According to investors, apart from the prospects of earning good revenue one of the interesting things about the food industry is that it is highly scalable and can grow global
The year 2015 is surely emerging as the year of e-restaurants and online food delivery industry in India as more and more startups are sprouting to solve food related problems with their innovative and creative approach which you just can’t ignore. According to a report by Tracxn, out of 145 food tech companies that operate in this country, 66 were launched last year and within a year the food space has grown to such an extent that it is indeed trying to take away the spotlight from the technology and transport segment with more number of venture capitalists investing in this piping hot industry. “Food like travel is a high frequency behaviour and just like e-commerce, consumers look for different options on food and hence discovery and availability of choices are interesting value propositions in food. In other words, food has better prospects than travel and e-commerce combined,” says Amit Anand, managing partner and co-founder of Jungle Ventures.
Be it breakfast, brunch or wellness induced meals, these online food startups have a solution for everything and most of them revolve around the idea of educating the urban population about eating the right kind of food and encouraging them to follow a proper diet. “There is a lack of availability of wholesome and nutritious meals being delivered at your doorstep and startups like FreshMenu and iTiffin are doing well in this industry by using technology and taking this vertical in the startup ecosystem to a whole new level,” says K Ganesh, a serial entrepreneur who recently invested in FreshMenu.
Most of the startups these days focus on the day-to-day crisis that a person goes through and it never fails to amuse us the way they cater to their target audience with their innovative approach. So, when three friends Nikhil Behl, Haripriya Raje and Ashwin Chandrasekaran, realised that skipping breakfast which is the most important meal of the day, is becoming a trend and a serious problem among the young urban population, they decided to come up with Brekkie, a Bengaluru-based startup which aims at serving wholesome and nutritious breakfast at
Within a short span of time, the startup has gained a lot of popularity in Bengaluru and has recently raised their seed investment of an undisclosed amount. “In terms of month-on-month, the company has seen quite a steady growth of 30% and that’s been just based out of Indira Nagar and now we are planning to expand rapidly to other areas as well,” says Ashwin, co-founder of Brekkie.
Another startup which has been in the spotlight for quite sometime is iTiffin. Backed by cricketer Robin Uthappa, this startup is purely based on the concept of providing wellness induced meals. Its founders Tapan Das and Ryan Fernado are constantly working towards providing meals that will help people fight lifestyle-related disorders. Recently they launched a series of wellness products like Munchboxes which are snacks that can be consumed between meals and i-Atta, a special type of flour for diabetic patients. They are in the process of raising $10 million to invest towards pan India expansion.
Box8, a Mumbai-based on-demand food delivery company, hardly invests on mass marketing, according to its co-founder, Amit Raj. “Demand has never been a challenge for us in spite of growing number of players in the food space. This market is young and every startup has its own strategy and approach to capture this industry. Food space unlike other categories is vast and the opportunities that it offers is humongous, so if you have a right team in place then challenges and competition shouldn’t affect you in any way,” adds Amit Raj.
According to investors, apart from the prospects of earning good revenue one of the interesting things about this industry is that it is highly scalable. Companies can launch in Bangalore and then scale to other parts of the country and even globally as most F&B businesses are quite similar. However, Ashwin from Brekkie agrees that cooking food is not as easy as it sounds. “It is easy doing deliveries but getting the food science right is the most challenging part and as you start scaling your business you come across logistical hurdles which tests your ability to balance between the front-end and back-end technology. Tapan Das too shared that retaining customers for a longer period of time is the biggest challenge that he is facing right now as he loses around 2% of his customers everyday due to delayed delivery.
K Ganesh says that retention of customers is this one factor that the F&B industry faces as a whole. “Even if you look at the traditional food industry, they have always been struggling with retaining customers and it still continues to be a challenge for the industry,” he adds.