Paper Boat invests in R&D for more trendy beverage flavours

By RJ Whitehead

- Last updated on GMT

Paper Boat invests in R&D for more trendy beverage flavours

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Hip beverage brand Paper Boat has budged INR130m (US$2m) for research and development at a new science and technology facility in its native Bangalore.

The company, whose start-up parent, Hector Beverages, is backed by Silicon Valley’s Sequoia Capital, has already broken ground on the R&D centre, which is expected to become fully operational in the next few months.

In just three years since it first entered the market with traditional Indian non-carbonated beverages, Paper Boat has established a strong following as a fashionable, natural beverage brand in its home market, as well as in Southeast Asia, Europe and North America. 

Its sales make up some 75% of total revenues for Hector Beverages, which also produces Tzinga, an energy drink. Following an investment round worth nearly US$30m by investors Advent Management and Hillhouse Capital last year, the brand was valued at over US$100m.

The company has faced considerable challenges in its ability to source sufficient quantities of ingredients to create and market new flavours to go alongside its current lines, which include Aamras, Jaljeera, Jamun Kala Khatta, Aam Panna, Kokum, Golgappe ka Paani.

Having until now focused solely on developing recipes, sourcing ingredients and manufacturing beverages, Hector hopes its new R&D centre will allow it to conduct research into new flavours at a faster rate. It previously relied on external agencies and universities for research on food science and technology. 

We want to do our own research on the science of food. We are moving from just recipes and chefs to food scientists, who can research on things like what effect chlorophyll has on oxidation​,” said Neeraj Kakkar, Hector’s chief executive.

The facility will be able to solve some of its current quandaries, he added, such as being able to make lemon juice—a delicate ingredient to handle—with natural flavours.

People usually make its juice with artificial flavours to increase shelf life. And Paper Boat will research on offering this and similar natural products without compromising on the shelf life​,” Kakkar added. 

Paper Boat is presently available at 100,000 retail points, and aims to double this number within a year. At the same time, its R&D team intends to develop 35-40 new products to go alongside the 10 lines currently in production.

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