The pandemic has given online meat delivery platforms such as Licious, Zappfresh, TenderCuts and FreshToHome some much-needed impetus. According to a recent report by RedSeer, online meat delivery grew 2.5-3 times during January-September 2020. In a bid to tap this growth, online meat delivery platforms have expanded their product portfolios. In July 2020, Licious expanded its ready-to-eat (RTE) offering by introducing a prawn-based spread, while Zappfresh launched RTE products like meatballs and chicken momos. TenderCuts and FreshToHome have almost doubled their stock keeping units (SKUs) in the ready-to-cook (RTC) category.
Rohan Aggarwal, director, RedSeer, says that the monthly gross merchandise value that online meat delivery players were clocking in the pre-Covid period was over Rs 58 crore; this grew to Rs 150-175 crore in September 2020. Dedicated meat delivery platforms, such as the ones mentioned above, command over 80% of this market, while companies such as BigBasket, Swiggy and Milkbasket occupy the rest.
Their move towards RTE and RTC categories, analysts say, is an attempt to gain better margins — fresh meat products offer these platforms abysmally low margins (in single digits), whereas RTE and RTC products usually offer a profit margin of 10-15%.
Party platter
The surge in at-home consumption of food has meant more takers for RTE and RTC products. Meat delivery companies are tapping into this demand by telling customers about their ‘healthy products’, which are free of chemicals and preservatives. Most of the products are being tailored for the young customer base that tends to cook less at home and wants a hassle-free experience. Zappfresh, for instance, has introduced bulk packs (two to three kg) and party packs of its products to cater to this target group.
Oil-free RTC products are also in high demand. “India did not have a barbecue culture earlier; but, of late, we have seen products that can be grilled or barbecued being bought increasingly,” says Shan Kadavil, CEO and co-founder, FreshToHome. The company has doubled its SKUs in the RTC category from 60 to 120 in the past few months. This category now contributes 6-7% to its monthly revenue of Rs 50 crore, up from 1.5% in the pre-Covid times.
TenderCuts, too, has 80-90 SKUs in the RTC category, compared to 45-50 in the pre-pandemic period. It has seen sales from this category increase to 14%, compared to 4% earlier.
To encourage trials, FreshToHome offers its RTC products in small packs — 150 gm for Rs 99; while TenderCuts offers free samples to customers who buy meat from its platform.
Sustaining demand
Because the uptake of RTC and RTE products has been largely driven by the pandemic, these companies will have to ensure that the demand sustains even when dine-in resumes in full swing.
Aggarwal of RedSeer estimates that the dine-in business will return to 80% of pre-Covid levels by April-May.
Taking cognizance of this, online meat delivery players have priced their products 15-30% lower than restaurant dishes. For example, TenderCuts’ Madras Chicken 65 is priced at Rs 150 for 400 gm, while Zappfresh’s products are available for Rs 150-300. “It is more economical for a customer to order from us than from a restaurant,” says Nishanth Chandran, founder and CEO, TenderCuts.
Satiating the palate of consumers across the country with varied preferences will be key for these platforms. “Every region has its flavour preference for products like chicken tikka or tandoori; these brands need to customise their offerings accordingly,” says Amarjeet Singh, partner, KPMG India.
Ensuring consistent quality in their offerings would also be crucial but challenging as they expand their operations in the country.
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