Technology is not just the backbone of these start-ups — used to monitor what’s happening within the supply chain in real time — but is also used at the front end by customers to place orders (online or via mobile apps).
By Srinath Srinivasan
Branded meat is getting a whole new spin with quite a few start-ups promising fresh, unadulterated meat and seafood delivery within just a few hours. Given the growing aversion among consumers about the use of preservatives and chemicals for the storage of meat, the ‘hygienic and convenient’ proposition is gradually gaining acceptance. The market potential, experts say, could be worth $40 billion.
Brands such as Licious, ZappFresh and Fresh to Home, operating in the chilled meat segment, address every point in the supply chain — from rearing of livestock, butchering and processing, to last mile delivery — in a bid to bring order to this largely unorganised sector. The meat is stored at a temperature of 0-4 degrees Celsius and delivered within 24-36 hours of procurement.
High on tech
Technology is not just the backbone of these start-ups — used to monitor what’s happening within the supply chain in real time — but is also used at the front end by customers to place orders (online or via mobile apps). “Technology lets us monitor the temperature at our processing units remotely, in order to ensure that the meat is handled properly,” says Vivek Gupta, co-founder, Licious.
Technology also helps tackle the demand-supply problems. “Predictive algorithms help us supply during fluctuating demands,” says Shan Kadavil, founder and CEO, Fresh to Home. “Eventually, we can store enough distinct items, category wise, and deliver them when the order is placed. Meat is highly perishable and, using technology, we are able to avoid any wastage.”
Most of these brands have a bulk of their operations in metro cities at the moment, as metros spell high mobile penetration and reach. ZappFresh operates only in the Delhi-NCR region. Licious is also operational in cities like Mohali, Pune, Chandigarh and Panchkula. Fresh to Home claims to also have a presence across Kerala and in the UAE.
Customers’ mobile usage behaviour also offers key insights. “People in Delhi-NCR consume more meat; specifically, chicken. The demand for seafood is low and is sourced from the coastal regions of the South. We use our forecasting algorithms to provide supply exactly as required at fair prices,” says ZappFresh’s co-founder and CEO,
While hyper-local targeted ads and campaigns help in customer acquisition and retention, brands say their growth has mostly been organic, though word-of-mouth. Licious has in-app testimonials for its customers to talk about the overall experience of consuming a product and reviewing a specific recipe. They also have customers’ faces printed on their packaging, with the customer’s consent.
Digital also allows some of these companies to spend as less as 5% of their revenues on marketing. To talk to customers who are not digital savvy, some of these brands have experience centres and have partnered with supermarket chains to sell their products.
As of February 2019, ZappFresh had a customer base of 1.5 lakh with over 90% repeat customers. The company caters to around 1,000 orders per day. During the same period, Licious had close to 3.5 lakh customers, and Fresh to Home had a customer base of four lakh. Licious serves between 5,000-7,000 orders per day, while Fresh to Home serves around 7,000.
Ujjwal Chaudhry, associate director, Redseer Consulting, points out that the online fresh meat segment is at a nascent stage in India. “Deep solutions that address every point in the supply chain, instead of simply following an aggregation model, give these brands an edge.” He adds that the success of these brands depends on how they are able to offer convenience and redefine freshness.
However, this segment is not highly regulated in terms of best practices across the supply chain. At present, FSSAI regulates the quality of the end product. While online players are licensed operators of FSSAI, they follow best practices prevalent in the Middle East and the West when it comes to raising/sourcing livestock and processing their meat.
According to experts, a governing body across the supply chain and an improvement in the cold storage infrastructure could bring in more interest and investment in the organised meat business.