ZappFresh And Licious Are Making An Organized Market Of Meat In India

Is India really a vegetarian country? as it claims. However, as per the Sample Registration System (SRS) baseline survey 2014: “71 per cent of Indians over the age of 15 are non-vegetarian”. So, how can we say that India is a vegetarian country!

The country eats around $30 billion of meat every year and the number is increasing. It is expected to grow faster seeing the growth of the economy, rising per capita income, urban trends, and a rise in the awareness of the nutrition that is provided by meat. But, as per a report, 90 per cent of the meat's demand is handled by the unorganised market in India. However, the rise in factory farming, overuse of antibiotics, and poor production conditions have lower down quality of the meat that we eat.

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Seeing the number of consumption of meat, a few startups by realizing the need to up the quality of meat are here. They are willing to provide meat that’s healthy and traceable.

A Startup: ZappFresh

In 2015, Deepanshu Manchanda and Shruti Gochhwal who were colleagues at Mobikwik quit their job and launch ZappFresh. The co-founder of ZappFresh, Deepanshu says: "We started researching the subject, and soon realized that the gap in the fresh, chilled meat market was huge. The problem lay across the supply chain-smoking from sourcing and quality to serviceability and distribution."

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To launch ZappFresh, Shruti and Deepanshu met with customers, shopkeepers, traders, and wholesalers in the local markets of Gurgaon. And now, their market extends to the five cities: Delhi, Gurgaon, Noida, Faridabad, and Ghaziabad in the Delhi-NCR region. This year, ZappFresh raise $3 million from SIDBI Venture Capital and Amit Burman.

Another Startup: Licious

The other two men too decided to quit their jobs in the same year and started Licious to resolve the meat conundrum. They are Vivek Gupta and Abhay Hanjura. Vivek, Co-founder of Licious, says, “We wanted to put life back into the dead chicken. This was the promise we wanted to bring to the market. We wanted consumers to enjoy meat that was clean, a far cry from the unhygienic conditions in butcher markets.”

Licious raised $14 million from Mayfield Capital and 3One4 Capital, services five cities.

Cold supply chain:

Deepanshu says, "We aim to provide the freshest stock in the fastest way." Hence, they created a supply chain by working with farmers and slaughterhouses delivering chemical-free fresh meat. But, the company denied disclosing their daily numbers. They just said, its omnichannel model works with various partners to ensure transparency and traceability.

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On the other hand, Licious has forged partnerships with 180 vendors, has 27 delivery centres, and an employee strength of 600. It has over 300,000 customers with a minimum of 5,000 who work every day.

Local butchers comprise 95 per cent of the industry and both startups are fighting the unorganised market. Director at PWC, Chetan Anand says, “This is where the costs are when you are creating a new standard in the industry.”

The meat consumption in India is comparatively low. World Bank reports, the US consumes, on an average, 62 kg of chicken per person per year; in India, this figure is at 17 kg per person per year. When it comes to red meat, the US consumes 24 kg per person per year, while in India, red meat consumption is less than 10 kg per person per year.

Revenues:

ZappFresh's revenue for 2017 was Rs 8.5 crore; in 2016, it was at Rs 84 lakh. This year, the company expects a 3x growth in revenue.

On the other hand, Licious raised Rs 12.3 crore in revenue in FY2017 from Rs 1.4 crore in FY2016. They see losses of Rs 18.4 crore for FY2017 and the reason was they are setting up two processing plants – one in Bengaluru and the other in Gurgaon. They had also invested in delivery containers that could manage to transport meat at 4 degrees centigrade.

Licious founders take a salary of Rs 35 lakh each. While Shruti and Deepanshu take a gross salary of Rs 8.60 lakh each which will increase with the new fundraise of $4 million.

Also, Venk Krishnan, Founder of NuVentures, says: “The B2C business in India is still strong. We expect a lot of emerging new brands and businesses in the coming years to focus on verticals rather than horizontals.”

And Deepanshu says, “We recently launched the institutional vertical with a few blue-chip institutional clients such as Lite Bite Foods and Taj. The entire business works through technology, right from sourcing, temperature-controlled supply chain, buying experience through web/app/calls, and last-mile delivery. We make money on each order.”

Both startups are heading to make the organized markets of meat for India.

by Vijay Singh | Thu, Aug 02 - 03:27 PM

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