15 Months Without Refrigeration?! This Startup Thinks It Can Go Global 🥥 #FoodTech #Startups

And what's the shelf life?

15 months.

15 months?

No way.

It can sit there on the shelf? It has to be refrigerated, right?

Nope. 15 months ambient, but served chilled and shaken.

By the way, Doreen here said that my eyebrows look like they come off a coconut. Let's bring out our first entrepreneur. Dulara De Alves from Newt's Coconut Smoothies. Give us your pitch.

When I initially walked in, I felt calm. Tim smiled, and so did the other judges, Jurani and Lav. So I felt good about the start. I would like to introduce you to Noots, the world's first coconut smoothie range, packed fresh right here in Sri Lanka using organic coconut milk as a base and 3 tropical fruit ingredients. What we saw was a lack of a dairy-free alternative with an entirely coconut milk base. But now, why is that important? Other than the mere fact that the coconut industry is trending, it is the only plant-based milk that has the same healthy fats as mother's breast milk. So we decided to start an R&D process to upscale what we had at the time of formulation, to apply technology that was not previously used in Sri Lanka. And now we're working closely with the distributor to aggressively enter the retail and online market.

So why is this different? Why are you special?

They did stop me at, well, the 30-40% mark to ask several questions. So this is the only coconut smoothie in the world, only dairy-free, plant-based drink with a coconut milk base. Zero preservatives, as well as 3 tropical ingredients right here.

Now, when we were in India, we cut off some coconuts and drank them, and some were just watery and some was the sweet kind. What kind do you put in there?

I think there was an initial misconception that it was a product based out of coconut water, which it is not. To be honest, this is entirely different from water. The whole market is flooded with coconut water. If it's coconut milk, it's used for either cooking or baking, never as a dairy alternative. Say all your ingredients are locally sourced, or we do add about 2 to 3 grams of organic cane sugar. Just 3 organic ingredients: organic coconut milk as a base and the natural fruit which we source fresh, and about 2 to 3 grams of organic cane sugar.

Now you have a couple of SKUs there.

We have 3 SKUs.

What are they all about?

Real Mango, Real Pineapple, and Real Papaya.

And in Sri Lanka, you know, it's A smoothie, just making a smoothie, it takes about 30 seconds, like 40 seconds or whatever. Why would a person pay extra?

You have to first try it. Always be prepared for something outside the presentation. First one is the mango.

It's like a tequila shot, love. Just bottoms up. Cheers.

When they tried the products, what was in my mind, actually what I wanted them to feel was As if they just made it at home.

That tastes like a coconut smoothie.

It's nice.

Just like you made it at home, right?

Oh, I see what you're saying, is that it has that—

Natural ingredients, all sourced fresh. I think we've convinced them.

What are your plans? How are you gonna distribute this?

Through 3 channels: retail, food servicing, which is Horeca— hotels, restaurants, cafes— and the last one being online. The Sri Lankan market is very small and the per capita consumption is too low. But when I was in Germany, What I saw was people were buying it at €2.35. 2 pallets sold out just in 10 days. The market is out there.

And your cost to make it was what?

So we have about a 50% gross margin.

So 50% on when you go direct?

No, no, no, no, no. Actually 50% when we go through a distributor who then sells it to a retailer who then sells it to the consumer.

You spoke about 20% GP margin earlier on.

That was our current business.

Is this business structured as a separate corporate entity or as a roll-up of your—

It's a trademark owned by the company.

So you're raising this capital in the holdco or for the Roots?

That's up for discussion. Some of the questions that they needed clarification included more details about the parent company that we launched Notes through. It is good that they asked. The way we presented it, it is very much possible to confuse both. But it was important for us to convey that we were just more than a startup. We are proven entrepreneurs.

Well, is there growth in the base business? Is there a hope, or is this where all the juice is?

Sure.

So the base business is what we grew from 4 years ago, $250,000 to $2 million in the last financial year. So not that there isn't growth, but it is a cyclical industry.

And how did you get started? Did you have money?

So I pitched to an angel investor and a plantation owner who backed me, and then we started off. So we are also number 1 now on Google for B2B queries. So if you type most places in the world coconut oil exporters in Sri Lanka, we come to the top.

So you don't want to expand in Sri Lanka given the market is very small and you're only focusing on the export?

Well, the potential for this market— so if you look at the world dairy alternative market, it's $35 billion, and we believe we can dominate the industry with this product.

Are you starting just distributing within Sri Lanka? Sri Lanka, or are you trying to go worldwide? What are you trying to do?

Worldwide is the ultimate objective. In Sri Lanka, we'll sell it in pockets.

So you start here and then move out?

Yes, we're already selling in Sri Lanka at a few upscale, like Good Market, English Cake Company.

And what's the shelf life?

15 months.

15 months? It can sit there on the shelf? It has to be refrigerated, right?

Nope. 15 months ambient, but served chilled and shaken.

By the way, Rini here said that my eyebrows look like they come off a coconut.

Doesn't this resemble his brows?

Terrific. Well, thank you so much for coming and being on Meet the Drapers. Looking for great things from you.

And focus on the local market also, but because we need to create— you can create a lot of job opportunities.

You know, we are further inspired and motivated to continue on our Noots journey, knowing that even the 3 judges, they like the product. Just the Draper Show and the world knowing about Noots Coconut Smoothies and perhaps also wanting to try it is also something that we very much look forward to. We believe we have an opportunity here to scale what could be a unicorn.

Coming up on Meet the Drapers. Who's the CEO?

We're actually in the process of hiring, like, a CEO.

Why aren't you CEO? Welcome back to Meet the Drapers.

Being an entrepreneur anywhere in the world has its risks and rewards.

It's a whole package being an entrepreneur in Sri Lanka. It has been a very challenging journey for a lot of us here.

It is no secret that, you know, we, our country as an entirety is going through a financial meltdown. Obviously there's a misallocation of resources and there's lack of efficiency. Doing business can be a little bit harder, But it proves your mettle.

If you really want to solve a problem, this is the perfect test ground to solve that problem.

I would say the businesses that are being built here are resilient for anything that can be thrown at them.

If you can overcome it, the feeling of being successful as an entrepreneur in Sri Lanka is very high because entrepreneurship rate in Sri Lanka is very low.

It's a perfect testbed. I think there's pros and cons and more pros than cons. Which is why I'm here.

So what'd you think? You can go to meetthedrapers.com and you can check it out. Well, love, what did you think of this company?

I love the energy Dulara had. It looked like he came from conviction, and the product is super. The pineapple coconut milk was absolutely brilliant, so I like that.

How about you, Urania?

We Sri Lankans, making a smoothie at home is like It's so easy. So for him to push it to the local market, I, I think it's a bit of a challenge. But Sri Lanka is a tropical country, so the market is out there. But I think he should focus on Sri Lanka also because he can create a lot of job opportunities for a lot of people. But I love the product. It tastes— it's actually like a homemade smoothie. I will buy it.

It's about $2.50. How does that feel?

1,000 rupees for a smoothie? A little high. But anyway, now the fruit prices also have gone up in Sri Lanka. So I think it's a reasonable price.

A little bit on the upper edge for a non-alcoholic beverage.

You know, your first comment about, well, what about the base business? Which one am I backing?

Absolutely.

Those are always kind of a big issue, making sure that we get the entrepreneur completely focused on the one thing we're backing.

Absolutely. I'm pretty concerned about whenever I'm looking at— I don't look at holding company structures. I want to look at individual corporates when I come and invest in them.

Well, let's bring on the next entrepreneur. But before we do, let's see what's going on behind the scenes. I've actually been behind the scenes now.