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Indian beverage brand Paper Boat invests $2 million in new R&D centre for independent research

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Paper Boat, the beverage brand of Sequoia-backed Hector Beverages, has set aside $2 million (approx. 13 crores) for carrying its own research in food science and technology. It has developed a new R&D facility near Hoskote in Bengaluru. It has already started work in the facility and the centre will become fully operational in next few months.

Notably, Paper Boat has established itself as a formidable name in traditional Indian beverages within a short period of time. Started in 2013 under Hector Beverages, Paper boat offers natural flavour, ethnic Indian drinks such as Aamras, Jaljeera, Jamun Kala Khatta, Aam Panna, Kokum, Golgappe ka Paani, etc.

Sales of Paper Boat drinks constitue75% of the total sales of Hector Beverages which produces energy drink Tzinga.
Last year, Hector Beverages raised close to $30 million from investors Advent Management and Hillhouse Capital Group. The brand was valued at over $100 million at that time.

Till now, Hector Beverages only worked towards developing recipes, procurement and sourcing of ingredients and processing of beverages at its manufacturing plants. It relied on external agencies and universities for research on food science and technology.

Now with its own R&D centre, the company aims to conduct its own research and introduce more natural flavours at a faster pace. Commenting on the same, CEO Neeraj Kakkar says,

We want to do our own research on the science of food. We are moving from just recipes and chefs to food scientists, who can research on things like what effect chlorophyll has on oxidation.

He further added that the company was trying to make lemon juice with natural flavors. Since lemon is a tough product to handle, people usually make its juice with artificial flavors to increase shelf life. And Paper Boat will research on offering this and similar natural products without compromising on the shelf life.

At present, Paper Boat offers 10 drinks and sells them through 100,000 retail points. It aims to double those points within a year whereas the R&D team aims to develop 35-40 new products. In addition to India, Hector Beverages sells Paper Boat brand to other countries as well such as Dubai, Malaysia, UK and US.

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