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‘Meating’ demand – The Financial Express


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The online meat delivery market has seen significant growth during the pandemic. According to RedSeer, this market, which was worth Rs 700 crore in 2019, has more than tripled in size in 2021. However, online meat delivery companies hold only 1% share of the total meat market in India, which is largely unorganised. Players such as Licious, Zappfresh, FreshToHome, TenderCuts and Meatigo command around 80% of the online meat market, while e-grocers like BigBasket and Milkbasket hold the rest. Most of these companies have seen a big jump in sales during the pandemic.

Raising the ‘steaks’

Licious has over 300 SKUs of fresh meat, seafood, and eggs, along with a ready-to-cook (RTC) and ready-to-eat (RTE) portfolio. The brand expanded its RTC category in the past few months to include regional delicacies like chicken ghee roast in Bengaluru and kosha mangsho in Kolkata, and a range of crumb-coated snacks and tandoori items. Licious’ RTC and RTE businesses contribute 20% to its total revenue. The brand’s current revenue run rate is about Rs 1,000 crore, and it is aiming to touch Rs 2,500 crore by the end of this fiscal.

Licious plans to expand to 20 more cities, from the current 14, in the next six months. “Domestically, our expansion plans entail tapping into emerging tier II and III markets. Global expansion is also in the offing,” says the company’s spokesperson.

To keep up with the uptick in sales, FreshToHome plans to add new products under its RTC and RTE categories. “These currently contribute less than 3-4% of the total revenue, and we expect this to be about 15% in the next 12 months,” says Shan Kadavil, the company’s co-founder and CEO. Also on the cards are offline expansion — about 100 new stores across India in the next 12 months — and building a presence in Riyadh, Muscat and Doha in the next three months.

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TenderCuts, which currently has 54 stores, plans to touch the 100 stores mark by March, 2022. Having established a presence in Chennai, Hyderabad and Bengaluru, the brand is planning to make inroads into Delhi, Mumbai, Pune, and Coimbatore by next year. “We serve over 10,000 orders per day, and the average ticket size is Rs 550. About 70% of orders come from our D2C channel; the rest, from our offline stores,” says Nishanth Chandran, founder and CEO, TenderCuts.

Making the cut

Around 90% of the meat market in India is unorganised. These online meat delivery companies, hence, have a lot of ground to cover. Anand Ramanathan, partner, Deloitte India, says, a large proportion of the youth is showing higher inclination towards meat consumption, driven by increasing focus on protein intake to stay healthy, which is good news for these brands. “Also, the safety and hygiene elements, which have been the key value propositions of some of the leading players, have further boosted consumer confidence in shifting to online,” Ramanathan adds.

However, lack of sufficient cold storage infrastructure, high cost of last-mile delivery and price sensitivity of customers leading to poor customer loyalty are some of the key challenges these meat delivery start-ups face.

“The growth of these players depends on how strongly they can control their supply chain — of poultry, seafood, and meat,” says Ankur Pahwa, partner at EY. In order to scale up, he says, these players would need to consider adding plant-based meat to their portfolio, expanding RTC and RTE categories, providing adjacent products like eggs, cheese, etc, along with specialised offerings for festivals and region-specific customisations of meat.

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The near-term growth for these players is expected to come from metros and tier I cities. However, analysts say, there is significant potential in tier II towns as well, which could be unlocked by way of a strong offline presence in these markets.

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