A few years ago, when the pandemic hit, India’s fresh meat delivery startups saw demand soaring. Consumers, who were confined indoors, turned to apps for their weekly meat buying. But as life returned to normal, so did their buying habits, that is, most consumers went back to the neighbourhood butcher.
For Chennai-based TenderCuts, one of the early entrants in the fresh meat delivery space, that realisation has led to a sharp turnaround in its business. “Meat and seafood are emotional categories,” says Sasikumar Kallanai, co-founder and CEO of TenderCuts. “People want to see what they’re buying and it is about trust, quality and skill. Even 20 years from now, meat will remain a touch-and-feel category.”
During the pandemic, TenderCuts prioritized rapid online expansion, pursuing high growth much like its venture-backed peers. “We started going online-heavy, and that’s where the real problem started,” he added. The result was mounting losses and a distress sale to Delhi-based omnichannel meat brand Good To Go.
“What we learned is that meat is an offline-first category,” says Kallanai. “It’s primarily a commodity business, so you can’t brand and package it like a premium product. The only way to make it work is to stay affordable and keep your cost structure lean, so that the burden doesn’t pass on to the end consumer.”
With this learning, the company began restructuring two years ago. The focus shifted to smaller, neighbourhood stores with a lean capex model. Each TenderCuts store now operates on a low-cost format, breaking even in under six months, Kallanai says.
Avoiding retail outlets on high streets has helped it keep its rent lower, while it has also reduced manpower and overhead costs substantially. At present, its 18 stores in Chennai act as both a retail and micro-fulfilment hub, so availability and service levels remain consistent.
This restructuring has started to pay off. All TenderCuts stores are now profitable, delivering 12% store-level Ebitda in August and expected to touch 15% by December. The company plans to scale to 50 stores in the city, and then recreate the same playbook in other cities such as Hyderabad and Bengaluru. From Rs 48 crore revenue in FY25, it is on a path to end FY26 with `80 crore in revenue and plans to hit around `230 crore in annual recurring revenue by FY28.
Much of this growth will come from its fast-growing offline sales. TenderCuts’ offline contribution, which was 10% a year ago, has grown to 30% at present, and Kallanai expects it to make up half of its total revenue by the next six months. Customers who come to the store tend to buy repeatedly, Kallanai added. “It’s the same trust-based relationship people had with their neighbourhood butcher, but our stores are more hygienic and transparent.”