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“Indian meat market to reach $65 bn by 2022”
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Monday, 11 June, 2018, 08 : 00 AM [IST]
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 Licious is India’s leading gourmet meat brand. The two-year-old Bengaluru-based company operated by Delightful Gourmet reinstates that meat processing is a science with supply-chain excellence, product innovation and cold chain management. In an interaction, Vivek Gupta and Abhay Hanjura, founders, Licious, in an email interview with Nandita Vijay give insights into the prospects of branded meat processing market in the country. Excerpts:
Where does India stand in meat processing, globally? What are its prospects for exports? What is the market size for meat processing in India?
India’s growing middle-class is pushing the growth of the meat sector. Research shows that there will be around 80% growth in meat demand by 2022 driven by convenience. This will bolster the adoption of processed meat, fish, and poultry products. The Indian meat market is US$31 billion growing at a CAGR 20% and it will reach US$65 billion by 2022.
India consumes close to US$30 billion meat annually where 90% is handled by the unorganised market. Out of total US$300 billion grocery market, this is the only largest category which has not been organised. Licious is the first and only company which has taken an approach to create brand in this space by taking responsibility of organising farms, creating infrastructure and bringing the right product to consumer’s doorstep.
Our country’s middle-class indicates a preference for high-protein food like meat. This is evident from India’s largest household consumption survey conducted by the National Sample Survey Office (NSSO), with a sample size of over one lakh households. In fact a recent survey has busted the myth that India is a vegetarian country, 72% of Indians have non-vegetarian dietary habits with south India being a heavy meat consuming section compared to the central & north India. The figure is interesting in the sense that meat consumption is a good marker of economic development.
Consumers in India will slowly but surely make a move towards brands that can guarantee them a certain standard of quality and this is where we see tremendous scope to build a brand with trust.
The company had raised $9 million. Share the development plans that follow this fund infusion.
We have received two rounds of funding so far. We raised angel funding and Series A of US$3.5 million from 3one4 Capital and Mayfield Capital. After that, we secured US$10 million in a Series B funding round led by Mayfield India, 3one4 Capital, Sistema Asia Fund and Neoplux Technology Fund. Apart from facilitating our growth and entry into newer markets like Delhi/NCR, we are looking to deploy this capital in the areas of technology, brand building & product innovation.
How receptive are PEs and VCs to the meat processing startup sector?
During the early days, there was a reluctance since there was a perception that it is hard to organise a fragmented and unorganised meat sector in India to build a meat brand. However we have succeeded in raising about US$15 million till now. We have successfully proven out the business model by scaling across multiple cities. At this stage, the investors community looks at Licious very favourably.
What are your key strengths that spur growth prospects?
We endeavour to satisfy customers with the finest and freshest meat. Seafood too is processed using globally-accepted scientific techniques and by creating an organised fresh meat category in an industry dominated by the frozen meat market.
Our biggest strength is our holistic brand route that we have taken and the innovation led strategy that sets us apart in a consumer’s mind. Take an example of spreads, pickles and soups that we have innovated. Who would have thought that there can be a market for a chicken spread for a millennial consumer? But the fact is that health-conscious folks use it to spruce up their salads, or busy moms make their previously boring sandwiches a meaty twist. Now this is a validation of the fact that there is a large untapped market open for products that make a difference to the consumer’s life.
We follow an end-to-end business model that starts from procuring the fresh produce to processing, storage and delivery. This allows us to control the supply chain and strictly maintain the freshness and quality of the product till the final delivery to the doorstep of the consumer. We ensure cold chain process is throughout the supply chain at a temperature between 0 and 4 degrees, so that the quality is not compromised. The distribution is managed in a manner that there is zero-inventory.
What is the advanced technology incorporated in processing and tracking the packs?
We, at Licious, believe that technology can greatly aid in offering traceability, right from the time the meat is sourced till it is made into the final product. High-end systems can help in tracking the meat till the time it is converted into a final product, keeping in mind important aspects such as supplying vendor, date of supply, weight and the sample’s microbial study, which can be linked right up to a customer order. These systems significantly facilitate the standardisation of meat processing.
Samples of each batch, to trace back any issue from the customer’s end, right up to the source are maintained. An efficient way of implementing this using barcodes on every product, which can be tracked for shelf-life, manufacturing and expiry dates. Moreover, it is imperative that fresh products are delivered to the consumers. This ensures that the Licious brand is best-in-class and of the highest quality.
We use technology to deliver products in temperature-controlled boxes. There is visibility of the product’s temperature right from its receipt in the processing plant, storage as raw material, transportation as finished goods to when it is delivered to the customer. This will also reassure the customer that the Licious products are of the best quality.
Which are your fastest growing products - meat, poultry or seafood?
Our business is growing across all categories, as people are switching to healthy meat options. We do have certain seasonality impacts. For example, currently Government of India has implemented ban on fishing in the Arabian Sea and Bay of Bengal coast, to protect the fishes during breeding season. This will result in a slump in seafood supply. But this is the way to sustainable growth and as a responsible organisation we urge people to consume fresh water fishes.
What is the competition in this sector?
After Licious was incorporated, more than a dozen companies emerged in this space. So yes, we are glad we have given entrepreneurs a belief that this is a great space to be in. Having said that, most companies have thought about this space as ‘butcher business’ but it is not. It is a combination of science, supply-chain excellence, product innovation and cold chain management all packed into one.
What are the hiring plans for the future?
At Licious, hiring takes a key focus amongst all other talent priorities. Last year, we strengthened our leadership team. With the functional visionaries now in place, this year Licious will focus on boarding candidates at the middle management level. The hiring in is -for both back-end and front end - will happen based on our expansion plans. In fact, we are gearing up for a growth of over 50% in our full-time headcount. For this 20% will be for our corporate office, and the remaining would be operations teams. At present, we are 600. We are aiming at the head count of approximately 1,000 by the end of this financial year.
Provide details of the processing plant infrastructure in Gurugram and Bengaluru.
Licious runs a world-class plant incorporating the best meat processing techniques. Both plants included, have over 35,000 sq feet of FSSC (food safety system certification) 22,000 compliant production centre. Best of meat processing techniques like spatchcock, rigor mortis and pH balancing are followed in a cold chain-maintained production floor. Licious employs specialised staff which include biotechnologists, meat scientists as well as trained butchers and qualified packers. Each of our processing plants are equipped with the best of class QA (quality assurance) lab, where food defence and quality techniques are innovated and implemented. Multiple quality assessment is performed at various check points including receiving of raw material, storing, production, packaging and finally at dispatch. Our innovation and automation help us in ensuring safe quality of meat is delivered to customer each time.
The company has over 27 delivery centres. Do you have plans to set up more centres?
Licious currently operates in three major cities in India - NCR which covers Delhi, Gurgaon & Noida), Bengaluru and Hyderabad with 27 delivery centres. In next three years it will add 55 more delivery centres in five new cities across India taking the count of delivery centres from 27 to 82.
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