Diseconomies of Scale – Hipster Start-ups and Their Stupid Products

I am getting a lot of advertisements on my Facebook Mobile and Instagram feed about businesses like Delight Foods and Qtrove. I want to focus on these two because they are very entertaining. I will also give special focus to Raw Pressery. More on them in some time. My fingers are already itching to attack them. There are more businesses on the similar line like The Butternut Company, The Man Company etc. which make products which I call as Hipster. Also, why did I state Facebook Mobile and Instagram? Because I don’t have ad blockers on them like how I do on my browser.

Hipster products according to me are overrated, non-scientific, illogical, and not feasible to make profit out of. Let me give you an example, The Man Company is selling almond oil in a fancy package for Rs. 699/- for 50ml. Their argument is that it is natural.  The market for these products are tiny. See that dot on the letter ‘I’ in tiny? That is the size of the market for their products.

You might say there are designer brands which are doing quite well in India, why can’t these products? Designer brands do well because they are unique, they have that panache and they have reputation. A very important factor which makes designer brands so powerful is that there are no substitutes. There are numerous substitutes for almond oil and everything else sold on Qtrove and Delight Foods. You can easily find them at the local supermarket.

Delight Foods advertises its honey on Instagram and Facebook and I quote; ‘Presenting the purest wild multiflora forest honey from the deep forests of Western Ghats. These forests with a large range of medicinal flora are a UNESCO World Heritage site and has no pollution or pesticides in the environment. We have tied up with an NGO which works with tribals to collect this honey – it is RAW and unprocessed and thus retains all the medicinal benefits. Laboratory tested have better properties than most imported brands. You can actually see the pollen matter suspended in the honey!’

I don’t understand how a UNESCO World Heritage centre allows a business to take a resource of nature and sell it to someone from Bangalore or anywhere else in India. They say they are taking the help of local communities with the help of an NGO. When I had been to Bandipur last, I found a massive skull of a Gaur (Indian Bison). I really wanted to take it home but the forest authorities refused. Here we have honey being taken from a World Heritage Centre! Bandipur is not even recognized by UNESCO. This should assert my point about these hipster products being illogical.

Unprocessed does not mean it retains medicinal benefits. If the honey Delight Foods is selling is rich in certain nutrients, the human body can absorb only what is needed daily and not more than that. I use whey protein. I need about 120g of protein in a day and if I were to take about 150g of protein the remaining would be filtered out by my kidneys and liver because they are unnecessary. Again, I am asserting the point about it being illogical.

Let’s talk about this not being feasible. How much honey can you possibly extract? Dabur gets its honey from Apiaries across the country. Beekeepers handle 1000s of bees and can increase or decrease production by changing the bee count in their farms. Therefore, you will see every supermarket stocked with Dabur honey.

I’m guessing Delight Foods can create only a few bottles per week or even in a month aside from the logistic issues that goes into taking these from tribal communities and delivering it to my doorstep. Besides, production of honey is in the control of nature and not Delight Foods. Don’t you think if the method Delight Foods was using was feasible, even big brands like Dabur would have done it? Hence it isn’t feasible.

Qtrove sells bacon jams, ghee, and home-made products. Their packaging is simply beautiful. But when you see the price, you tend to click on the ‘X’ mark on your browsing tab. The peanut butter they are selling is Rs. 130/- for 200g. I use Fun Foods peanut butter which cost me Rs. 149/- for 340g. Qtrove says that peanut butter they are selling is sugarfree. The one I use has 18g of sugar in the 340g package. This does not justify me having to spend so much on sugarfree peanut butter on Qtrove.

Other tags Hipster products add is ‘DETOX’ and this is very popular by a start-up based in Mumbai called Raw Pressery. This is a business which makes cold pressed juices. As I am writing this, I had four glasses of Mango milkshake (sugarless) from Krishna Juice Center. He makes it by grinding up the mango in a blender. Cold Pressing is merely using pressure without grinding anything to make juice. You can try cold pressing if you squeeze an olive, you can see the olive oil sticking to your finger tips.

The belief is that cold pressing makes the juice healthier. It doesn’t. It makes no difference and there is enough research that proves cold pressing does nothing. Blenders produce heat (a little) when grinding up anything and this apparently reduces the vitamins and minerals which the fruits contain. It doesn’t. If a little heat caused breakdown of nutrients then the plants which bear these fruits and vegetables would have ceased to exist. Raw Pressery charges Rs. 80/- for 200 ml of juice sold in an extremely attractive bottle. There are juices priced at Rs. 120/- for 200ml as well.

They even have detox plans where they deliver juice (few bottles) home every month for a few thousand rupees. Detox by drinking something is a myth. Detox is done naturally by your kidneys and liver. There are no TOXINS as such in your body if your liver and kidneys are working fine. Juice is not capable of doing anything except supplement your daily nutrition. Once again, hipster products being unscientific in their approach.

I request you all to not fall prey to these Hipster products and bleed your wallet by buying something which is ridiculously overpriced just because it was made in small batches and comes in an attractive package. In the long term however, none of the companies I have stated will survive because they have no business model which is feasible.

– Vipin MK

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