Arzoo DinaPublished on Apr 20, 2023Rising Stars: Mikhel Rajani of Naagin Sauce on putting indigenous chillies on the global mapMikhel Rajani of Naagin Sauce on scaling up, raising funds and why competition from other brands only validates the space furtherThe brand's hot sauce line currently offers four variants: the Original, which is inspired by Mumbai’s iconic vada pav masala, featuring Sankeshwari chillies; Smoky Bhoot, featuring the high-on-the-scoville-scale bhut jolokia or ghost pepper chillies from North East India; Kantha Bomb, made out of green Kanthari chilliesThe co-founder of the homegrown brand on scaling up, raising funds and why competition from other brands only validates the space furtherMikhel Rajani, the 35-year-old co-founder and managing director of Naagin Sauce is a man on a mission—to build a household condiment and hot sauce brand that is not only proudly Indian but also one that has an emotional resonation with the masses. It all started with the idea of offering a hot sauce that was inherently Indian with flavour profiles that consumers were familiar with. “If you go to see, India is one of the largest exporters and consumers of chillies in the world, but no homegrown brand has aligned itself with that reputation. We wanted to change that perception,” says Rajani. Together with his co-founders Arjun Rastogi and Kshitij Neelakantan, the trio put together their combined expertise (Rastogi and Neelakantan have experience in digital marketing, while Rajani is a seasoned F&B entrepreneur, having run a pizza chain in Mumbai called Francesco’s, before selling his stake in the brand) and launched Naagin Sauce in 2019. Since then, Naagin has grown from a two-product portfolio to a range of hot sauces, spice mixes, chilli oils and even pantry essentials like pizza and pasta sauces. The brand’s hot sauce line currently offers four variants: the Original, which is inspired by Mumbai’s iconic vada pav masala, featuring Sankeshwari chillies; Smoky Bhoot, featuring the high-on-the-scoville-scale bhut jolokia or ghost pepper chillies from North East India; Kantha Bomb, made out of green Kanthari chillies; and ‘The 65’ hot sauce, inspired by Rajani’s boarding school days in Kodaikanal, Tamil Nadu.The company has raised three rounds of funding so far, with a total of ₹12.5 crore from investors such as Bollywood actor Abhishek Bachchan, Touchstone Equities, 8i Ventures, and Satguru Builders, among others. According to a report by Statista, the revenues in India’s sauces and condiments segment amounts to US$28.4 billion in 2023. The market is expected to grow annually by 6.67 per cent (CAGR 2023-2027). It’s a ripe opportunity, Rajani believes, as they grow the brand not just within India but outside the country as well. The ultimate goal, he says, is to be a “sauce solutions provider”, offering an end-to-end range of products, and catering to the HORECA (HOtel, REstaurant, CAfe) and B2B segments. Edited excerpts from a chat with Rajani:"The goal is to position ourselves as a sauce solutions company—that will be a focus for us as the years go by" says Rajani‘The 65’ hot sauce, inspired by Rajani’s boarding school days in Kodaikanal, Tamil NaduTell us about the genesis of Naagin Sauce. What was the value proposition behind launching a hot sauce product? I had always been leaning towards doing something in the FMCG space. It just so happened one day that I was watching a cricket match where the Bangladeshi players broke into a ‘naagin’ dance to celebrate their victory. That struck a chord with me, because this is such an emotion for most Indians. I even ended up buying the domain name Naagin Sauce at that point. Sometime later, my co-founders and I were discussing a few ideas around Hot Ones, a US-based show challenging people to eat spicy chicken wings, and that’s when we started tinkering with the concept of launching a hot sauce equivalent in India. Countries like the US have a robust hot sauce culture. Mexico, too, has its popular Cholula Hot Sauce, but India doesn't have one. That’s the opportunity we saw. When you think of India, you think it’s a country of spices. But no one had designed products for the Indian palate. What you were getting in the market were either Chinese sauces or Western-flavoured ones. We found that to be our USP—creating original Indian flavours.How did you go about building the product portfolio?We started with two hot sauces, one was the Original—less spicy and more approachable for most palates—and the second was the one comprising bhut jolokia, which is very spicy on the chilli spectrum. Then, the COVID-19 pandemic hit, so we decided not to be too adventurous with launching several products at one go. Each of our products is centred around different Indian chillies. For instance, the Original sauce champions the Sankeshwari chilli from Maharashtra. We’ve also used Kanthari chillies from southern India in the Kantha Bomb, and for our crispy chilli oil, we’ve used the fiery Guntur chilli from Andhra Pradesh. Now, we have about nine SKUS in the market and plan on launching another four to six products over the next two quarters.“WHEN YOU THINK OF INDIA, YOU THINK IT’S A COUNTRY OF SPICES. BUT NO ONE HAD DESIGNED PRODUCTS FOR THE INDIAN PALATE”Mikhel Rajani"We’re one of the few Indian brands available in Carrefour in the Middle East and Walmart in Canada," says RajaniIn many ways, Naagin has put indigenous Indian chillies on the map. What are your thoughts on how this has evolved?People know about habanero and jalapeno but no one really knows what a Guntur or Sankeshwari chilli is. It’s heartening to see the change now. We’ve seen a positive response since we started and we’re trying to be innovative with our product offerings. For the last 3.5 years we’ve spent time learning about crop cycles, building a supply chain and working with farmers to procure quality Indian chillies.We’ve built a presence internationally as well, which has mostly been due to external interest. We’re one of the few Indian brands available in Carrefour in the Middle East and Walmart in Canada. Our products are also available in countries like the US, UK, Australia, Singapore and New Zealand, with partners who want to take our offerings to their respective markets. However, our online presence on Amazon in the UK and US is something we are doing ourselves. Brand collaborations have been a strong marketing tool for the brand. Can you tell us more about this?I believe this is one of the biggest differentiators between us and other brands. Apart from being present on retail shelves, we’re actively collaborating on the B2B front. We think our sauces and condiments are positioned well for this—from fast food and burger joints to pizzas and so forth. We recently collaborated with Soft Spot Foods for Naagin-flavoured vegan cheese. We’ll soon be launching Naagin chips in the market, and even Naagin Sauce-flavoured ice cream, as a collaboration. It will have the signature naagin heat to it. The goal is to position ourselves as a sauce solutions company—that will be a focus for us as the years go by. When you first pitched Naagin to investors, what was the initial reaction like? Was it challenging to raise funds?The fundraising process in itself can be quite challenging. We were lucky that we got investors on board who believed in our vision from day one. We got rejected on our first pitch and got funded on the second. Interestingly, we raised our first round, and three months later the country went into lockdown, which threw our business plan out of the window.Mikhel Rajani, Arjun Rastogi and Kshitij Neelakantan launched Naagin Sauce in 2019Our investors understood that we had to grow in a challenging environment. I’d like to think of this growth as a marathon and not a sprint–we’re focusing on being an omni-channel brand. There have been a number of launches in the condiment space, especially homegrown brands. How do you see the market growing and how has it matured?We opened the doors for a lot of players and we’re happy to see this happen— more and more people are celebrating Indian chillies and regional flavours. There is always going to be competition but that validates the space. Just look at how massive condiment aisles are abroad; we have a long way to go yet. We are just toddlers on this front. "Apart from being present on retail shelves, we’re actively collaborating on the B2B front""We opened the doors for a lot of players and we’re happy to see this happen— more and more people are celebrating Indian chillies and regional flavours"How are you planning to scale up from here?We are growing at 30 per cent every quarter, consistently since the last 18 months. We have a healthy growth rate and high margins on our products, given that we have our own manufacturing unit. That gives us a competitive advantage too. Currently, we want to expand our manufacturing and hire more sales staff in different regions. We are hoping to achieve net sales of ₹2 crore a month by the end of this calendar year. What’s next for Naagin Sauce?While we have been focused on growing in India the past few years, we are seeing positive traction on the international front. We’re daring to see beyond the Indian market now. So exports will be a big focus for us. Read Next Read the Next Article