Godrej Nature's Basket: when evolution is done wrong
Video killed the radio star. Then, video went from large TV screens to smartphone screens. Pedal power went to combustion engines to electric vehicles. Local stores became supermarkets, then went online. Actually, everything went online (sadly even social communication). The point is evolution. Natural evolution, not forced evolution.
And forced evolution is what did Godrej Nature’s Basket (GNB) in. Its start, in 2010, was focussed enough - one store, in an upmarket region in Mumbai, selling only premium gourmet food items like artisanal bread, wine and imported cheese. Then came the expansion over the years. To New Delhi, Pune, and other cities. To selling private-label brands and going online.
So far, so natural. Coupled with revenue growth that was picking up.
Then came 2016-17, and with it ‘GNB Refresh 2020.’ A marketing tagline that essentially meant the brand took a 180° spin - from a 'World Food Store' to a 'Daily Food Delights' store. It became a neighbourhood store that sold fresh food items, sundry products like detergent, and some gourmet food.
And things went downhill. In fiscal 2018, GNB's revenue fell for the first time ever.
“They (Godrej Industries) did not know what to do with the GNB business. They did not have a clue on how to scale it,” says one industry executive. “Godrej should have sold GNB in March 2016.”
That sale happened this May, to Spencer’s Retail, which, an analyst says, hopes to turn the chain profitable in 2020. Ironically, that is the same deadline Godrej had in mind for GNB 2.0.
Rozelle sifts through the ashes of GNB to piece together what went wrong. How a much-hyped upgrade turned out to be a downgrade. A story of forced evolution and its pitfalls. Enjoy reading: https://the-ken.com/
And forced evolution is what did Godrej Nature’s Basket (GNB) in. Its start, in 2010, was focussed enough - one store, in an upmarket region in Mumbai, selling only premium gourmet food items like artisanal bread, wine and imported cheese. Then came the expansion over the years. To New Delhi, Pune, and other cities. To selling private-label brands and going online.
So far, so natural. Coupled with revenue growth that was picking up.
Then came 2016-17, and with it ‘GNB Refresh 2020.’ A marketing tagline that essentially meant the brand took a 180° spin - from a 'World Food Store' to a 'Daily Food Delights' store. It became a neighbourhood store that sold fresh food items, sundry products like detergent, and some gourmet food.
And things went downhill. In fiscal 2018, GNB's revenue fell for the first time ever.
“They (Godrej Industries) did not know what to do with the GNB business. They did not have a clue on how to scale it,” says one industry executive. “Godrej should have sold GNB in March 2016.”
That sale happened this May, to Spencer’s Retail, which, an analyst says, hopes to turn the chain profitable in 2020. Ironically, that is the same deadline Godrej had in mind for GNB 2.0.
Rozelle sifts through the ashes of GNB to piece together what went wrong. How a much-hyped upgrade turned out to be a downgrade. A story of forced evolution and its pitfalls. Enjoy reading: https://the-ken.com/
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