How Paper Boat made a profit where nobody else could

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Editor's note: For years, it seemed Hector Beverages had struck gold. Paper Boat, the Bengaluru-based beverage startup’s line of packaged drinks launched in 2013, was wildly popular in the big cities. It simultaneously invoked nostalgia and novelty with local Indian flavours like aam panna and jaljeera as well as standout packaging.  Paper Boat was hailed as a disruptor in a sector until then dominated by apple, mango and orange juices. For Hector Beverages, founded in 2009 by former Coca-Cola executive Neeraj Kakkar, it was a win after two mediocre attempts (a protein-water drink called Frissia and an energy drink called Tzinga). On the back of Paper Boat, Hector Beverages raised more than $40 million from venture capital investors such as Sequoia Capital, Sofina and Catamaran Ventures. Then it hit a wall. The company discovered that the product was too premium to be scaled. Over the years, competition had grown and the company was losing momentum. Commentators began to write it off, and by 2018, many thought the startup would fade away as another also-ran. But Kakkar and his team have finally made …