- The nationwide lockdown has given momentum to the online food deliveries in India and has turned out to be a good opportunity for many online grocery startups to cash in.
- The online meat delivery industry has also come out winners.
- On a weekly basis, 48.9% men and 42.8% women consume non-vegetarian food.
- These figures have proved to be appealing for a number of meat delivery startups such as Licious, FreshToHome, and ZappFresh.
“This was done for a brief period of time and all transportation was done as per government permission and permitted vehicles,” Vivek Gupta, co-founder, Licious, told ET Digital.
The nationwide lockdown has given momentum to the online food deliveries in India and has turned out to be a good opportunity for many online grocery startups to cash in. The online meat delivery industry has also come out winners.
According to an analysis of the national health data by IndiaSpend and FactChecker, 70% of Indian women and 80% men consume non vegetarian-food. On a weekly basis, 48.9% men and 42.8% women consume non-vegetarian food. These figures have proved to be appealing for a number of meat delivery startups such as Licious, FreshToHome, and ZappFresh.
“We have witnessed an increase in demand and also in new customer additions. But in the initial days when the lockdown was imposed, it was tough from both supply and delivery point of view. But I am pleased to note that we surmounted this initial hiccup and stabilised it in 4-5 days by working with the authorities. Now we are back to 100% delivery efficiency,” Shan Kadavil, co-founder, FreshToHome told ET Digital.
He explained how operations during this period required extra care of safety and hygiene protocols. The FreshToHome team deep cleaned the vehicles and processing centre premises and equipment twice a day. The firm also regularly monitored the temperature of all its delivery and processing centre personnel.
“We announced no-contact delivery to customers by insisting on no cash-on-delivery payment. Even in pre-corona days we were getting 50% CODs. It was a hard decision, but we took it for the benefit of our customers and our delivery executives,” he said.
Experiencing similar results, Licious has witnessed deliveries go up 2x times with a 30 per cent increase in average order value from customers.
“Across Bengaluru, Hyderabad, Delhi-NCR, Chandigarh, Mumbai, Pune and Chennai, we have witnessed a 300 per cent surge in demand during the lockdown period,” Gupta said.
Gupta claimed that Licious adopted a global standard of food safety and quality management long before the Covid crisis during the initial days of the company. This includes vaccinating workers in production sites routinely every six months and getting frequent health-checks.
The Licious team also took decisive steps when the nationwide lockdown was announced such as housing 600 employees in a resort close to the production center. “Since then, their movement has been restricted to and fro the Licious processing centre only. This ensured that the people handling our products were the safest and most immune,” he said.
Perils of a fresh produce business
Behind the brilliant sales figures of these meat delivery firms during the lockdown lie a myriad of challenges, slightly more pressing than the ones faced by online grocery platforms.
Meat is a perishable product for some 24-36 hours and could not be stocked like some of the groceries. This, along with lockdown restrictions created a problem with sourcing raw materials for meat startups.
“Sea food supply was severely impacted as coasts were closed, but thanks to our network of fishermen in the smaller coasts, we were able to guarantee availability of marine fish. Additionally, our own farms and partner farms in which we have around 2500 tonnes production annually, allowed us to ensure fresh water fish supply,” Kadavil said.
He added that the impact was seen in mutton supply too due to closure of slaughterhouses, however, chicken supply was not disturbed.
Deepanshu Manchandana, co-founder, ZappFresh also agreed to facing the heat of the supply chain blockage.
“Yes, not all products are available, the supply chain is stressed overall due to on ground challenges of permissions and other factors, But things have improved in the last two weeks and gradually as we move forward it is becoming easier and back to the normal,” he told ET Digital.
He added that they also faced problems with managing the blue collar workforce. But, the ZappFresh team soon took steps to ensure pick up and drops for workers, boarding, and lodging.
“Incentives to bring back operation staff, covid insurance and other benefits brought back our team in confidence and back in action,” he said.
According to Manchandana, ZappFresh saw a 700% increase in its web traffic during initial days as people had started hoarding.
One of the common challenges among all businesses was a shortage of manpower as many labourers and delivery workers went home during the lockdown. “In the initial days of the lockdown, we saw a sharp decline in our delivery workforce & it was indeed a test of our business agility,” Gupta said.
Licious lost 50% of its workforce, but was able to hire an additional 300 employees and are now back with 1.5 times of their original capacity.
From this period onwards, both Kadavil and Gupta believe that there will be an increase in demand for quality food and brands which adhere to safety and hygiene norms. This gives an opportunity for the processed poultry meat segment to grow in the country. According to Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG in India, with Covid-19, consumers will prefer to order meat that is untouched by hand rather than buying from the wet markets due to fear of infections.
He told ET Digital that it would also help in optimising operations for meat startups. “As the volumes of processed meat increases, the need for a sustainable and cost efficient supply chain will increase. This will attract larger capacities being created in cold storages, climate controlled vehicles and will bring the cost down on account of economies of scale,” he said.
Room for all
In early March this year, it was reported that the poultry industry in the country was hit hard as rumours linking coronavirus and chicken spread like wildfire through social media platforms. The price of a chicken fell from Rs 80 to Rs 20 and the jobs of two crore people employed in the industry were on line.
This, however, did not impact the sales of Licous and FreshToHome. “Largely customers are evolved to understand that Corona is an airborne virus, though there is a small percentage who stay away from meat during these times. Our customers especially knew we uphold the highest standards of quality in terms of hygiene, packing and sell only no-added chemicals products.” Kadavil said.
Talking on similar lines, Gupta said that there was no adverse impact on its sales following the rumors. “In fact, sales only grew as people started buying better quality and safer food products from trusted brands like us,” he said.
Even for ZappFresh, Manchandana said the impact on sales was temporary, for a week or ten days.
In the meantime, the rumor gave a little push to Udaipur-based Gooddot, an alternate meat startup. “Just before the lockdown, we had seen around 60% of spike in our platform,” said Abhishek Sinha, CEO, Gooddot.
He added that the increase in demand was not just seen in India, but also across other countries as he believes more and more people are looking at plant-based meat options.
“Over time, an organic outreach is happening. People are coming to us and enquiring about different kinds of alternate meat options,” he said.
Apart from a surge in demands, Gooddot has also been able to increase its team during the lockdown.
When asked if people who have shifted their diet to the alternate meat will maintain the same perspective and habits once the lockdown is over, Sinha believes it will be a bit of both.
“The coronavirus is not directly linked to meat and therefore there will always be people who will make an end to the rumors and share the correct knowledge. However, one cannot underestimate the magnitude of the problems the viruses can create. In the US, major meat processing companies have become coronavirus hotspots. The workers there work in unhealthy conditions and under close proximity. Situations like these lead people to explore other meat options,” he said.
2 Comments on this Story
Mahila Utthan289 days ago
Won't stand the return to normalcy, no empty roads anymore for deliveries, high overhead costs.
Mukund Kansal289 days ago
More of a promotional article...