New Delhi, July 29 -- Homegrown beverage maker Archian Foods Pvt Ltd, the company behind Lahori Zeera and Lahori Nimboo, is pivoting to an asset-light model as the business becomes self-sustaining, a top executive told VCCircle.

Months after commissioning its manufacturing plant in Lucknow, the Mohali-based company has decided that all future capacity expansion will be through co-bottling units rather than company-owned factories.

"Archian Foods has no intentions to grow further via company-owned manufacturing units," said co-founder Nikhil Doda. "Lucknow was probably the last one. Further growth will come via co-bottler units, dedicated facilities for Lahori Zeera, but capex and manufacturing will be done via the bottling partner."

Backed by Belgian private investment firm Verlinvest, Archian Foods was founded in 2017 by cousins Nikhil Doda, Saurabh Munjal and Saurabh Bhutna after an experimental kitchen recipe led to the launch of its flagship cumin-flavoured drink, Lahori Zeera.

Nearly a decade later, the company has clocked a net revenue of Rs 775 crore in FY26, up 45% year-on-year, from just a few crores in FY23. According to Doda, the revenue could have been at least 15% higher if the Lucknow plant had become operational on schedule.

The company began operations at the Lucknow facility in April, adding to its existing plants in Ropnagar, Punjab, and Vapi, Gujarat. This year, it also started operations at five co-bottling units in Bengaluru, Patna, Agra, Muzaffarnagar and Bhopal, taking its total production capacity to over 1.2 crore bottles a day.

Archian Foods follows a 15:85 capex-sharing model with its co-bottlers, helping keep operating costs low.

"We started co-bottling this year, but we have been working on this model for the last two years. This is the only way a brand can grow significantly. If we do manufacturing ourselves, it always hampers the growth story," Doda said, adding that in-house manufacturing involves freight and machinery costs, leading to capital dilution.

The company plans to add seven-eight more co-bottling facilities next year.

Capital needs

The adoption of an asset-light model has also eliminated the need to raise fresh funding.

"The business doesn't require growth capital. As of now, we are growing with the help of co-bottlers, marketing and a little capex. That will continue to happen. We are profitable, the business can sustain itself. So we don't see any liquidation event, and growth capital is not required," Doda said.

Last year, the company raised Rs 200 crore from Motilal Oswal Alternates through a mix of primary and secondary transactions.

Growth amid competition

Despite its rapid growth, the company has maintained the Rs 10 price for Lahori Zeera since launch. However, due to a hike in GST in 2021, it reduced the pack size to 160 ml from 200 ml earlier.

The success of Lahori Zeera has attracted competition from several beverage companies that have also launched their own cumin-based drinks. Coca-Cola sells RimJhim, while Bisleri, PepsiCo and Dabur have launched drinks such as Spyci Jeera, Nimbooz Jeera Soda, and Hajmola Zeera, respectively. Several of these have also slashed prices to Rs 10 to reclaim market share.

The competition does not bother Archian Foods. "We are happy selling at the Rs 10 price point," Doda said, adding that the company has not changed its playbook despite rising competition.

Margins under pressure

However, the company's margins have come under pressure in recent months due to supply-chain disruptions caused by the conflict in West Asia.

"Gross margins have gone down by 4-5% because raw materials have got impacted," Doda said, adding that the company does not intend to pass on the cost to consumers as it views the disruption as temporary.

In FY26, Archian's EBITDA margin stood at around 8-9% compared with 10.1% in FY25. To boost margins, the company is now focusing on premium-priced packs. Revenue contribution from non-Rs 10 SKUs is expected to significantly increase to 15-16% in FY27 from 6-7% in FY26, Doda said. "We intend to have a 60:40 mix where 40% (of revenue) comes from big pack sizes at least after two years," he said.

Archian Foods is targeting Rs 1,200 crore in revenue for FY27. It has already registered 50-60% growth during the April-June quarter, aided by an extended summer and delayed monsoon, indicating likely healthy growth for the full year as well.

The company currently has a strong general trade distribution network across 17-18 states in north, east and west India. Doda says that while general trade remains its core distribution channel, he expects quick commerce to contribute around Rs 100 crore in revenue from next year.

The company is also planning to launch products in the Middle East within the next 12-18 months and is in talks with co-bottlers and distribution partners in the region.

"The idea is to have one-two manufacturing locations in the GCC region because the product has a perfect fit there, given the huge Indian diaspora and favourable weather," Doda said.

Since 2024, Archian has also expanded into institutional sales. It recently received approvals from the Indian Railway Catering and Tourism Corporation (IRCTC) to sell its beverages at select railway stations and is in discussions with the Canteen Stores Department (CSD) to stock its products, Doda said.

The company is targeting a 5-6% revenue contribution from alternative channels this year, and expects this to rise further next year with the addition of more institutional partnerships, Doda said.

Looking beyond Lahori

Lahori Zeera remains Archian's biggest growth driver, accounting for around 89% of revenue, while Lahori Nimboo contributes a marginal 4-5% share.

However, this doesn't concern Doda.

"In FMCG, there are sizeable brands built out of a single SKU. It is a dream of every FMCG house to have a few hero SKUs. With Lahori Zeera, we have come up with a flavour that has connected with the masses across the spectrum," Doda said.

Nevertheless, the company is now looking beyond Lahori and has already launched Aamras packs and expects the product to gain popularity over the next couple of years. Doda also hinted at evaluating entirely new product categories independent of the Lahori umbrella.

"In the future, maybe two years from now, if the mindset is to create a few more brands outside the Lahori umbrella, we have those prototyped: a hydration drink and a flavoured zero-calorie soda. But nothing under Lahori as of now. We are happy growing Zeera for now," Doda said.

Published by HT Digital Content Services with permission from VC Circle.