Simple onion processing has a global market attracting the investors
Everyday Gourmet Kitchen Pvt. Ltd. raises pre-seed funding of $US 300k
Mumbai…June 15, 2018… EGK Foods, a Startup India Registered food processing organisation that deals primarily with onions and its by-products is an attractive bet for investors as simple onion processing has a huge market globally and has a huge growth potential. Everyday Gourmet Kitchen Pvt. Ltd. (EGK) has successfully raised pre-seed funding of $US 300k from Pradyumna Kokil, belonging to a family of CAs from Nasik, to take the company to its next level of expansion.
Satyajit Roy, fondly known in food circles as ‘OnionKnight’ and currently the CEO of EGK Foods conceptualised this out of a home kitchen, where he thought ‘There’s got to be a better way’ when he saw his mother chopping onions to make Biryani on a Sunday morning for more than 3 hours. On doing some research he found India to be the second largest producer of onions in the world and that 25% of the yield is wasted due to improper storage conditions as well as insufficient logistical support. There emerged the idea of saving onions and EGK Foods was born. He decided to address this issue and make a positive dent in the yield wastage figures by applying up-to-date food processing practices and implementing the newest available technologies. Jagdish Gothi, a 2nd generation entrepreneur became EGK’s 1st investor way back in 2015, who saw huge potential in the business. It was with Mr. Gothis and Satyajit’s vision that the company grew from a 150 sq. ft., 3-employee to a 1500 sq. ft. and 30 people organisaton in just 12 months at a growth rate of processing 500 kgs a day to 2500 kgs a day. Soon, Ashok Kacker, a very renowned retired IRS officer, saw value and invested in the company which has produced even better results.
OnionKnight Satyajit Roy, Founder & CEO, EGK Foods said, “I have always believed that we should work on problems worth solving and in my mind the onion crisis reported every year and the state of the farmers, many of whom I have met over the years, is deplorable. We were lucky enough to get investors involved who believed in the product and the company much before we had built it. In time we hope to attract FDI as per guidance by the Ministry of Food Processing of India (MoFPI) who we hope to work with in the near term as India positions itself to be the Food Bowl of the world. On the backend EGK Foods is setting up a bigger factory and backward integrating with farmers so that we can assure them guaranteed buyback of goods produced at a fair price irrespective of market fluctuations.”
EGK is also going through various market channels including wholesale, a small retail presence, e-commerce, modern retail. With funding, the distribution network will be accelerated. EGK Foods Pvt. Ltd. does not hold any patents although the process with which they fry and package the onions is proprietary. The company is looking to build out the infrastructure to supply the immense demand that exists for the product. There is immense growth potential in this market and being the first movers, EGK Foods has an advantage to capture the entire market. With upgraded infrastructure, wider distribution network and more retail/ wholesale presence, the company will be able to improve the margins.
Pradyumna Kokil, current investor in EGK Foods, “I am from Nasik and every year we are in the news for reasons relating to the plight of the farmers. I thought instead of complaining I should become a part of the solution. And once we heard Satyajit speak about the business we knew that we could really become big and solve the crisis that the farmers face. Hence we invested in this venture.”
Ashok Kacker, earlier investor in EGK Foods said, “Onion price fluctuation is such a big problem and I really thought that if a simple product can solve a problem, then it’s worth investing in it.”
Jagdish Gothi, co-founder & investor, EGK Foods, “When I met Satyajit and saw the passion that he had to actually become a solution for spiraling onion prices, I could see a lot of business sense, hence I invested, and we have been proved right.”
Currently EGK sells 30 metric tonnes of their finished product monthly which translates to about 150 Metric Tonnes of raw onions which are being processed every month. With the factory upgrade, production capacity will be close to 100 Metric Tonnes per month and there are plans to open up the domestic as well as international markets where the company has seen tremendous demand.
EGK aims to create a positive impact in the society through onion processing by linking the farmers to the end users and helping in avoiding the 25% annual onion wastage (approximately 5 tons). Mainly catering to HORECA (currently USD 419.68 Billion) and the food & retail segment (currently USD 39.71 Billion) poised to grow at 16.1% and 11% CAGR respectively. There exists a huge opportunity with abundance of raw material and easy procurement. The company has good margins and wholesale presence with expansion into all other segments of the market.