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How Did Forest Essentials Translate Opportunity into a Positive EBITDA Business?

Author

Chintankumar Maisuria
January 13, 2025

Read time: 3 minutes.

Welcome to the 89th edition of The Growth Elements Newsletter. I write an essay on growth metrics, experiments, and business case studies every Monday and sometimes on Thursday.

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Ayurveda + Premium (Product, Packaging, Experience) = Forest Essentials

Forest Essentials sits on the gold mine, with huge TAM and high AOV and LTV.

How did they translate this opportunity into a positive EBITDA business?

[1] ๐”๐ง๐ญ๐š๐ฉ๐ฉ๐ž๐ ๐Œ๐š๐ซ๐ค๐ž๐ญ ๐๐ž๐ง๐ž๐ญ๐ซ๐š๐ญ๐ข๐จ๐ง

  • Forest Essentials recognised the unexplored potential in Indiaโ€™s premium Ayurvedic segment.

  • With products priced from โ‚น500 to โ‚น8,000, Forest Essentials strategically positioned itself in the upscale market, contributing to the โ‚น74,800 Crore Indian Ayurvedic market.

[2] ๐‹๐ฎ๐ฑ๐ฎ๐ซ๐ข๐จ๐ฎ๐ฌ ๐๐š๐œ๐ค๐š๐ ๐ข๐ง๐ 

  • By investing in meticulously designed packaging, Forest Essentials elevated the consumer experience.

  • โ‚น800 soap and โ‚น5000 creams signify their commitment to premium presentation and hint at high AOV.

[3] ๐’๐ญ๐ซ๐š๐ญ๐ž๐ ๐ข๐œ ๐ƒ๐ข๐ฌ๐ญ๐ซ๐ข๐›๐ฎ๐ญ๐ข๐จ๐ง

  • Forest Essentials ensured exposure to its target demographic through premium distribution locations, such as luxury hotels and iconic landmarks.

  • This strategic positioning likely allows for a higher CAC budget.

[4] ๐€๐ฎ๐ญ๐ก๐ž๐ง๐ญ๐ข๐œ ๐๐ซ๐š๐ง๐ ๐๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ข๐ง๐ 

  • Leveraging traditional Ayurvedic formulations and local narratives, Forest Essentials differentiated itself, positioning its products as premium and sourced from natural origins, justifying higher price points.

  • With this narrative and price range, we can expect that LTV could be substantial within the niche market segment.

[5] ๐‘๐ž๐ญ๐š๐ข๐ฅ ๐„๐ฑ๐ฉ๐ž๐ซ๐ข๐ž๐ง๐œ๐ž ๐š๐ฌ ๐š ๐ƒ๐ข๐Ÿ๐Ÿ๐ž๐ซ๐ž๐ง๐ญ๐ข๐š๐ญ๐จ๐ซ

  • Elevating luxury standards with each store, aligning with its premium product offerings.

  • This focus on curated retail experiences likely contributes to higher customer retention rates and increased LTV.

[6] ๐‹๐ข๐ฆ๐ข๐ญ๐ž๐ ๐ƒ๐ข๐ฌ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ 

  • Forest Essentials cultivated customer trust and loyalty by refraining from frequent discounts, reinforcing its elite status and preserving brand integrity.

๐…๐ข๐ง๐š๐ฅ ๐–๐จ๐ซ๐๐ฌ

  • With a premium pricing strategy and limited discounting, Forest Essentials can allocate considerable revenue towards acquiring high-value customers and expecting a high LTV.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria