Startup

Catch and Release: Why are online meat startups still small fry in domestic markets?

Published

4 months ago

September 4, 2024

admin

Meat buying has traditionally been a very hands-on process. Meat eaters generally prefer to personally select the cut, inspect the freshness of the catch, and understand its procurement tactics.

The pandemic brought in a new wave of online-first meat and seafood startups looking to make their mark on the sector, riding on the surge in funding into the Indian startup ecosystem between 2020 and 2022.

Meat distributor Licious turned into a D2C unicorn in 2021, after raising $52 million in its Series G round. It has raised $490 million in funding so far and has a valuation of $1.47 billion as on September 21, 2023, according to Tracxn. Meanwhile, its peer, FreshToHome, also raised $104 million in funding led by Amazon Sambhav Venture Fund in 2023, taking its cumulative funding to $286 million.

However, the meat startup sector’s fortunes has since taken a turn for the worse: consumer preferences have largely reverted back, and online meat and seafood retailers have either had to wind down their operations or continue with heavy losses with zero to little gains to show for it in the topline.

Licious clocked a 9.6% growth in its operating income to Rs 747.7 crore during FY23 from Rs 682.5 crore in FY22. It posted a loss of Rs 500 crore during the same period, marginally up from Rs 485 crore a year ago.

Meanwhile, FreshToHome recorded a revenue of Rs 110.3 crore, resulting in a loss of Rs 409.5 crore.

FreshtoHome did not respond to YourStory’s request for comment.

Expensive cold chain solutions, too much competition in a saturated market, unpredictable pricing, and ultimately, a lack of sufficiently appealing value additions to draw in a larger consumer base are just some of the challenges that dog online-first players, and are compelling them to look at alternative methods to bolster their bottomline.

Muddy waters

One of the biggest problems faced by online-first startups in the domestic seafood and meat market has been their inability to effectively disrupt the traditional supply chain to customers.

While consumers may have moved towards online channels for the convenience of delivery, especially during a lockdown, they now seek physical touchpoints to verify product freshness and that the meat cuts are processed in clean and hygienic conditions.

Mandrita, a Bengaluru-based Product Manager, says, she prefers shopping for her fish specifically from the nearby HAL market as opposed to ordering online.

“There is a larger variety to pick from and you get the option of choosing from a variety of sizes. While I do have to clean the meat afterwards, I know it is freshly cut and sold, moreover it is easily 20% cheaper than online alternatives,” she adds.

This consumer preference, combined with competition from FMCG brands like Godrej, Venky’s, and Nandus, makes climbing the profit peak a little too difficult for the meat startups.

Neighborhood stores do not invest in high-tech tech stack and cold chain infrastructure solutions, allowing for lower operational costs, which in turn enable them to sell at a lower price—a liberty online meat brands cannot afford.

Most players who try to reach their customers through Foodhalls and grocery marts just do it for the brand positioning, as these placements come with steep margins, explains Mark Alzawahra, MD and Founder of seafood wholesaler Catch Of Norway Seafood. Commission fees for Nature Baskets, Foodhalls, and the likes can go as high as 40% and in very rare cases it will go under 25% after hard negotiations, he adds.

Since branded cuts on grocery store shelves are too expensive, online food startups have had to go back to industry roots and set up brick and mortar shops, which come with high capex requirements and fewer neighborhoods which can absorb expensive meat outlets.

As a dire example of this, Chennai-based meat startup Fipola was forced to cease its operations in February 2023, when it failed to raise funds after its aggressive offline expansion.

What’s the catch?

To combat the crunch, meat players are shifting to alternatives to reach customers directly through brick and mortar outlets, including shifting customer bases to supply to businesses (B2B), or looking to export to other international markets.

Typically, in the food industry, clients of a B2B business include restaurants, hotels, caterers, or other marketplaces that place orders.

An increasing number of online meat startups are pivoting to this model to keep revenue up, as is the case for online seafood firm Captain Fresh, which sources directly from farms and fishermen and distributes to other retailers.

“This industry doesn’t need a B2C channel or a brand, because there is already a lot of real estate that the world has allocated for this product. If you walk into a retail chain across US or Europe, close to 30-35% of the overall floor space is allocated for meat, seafood,” says Utham Gowda, Founder, Captain Fresh.

Early on, Captain Fresh realised that a B2B channel was the only scope for growth in this industry. It later shifted its focus entirely to a B2B model outside of India.

Meanwhile, Gurugram-based ZappFresh sees a nearly 50-50 distribution in its B2B and direct-to-consumer (D2C) channels. It plans to clock a revenue of Rs 160 crore in FY24-FY25 with a significant jump in profit after tax, something its peers are yet to manage.

“While offline may look very promising and lucrative, it is extremely complex to crack that as well. And running and owning a store may not be the right format to build a profitable business in this space,” notes Deepanshu Manchanda, Co-founder and CEO of Zappfresh.

“As a business, you would want to liquidate the stock in time, it is a challenge to hold the inventory for a long period especially when the product is perishable. A B2B channel allows us to liquidate unsold inventory and bring more equilibrium across the board,” he adds.

Moreover, while seafood is a price-sensitive commodity, the industry, however, works on a mostly fixed-price basis. Therefore it is crucial for distributors to have a large enough base to mitigate any fluctuations in the distribution chain on the retail level.

Fluctuating market prices is a concern, especially for premium seafood like salmon, where market prices update every week globally.

“In India, domestic seafood prices are subject to daily or weekly fluctuations, largely influenced by seasonality, weather conditions, and availability of appropriate sizes to be caught and sold. Since hotels and restaurants update their menus quarterly or semi-annually, they prefer to enter into contracts to maintain price stability and stay competitive,” Alzawahra says.

A large base requires an even larger logistics channel. It is particularly difficult when the commodity is prone to spoilage if not stored properly and has a short shelf life.

Industry executives believe that a fragmented cold chain is one of the biggest challenges that needs to be addressed, as it allows companies to establish equilibrium with fluctuations in pricing and food inflation.

Long way from home

With the domestic market fraught with so many challenges, seafood players are looking towards thicker wallets across the sea.

Seafood is one of the biggest categories of export in the country. India exported 17,81,602 metric tonnes of seafood worth Rs 60,523.89 crore ($7.38 billion) during 2023-24; and exports improved 2.67% in quantity terms during the same period. The USA and China are the major importers of India’s seafood, according to the Indian Ministry of Commerce & Industry.

Online startups are vying to cash in on this significant revenue stream. The Indian market accounts for less than 10% of Captain Fresh’s total revenue. Its peer, FreshToHome, which picked up its latest bag of funds to expand its GCC and international operation, is also relying heavily on its global businesses.

“The take rates, the margin profile that you have in the international markets is very different compared to what you have in the Indian market. And if you have access to supply, you are better off chasing markets where monetisations are higher compared to markets like India,” adds Captain Fresh’s Gowda.

Meanwhile, Zappfresh, which recently acquired Mumbai-based Bonsaro and Bengaluru native Dr. Meat to expand its operation across Western and Southern regions, respectively, is now looking to expand to the Middle East in a format similar to its domestic markets.

Most of the biggest buyers globally in the meat sector are hotels and restaurants, and this provides the bulk of the volume for imported meat and seafood.

“The feasibility of online models in global markets depends on several factors. For one, the ability to adapt to diverse regulatory requirements and establish a reliable cold chain infrastructure is crucial,” says Prateek Toshniwal, Partner–MICS International & Co-founder, IVY Growth, and an investor in Zappfresh.

“Additionally, leveraging online platforms allows for efficient market entry with lower overhead compared to traditional retail setups,” he notes.

Source link

Post Views: 57

Startup

Delhi, Dehradun top the spending trends on Instamart: Swiggy

Published

2 hours ago

December 26, 2024

admin

According to Swiggy‘s fourth edition of its annual ‘How India Swiggy’d’ report, the biggest spenders in 2024 on its quick commerce platform, Instamart, hailed from Delhi and Dehradun. The users spent Rs 20 lakh each on Instamart.

This year, quick commerce grew exponentially, with Indians ordering items ranging from groceries, makeup and toys to vacuum cleaners and sexual wellness products on the 10-minute delivery platform.

The Diwali season also saw orders of over Rs 45 lakh on Instamart on brooms across India to clean houses and Rs 4.6 lakh on poker chips from Delhi. Delhi also ordered Rs 60 crore worth of noodles.

The report added that a person from Ahmedabad spent about Rs 8.3 lakh on gold coins on Dhanteras.

Bengalureans topped in the pooja and party essentials categories, competing with Mumbai, and ordered 1.8 times more wine and shot glasses, especially during the Diwali season, the report found.

A Mumbai-based pet-lover spent more than Rs 15 lakh this year on pet supplies, primarily dog and cat food. Meanwhile, a Chennai user spent Rs 1,25,454 on electronics, electricals and home appliances, including gaming earphones, smartwatches, an induction cooker, a sandwich maker, and a hair straightener. A mango lover spent Rs 35,000 on the fruit in May.

The most ordered items between 4 AM and 7 AM were milk, veggies, and eggs, while ice cream, cold drinks, and chips took over from 10 PM to 4 AM. Between 8-9 PM, the country ordered the most sanitary pads, and November saw the most orders of pain relief medication/spray.

Incognito mode on Instamart was introduced earlier this year. The report noted that most ordered items with the option were between 10-11 pm and included Masala-flavoured chips, Kurkure, and flavoured condoms, the report said.

The quickest delivery was completed in 89 seconds, covering a distance of 180m, the report added, while the cheapest order came in at Rs 3 for a pencil sharpener bought at 8:15 PM in Hyderabad.

The Rakhi season saw 2,85,000 deliveries under ‘order for others,’ and 273 chocolates ordered per minute with one user from Mumbai ordering 31 rakhis in a single order.

Canada saw the most international logins, followed by the US, Kuwait and Singapore ordering milk, dosa batter, and water.

Source link

Post Views: 1

Startup

Startup news and updates: Daily roundup (December 26, 2024)

Published

3 hours ago

December 26, 2024

admin

EatSure launches multi-restaurant group ordering

EatSure, the flagship D2C platform of Rebel Foods, has launched its multi-restaurant group ordering feature.

EatSure’s “Food court on an App” now allows users to create shared carts, and order from multiple restaurants in a single transaction.

“While group ordering features existed before, no one solved the challenge of letting users order from multiple restaurants in one order, making EatSure’s solution truly revolutionary,” the company said.

The feature is live across more than 75 cities across India including Mumbai, Delhi, Bengaluru, and Hyderabad and other prominent urban cities, it added.

“The new group ordering feature aligns with the same, wherein we let a group of friends/family members to build a joint cart by adding products from their choice of restaurants, such that everything gets delivered to them in One Order. It’s more than just ordering food; it’s about connecting people through a shared culinary journey,” said Sagar Kochhar, Co-founder and CEO, EatSure, Rebel Foods.

Zypp Electric enters into a partnership with e-Sprinto

EV-based last-mile delivery service Zypp Electric has entered into a strategic partnership with e-Sprinto, an electric two-wheeler company.

This partnership comes with an aim to deploy 30,000 e-Sprinto high-speed electric vehicles into Zypp Electric’s fleet over the next three years, the company said.

The collaboration is also set to focus on providing top-tier after-sales service and support to the pilots, ensuring the fleet’s reliability and longevity, it added.

“This collaboration allows us to enhance our fleet with 30,000 advanced e-scooters, directly addressing the urgent need for sustainable logistics solutions in India’s booming ecommerce market. Together, we are not only empowering delivery partners to improve their livelihoods but also leading the charge towards a greener future for urban mobility with good quality EVs suitable for delivery purposes and growth,” said Rashi Agarwal, Co-founder and CBO Zypp Electric.

Evocus appoints Pramod Joshi as head of retail sales and export

Evocus onboarded Pramod Joshi as Head of Retail Sales and Export. Prior to this, Joshi held a leadership role at AB InBev, where he spearheaded strategic sales initiatives and route to market.

“His remarkable experience and track record in the FMCG sector make him the perfect fit to lead our sales retail and export functions. Pramod’s deep expertise in sales strategy, market expansion, and digital transformation will be invaluable as we continue to scale Evocus globally and further establish our leadership in the wellness and beverage industry,” said Akash Vaghera, Founder and Director, Evocus.

“Evocus has a unique positioning in the wellness and beverage space, and I look forward to leading the sales efforts to expand its reach both within India and internationally,” said Joshi.

Having begun his career with Cadbury, over the years, he has held various leadership roles at Narang Group, Soulfull, and Twinings, driving market expansion and building strong partnerships with key retail accounts, the company said.

foundit makes 3 leadership appointments

Jobs and talent platform and Quess company foundit has appointed Pranay Kale as Chief Revenue and Growth Officer, Anupama Bhimrajka as Vice President of Marketing, and Tanesh Arora as Vice President of Candidate Services.

In his new role, Kale is set to lead sales across the APAC and Middle East regions, focusing on growth and operational excellence, the company said. Prior to this, he was the Vice President of key accounts at LeadSquared.

Bhimrajka is set to lead the marketing function at foundit as the Vice President – Marketing, driving growth across the APAC and Middle East regions. She was the Head of Consumer Marketing at Lenovo India Prior to joining foundit.

In his new role Arora will oversee Candidate Services, enhancing user experience and operational excellence, the company said. It added that prior to this appointment, he scaled foundit’s consumer business as General Manager and later drove growth at ISDC Global.

“Their combined experience and expertise will be instrumental in driving our next phase of growth and innovation. Their guidance will be invaluable to the team as we continue to connect top talent with leading organisations,” said V Suresh, Chief Executive Officer at foundit.

(This article will be updated with the latest news throughout the day.)

Source link

Post Views: 1

Startup

5 Things you must stop doing before 2025 for success

Published

4 hours ago

December 26, 2024

admin

As we gear up for 2025, there’s no better moment to pause and acknowledge our journey so far while setting the stage for an even brighter future. For entrepreneurs, the weight of countless responsibilities can often lead to burnout and hindered growth.

But success isn’t solely about cramming more into your day; it’s about shedding the habits that hold you back. Here are 5 actions to eliminate before 2025, ensuring you’re not just surviving, but thriving on your path to success!

5 things you need to stop before 2025

1. Say no to too much hustle: Focus on what matters

The hustle culture is everywhere, but that doesn’t mean you have to follow it blindly. Constantly chasing new opportunities, attending every networking event, or agreeing to every business idea can overwhelm you.

Instead of trying to do everything, focus on what truly makes a difference. Evaluate your goals and activities: which ones bring you closer to success, and which are simply distractions? You can free up time and energy for what matters by saying no to unnecessary hustle.

2. Say no to overworking: Work smarter, not harder

Overworking is frequently misunderstood as dedication, but it can lead to burnout and decreased efficiency. Rather than simply extending your work hours, aim to work smarter. Optimise your tasks, automate repetitive tasks, and delegate whenever possible.

Hiring the right team members or investing in tools that facilitate scaling can significantly enhance your productivity. Your goal should be efficiency, not just effort.

3. Say no to the fear of failure: Embrace risks

Many entrepreneurs fear failure and tend to avoid taking risks. This fear keeps them stuck in their comfort zones and prevents them from seizing growth opportunities. In 2025, stop allowing fear to dictate your actions.

Every successful entrepreneur has encountered setbacks, but what truly matters is how you respond to failure. Instead of shying away from risks, embrace them as valuable learning experiences. If you want to grow your business, you must be willing to step outside your comfort zone and make bold decisions.

4. Say no to procrastinating: Take action today

Procrastination is a significant obstacle for many entrepreneurs. Whether it’s the fear of making the wrong choice or feeling overwhelmed by a long to-do list, delaying tasks can seriously slow your progress. This is why itt’s crucial to stop postponing important decisions and responsibilities.

In 2025, commit to take immediate action. Break large tasks into smaller, manageable steps, and address them one at a time. The key to success lies in consistency, which begins with taking action today rather than waiting until tomorrow.

5. Say no to burnout: Prioritise your mental health

Entrepreneurs are known for their relentless drive and dedication, but this often leads to one major issue: burnout. Overworking yourself and neglecting self-care can be a recipe for failure.

Remember that it’s crucial to take breaks and relax, as these practices are just as important as any business meeting. Remember, a well-rested mind is significantly more productive than one that is on the brink of exhaustion. Prioritising your health and mental well-being is important for achieving success.

Closing thoughts

As we enter 2025, remember that true success is not simply about putting in more effort; it’s about working with clarity and purpose. Stop overworking, fearing failure, and hustling without a plan. Instead, focus on rest, intention, and taking smart actions that align with your long-term goals. Here’s to a productive and successful year ahead!

Source link

Post Views: 0