer.' Srinivas asked, 'Why a lawyer?' He said, 'Only they can afford it.' I could see my son was impressed. I hit him on his thigh and told him, 'The lawyer too is paid by businessmen only.'"
Eventually, Srinivas studied law, "to avoid the mistakes I had made for my lack of knowledge". Siddhant studied hospitality management. The two, along with Kamath's nephew Girish Pai, work as directors in the company and under them, Naturals has expanded its operations to 30 cities across India.
Scaling up was a gradual process. Kamath was strict about quality control. The milk was sourced only from one dairy in Nashik. The fruits came from regular suppliers and regions they had relied on for years. The production centre too remained one—the 25,000 sq. ft facility in Kandivali. In the rebranding exercise, Naturals pitched its handicap as its strength by describing its ice creams as "Purposefully slow".
We reach Kamath's place, a two-storeyed bungalow in a gated complex in Lokhandwala—the kind of place you would stare at from the outside. It's tea time, and we are served a plate of "pizza puffs". I notice a pattern: tea with crackers earlier, baked pizza puffs, low on oil now... Kamath, it seems, is on a diet.
Did all the sugar and fat in his ice creams take a toll, I ask.
"I have sugar (type 2 diabetes)," says Kamath. "It has been 35 years."
It's a stunning revelation. "But you were in charge of R&D," I say. "How did you go about testing?"
"I would know from the colour, the shine, from the reaction on people's faces."
"You never enjoyed your own ice cream?"
"At first, yes. I also like to eat it without sugar, putting Sugar Free.... But you can tell the difference. You can give it 75 marks out of 100."
A month ago, he started experimenting with dairy-free, sugar-free products. The market potential of the organic and vegan demographic can't be ignored any more, he concedes. Maybe, in his 60s, he may finally have a chance to enjoy the fruit of his labour.
Your biggest achievement?
Becoming the biggest donor for the school that rusticated me.
Your biggest failure?
I couldn't do business with family. My elder brothers, I couldn't understand them my whole life. I couldn't ever explain that I will go by myself and solve all our (financial) problems.
Whom do you credit for your success?
My mother and wife. Even today, I ask my wife for tips if I am stuck.
Do you wish to return to your village?
I keep saying, we came to Mumbai to make money, now we should go back. But that's not possible. My kids won't come.