How a bunch of start-ups are disrupting the traditional poultry, meat industry

Non-veg lovers in the country always love to get meat, chicken and fish from the neighbourhood. But, this is changing as a bunch of start-ups are disrupting the space, addressing a growing demand for quality non-vegetarian food products that are processed neatly.

The emergence of Licious, one of the early players in the online meat segment, as a unicorn last week stands as a testimony to a silent revolution that is transforming the poultry and meat industry. The Bengaluru-based direct-to-consumer fresh meat start-up raised $52 million last week at a valuation of $1 billion.

The new breed of start-ups, which also include Meatigo, FreshToHome, Zappfresh and Tendercuts, account for just under one per cent of the ₹80,000-crore poultry products business. This is expected to go up to 3-4 per cent in the next two years. The overall pie, however, is much bigger with the opportunities in the meat and fish segments.

Need for quality products

Pankaj Makkar, Managing Director of Bertelsmann India Investments, an early investor in Licious, felt that the non-vegetarian food market was ripe for disruption.

“It is an unstructured and unorganised market, dominated by small time retailers and butchers. People want a quality product, necessitating players like Licious,” he told BusinessLine. He likens it with the transformation that the dairy industry industry underwent two-three decades ago after the advent of Amul.

Though some organised players like Godrej Agrovet, Venky’s, Suguna have already made a headway in processing and created a ₹280 crore processed frozen segment in the poultry space, it is the online meat start-ups that has grabbed the thunder.

The Covid-19 pandemic has given them a push, with consumers, locked up in houses during the lockdowns, preferring to use these channels to source their meat, poultry and fish products.

“The choice is limited and time taken to get the product is too long at the traditional retail shops. Some of these start-ups are offering over 100 SKUs (stock keeping unit) and delivering them at their doorsteps at a time promised to them,” a top executive of an established poultry firm said.

FILE PHOTO: Delivery worker Devender Singh, who works for Licious, an online meat store, passes a order to a customer in New Delhi   –  REUTERS

“There is a definite shift in shopping habits where consumers are very open to buying meats online, more so after the pandemic. Convenience plays a major role in terms of adoption,” said Siddhant Wangdi, Founder and Chief Executive Officer of Meatigo.

Meatigo, an online meat delivery firm that functions in eight cities, takes over 50,000-75,000 orders a month. While some of the start-ups have raised significant amount of funds, some players like Meatigo have decided not to tap the funding options for now.

“People can find a full stack meat platform offering categories ranging from freshly sourced, cleaned and vacuum packed chicken, fresh sausages, chef crafted marinades, which they don’t find at their neighbourhood store,” he said.

Consumers are looking to upgrade in terms of quality and safety rather than simply substituting purchase location. Online brands, with expertise in quality checks, control of supply chain and temperature, will gain more traction going forward.

The brick-and-mortar industry is watching the developments closely and trying to understand the phenomenon.

“People can sit and crib as they (start-ups) disrupt the space. But as a traditional poultry player, I need to understand, learn and plan how this space is evolving and evolve strategies accordingly,” Suresh Chitturi, Vice-Chairman and Managing Director of Srinivasa Farms, said.

The biggest challenge that the traditional players facing is access to funding and skyrocketing the cost of production that is leaving them with poor or no returns.