How to build a ₹100 Cr popcorn brand? 🍿

The answer is in the microwave right now.

Welcome to the 214th edition of the GrowthX Newsletter. Every week, I write two pieces that go to 110,000+ founders & growth operators across marquee technology companies like Stripe, Freshworks, CRED, Tesla, Airbnb, Netflix & even ISRO. They love it and share it with their team. If you work/ curious about tech businesses, do subscribe & share it with your work friends - it’s free.

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For a very long time, I used to think Microwave oven was a luxury.

Fast forward a few years, and I realize how microwave ovens have become a need in life. And, anything that can be cooked in minutes in a microwave oven gets a priority on the shopping list.

Plus, the microwave oven has become an integral part of my lunch times. The answer is straightforward - I work remotely and my lunchtime is 2 hours away from where my cook makes the delicious food. So my primary use case is reheating. I am sure, you will have that one use case that triggered you to buy it at some point.

But we are talking about popcorn.

In 1984, ACT II, a shelf-stable microwave popcorn was released, becoming the first mass-marketed microwave popcorn. Originally manufactured by Golden Valley Microwave Foods, it was later bought by ConAgra Foods in 1991.

ConAgra launched ACT II popcorn in India back in early 2000s. And if you plot the growth of microwave ovens to ACT II growth, you see an interesting pattern.

Only 4% of Indian households own a microwave oven. Compare that to US which has 90% households with a microwave oven. When ACT II started in India the % of households with microwave was under a percent.

A microwave popcorn brand doing ₹100+ Cr revenue with ~4% Indian homes having a microwave - the headroom to grow is insane 🤯

Plus there is hardly any competition. A few players such as 4700 BC (the PVR brand), American Garden exist but have marginal market share. All they have been able to crack is some level of flavor differentiation (which isn’t defensible).

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So what really worked for ACT II?

1/ Extremely well defined audience.
It says microwave popcorn. This meant it’s focused on only a certain level of household incomes that could afford a ₹10,000 microwave oven. The appetite (ability) to pay for a microwave helps sell a popcorn packet at ₹35 per piece.

2/ The right packaging.
If you hold the ACT II packet, you will understand what they are trying to nail - the association with the feeling of getting the cinema theater like popcorn.

3/ The price point.
If you compare the effort to having to make popcorn from scratch at home, you are going to spend at least a few hours. If you order from the outside, you will spend ~₹200 with a 4700 BC at the least. ACT II will cost at least 80% cheaper.

4/ Focusing on right to win.
With ordered popcorn, you don’t get the same hot freshly made popcorn flavor. That's the right delta experience with microwave popcorn. ACT II doubles down on this communication across its product & marketing copy.

5/ Pushing smaller packets.
As a packaged goods category, its really hard to solve for repeat. Unless you are selling in bulk and incentivising first time customers to buy in bulk - in turn solving repeat consumption behavior.

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This is very similar to the Oregano insight on Dominos I wrote a year back. If you want to plant a reminder trigger for repeat purchase in your products, it's a must read.

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In this episode we have Siddhant Jain, GrowthX member since 2022 & co-founder of SaSOnline - a platform built for equity traders & doing over ₹70 Cr revenue. He talks about a couple of things.

• Zerodha’s rise story - the referral programs.

• Building tech as a moat early on - how trust works at scale.

• How really stock broking works in India, especially from product angle.

• How SAS online found product market fit, how it scaled to ₹70 Cr revenue.

• Advice for fintech founders in India based on hist 10 year journey & trends.

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