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INTERVIEW

“Carcinogenic formalin used to preserve fish,” says FreshToHome chief
Monday, 03 June, 2019, 08 : 00 AM [IST]

FreshToHome is the largest e-commerce company in the fish and meat space in India, delivering over 8,000 orders a day to 4,00,000 customers.

It provides chemical-free and antibiotic residue-free food to the masses and is reinventing the food supply chain from scratch by providing higher value to the farmers and fishermen.

The company, which deals with over 15 tonne of fresh fish and meat, and is the market leader in this vertical in India, also received $11 million via Series A funding, led by CE Ventures, with participation from Das Capital, Kortschak Investments, TTCER Partners and other Asia- and Valley-based investors.

Tarun Khandelwal of Add Advisory Partners of UAE was the advisor to the company on the round.

“The Series A deal concluded in mid-2018,” said Shan Kadavil, founder and chief executive officer, FreshToHome, in an e-mail interaction with Nandita Vijay.

Excerpts:
How would you describe the current scene for meat and fish home distribution?

It is a nascent market - 99 per cent of households continue to buy their meat and seafood at the wet market, where issues of chemical contamination are rampant. We are focussing on shedding some light on what happens behind the scenes at wet markets.

What are the visible trends?
Some of the common trends that we see across various segments in the food industry are concern for health, awareness of chemicals present in food, the shift to organic products and potential move to more sustainable products that are helping fishermen and the company alike.

Everyone understands the importance of eating organic and chemical-free food. More people are buying produce directly from farmers instead of going to markets.

People are also aware that farmers are encouraged to use chemicals to protect their produce, not to forget that this increases their profit margin.

Our consumers today are more aware than they were a decade ago. People are discussing and aware of sustainable farming and fishing practices.

Consumers are beginning to take notice and some of them are taking the first step towards change, but it is a long way to go.

What are the challenges for companies like yours to succeed? Can you also share the attrition rate in such business models?
The biggest challenge is to educate consumers regarding safety issues in today’s food supply chain and raise awareness. This will, in turn, force vendors to invest in robust cold chains, proper storage mechanisms and responsible sourcing of fish and meat.

For example, we make sure our meat products are always preserved between zero degree Centigrade to four degree Centigrade.

But if you were to look at standard mutton shops across India, you will see mutton carcasses being handled without any cold chain or temperature protection.

This leads to bacterial multiplication. It happens in a very short period of time, and only low temperature can suspend bacterial growth.

Additionally, there are added chemicals in seafood that is bought from wet markets since most vendors optimise on the cost of ice.

The other key challenge is busting myths about meat and seafood, that have no scientific basis whatsoever, the most common one being, ‘If the meat is cut in front of me, it is fresh.’ This is not necessarily true when it comes to meat or seafood.

Our biggest challenge is to educate consumers responsibly, while continuing to give fishermen and farmers a fair price and take them along on the journey of reinventing India’s food supply chain.

Since you have been an entrepreneurs all along, did you have to raise funds for this venture?
Yes. Initially, we kick-started with our own money and then relied on investors as the company started expanding.

How receptive are the VCs and PEs to fund such ventures ?
VCs (venture capitalists) and PEs (private equity firms) are extremely receptive to fund a venture like ours. In fact, multiple companies like FreshToHome, among others in the same sector, have been funded. They are aware of the potential this market holds.

The seafood market is pegged at $50 billion, while poultry and mutton is worth about $30 billion. This makes the industry ripe for disruption.

What led you to set up Freshtohome.com?
When I first moved to Bengaluru with my family, being the foodie that I am, I went looking for places where I could buy fresh fish from. Most of the fish that I got from the wet market did not have the freshness that I was used to back home.

This made me dive deeper into the matter. That is when I discovered most of the fish available in the market was laced with ammonia and formalin. Occasionally, it would taste and smell of it and that really worried me because of its impact on my health.

SeaToHome, an online seafood delivery store managed by Mathew Joseph, solved all my problems. The downside to this solution was that they were shutting shop. So, I wrote to Matthew and told him I could help him fix the issue of supply demand using technology.

Together, we started FreshToHome.com. From the get go, we had one mission and that was making fresh, chemical-free food accessible to the masses at large.

Which markets do you cater to?
We are currently present in four cities - Bengaluru, Chennai, Delhi and Kochi. We will soon be launching in Mumbai and Pune

How different is it from your competitor, Licious?
It is 100 per cent fresh and with zero per cent chemicals. This is our USP (unique selling proposition). All our products are chemical-free and we have them tested by, Asia’s top lab. We also have certificates on our website for our customers to verify. This is the zero per cent chemicals side of the brand.

When it comes to freshness, we do not freeze our seafood. Fish have water molecules in them which contribute to the flavour.

When you thaw frozen fish, the water molecules melt and is released from the fish. What you are left with is tasteless fish. We only give you fish that is straight from the coast.

How do you source the fish and meat?
When we set up shop, we started off with the intention of selling fresh, chemical-free food. We did not want to jeopardise the livelihood of fishermen which led to collaborating with fishermen across coasts, who work with country boats.

This would allow us to grow together. We created a patent-pending technology called the Commodities Exchange Platform, on which fishermen can auction fish to us by sharing images.

We then have our trucks pick up the products, that head to our processing unit, where it is cleaned and cut.

Could you detail on the chemical-free and antibiotic residue-free meat and fish?
It is fairly simple. The shelf life of fresh fish, from when it is caught is 2-3 days.

The big fishing trawlers are out in the sea for three months straight. To preserve the catch, they lace it with formalin, a chemical used to preserve carcasses in a lab. This helps increase the longevity of the fish caught, while it is decaying on the inside.

For example, if you were to buy a kilo of fish, you are likely to find a piece or two that is rotten. Most often, that is old fish preserved using formalin. Formalin is carcinogenic when consumed frequently.

When it comes to chicken, the usual practice is to inject the birds with antibiotics for them to grow faster and not contract diseases.

What our vendors do is wean the birds off the antibiotics a few days before they are slaughtered. This makes our products antibiotic-residue free. Hence, our chicken is smaller in size, tender and juicy.

Where is your facility to cater to the large quantities of meat and fish, and would you refer to it as  a manufacturing or distribution centre?
We have five factories in Kochi, Bengaluru and Delhi, and we are currently setting one up in Mumbai.

The factories are a combination of manufacturing centres - for processing and packaging fish, meat and vegetables, and distribution centres.

What are the likely future efforts of the company, and how easy is it to attract the right workforce?
We have one vision, and that is to offer premium chemical free food at a value price. This would mean working with farmers and fishermen directly, to eliminate middlemen from the supply chain.

What we are really working on is to reinvent the food supply chain, working with farmers and fishermen directly.

We are soon planning to add more products to our inventory, such as fruits and vegetables, cold-pressed oils, flour, etc.

The idea is to push the distribution across e-commerce platforms, retail stores and other channels across geographies.

Our mission attracts people at the top level and at the lower level, we hire people from the unorganised sector and upskill them.
 
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