Mumbai-based Yummade is betting big on fresh homemade packaged food
What would you do if you're stuck in meetings the whole morning and have just a half hour break? Most of us would just look at picking up something quick to quell our hungry bellies. We live in a world of timelines and deadlines and the quick fix for hunger most times is a packet of biscuits, snack or an energy bar. In short, on many occasions, packaged foods have replaced meals for us.
Yet, there is this lurking fear and doubt that these packaged foods aren't good for us. Yummade was born by asking a rather simple question: “Why does no one encourage eating packaged or processed food?” It's a platform that delivers freshly-made jams, sauces, snacks and other goodies right at your doorstep.
Gaurav Tandon, founder and CEO, says that with time most foods that he loved, like jams, biscuits and sauces, had become tasteless because there hardly was any real fruit or chocolate in them. However, the turning point came when his nephew spit out a jam that Gaurav had picked up at a kirana store. He told Gaurav that the jam reminded him of the chemistry lab in his school.
"And it truly did taste like that. It opened my eyes to the fact that the problem of chemicals and poor quality and tastelessness of packaged foods had gotten out of control, all for longer shelf life to accommodate manufacturing and supply chain inefficiencies. So, a packaged food item has 18-24 months shelf life, not for our consumption, but for the time it spends in a warehouse, a distribution centre or a retailer’s shelf. Once we buy it, we end up consuming it within a month at the most. If we could eliminate these unnecessary supply chain pitstops and inefficiencies, we could have packaged food that is fresh, tasty and free of chemicals,” says Gaurav.
Soon Gaurav quit his job and began work on Yummade. The core principle was to take a new and different approach to packaged foods, thus giving consumers more variety and freshness along with convenience.
Building the core team
With the help of some his IIT-Bombay friends, who were entrepreneurs, Gaurav developed a mobile-friendly portal and listed about 50 products. But then, waiting for other small things to come together – like logistics and payment gateways – was taking too much time. So, on Jan 20, 2015, Gaurav just went ahead and launched the business. "The basic end-to-end structure was in place, there were clear features missing, but the MVP was ready," he says.
Gaurav, acting as CEO and delivery boy, got over 50 orders on day one. Soon, he realised that he couldn't run the show alone. Gaurav decided to meet his decade-long friends Mansharan Seth and Rohini Pangrikar. He says that food was always a common topic among the trio and they also shared Gaurav's passion. After listening to the idea, the two joined in as the founding members of Yummade.
"We decided that in order to test our core value proposition, we would need to use plug-and-play solutions for some elements of the business model. We quickly got hold of a few hyperlocal delivery services and used innovative ways to club them together to build a pan-city delivery network," adds Gaurav. While it wasn't the best solution, it's what they had at that time.
Today the team has grown across marketing and operations and they are looking to add more people in addition to on-ground operations staff.
"As for the brand name, it came quite naturally from our core value proposition – everything that is made fresh, made with real ingredients, made with love and care," says Gaurav.
Apart from getting the right team in place, the other big challenge Yummade found was the food itself. According to Gaurav, food is an incredibly complex product to sell. He says that unlike purchasing a mobile phone or taking a cab ride, where the opinion of two customers will more or less be the same, it is very different in food. The variety of taste preferences is both a challenge and an interesting problem to solve. So, with every new product, they have had to constantly question their own decision on seeking mass or polarised appeal.
As the team is looking to build a pan-city, point-to-point logistics model, which they believe is far more complex than a hyperlocal model or a traditional hub-and-spoke one. This, Gaurav says, is a challenge but it's something they believe will truly help the business.
As compared to a conventional packaged food company, their model, Gaurav says, allows them to be more agile, faster-to-market, leaner, more innovative and more scalable - both in terms of product categories and geographical coverage.
"What we are today is not a food delivery app or an e-commerce portal. We’re building an end-to-end business model for packaged foods, and the logistics and online retail are elements of this business model. Grocery portals or food delivery apps usually help consumers get access to existing SKUs (from restaurants or kiranas), and we’re expanding the market by creating new SKUs and even converting customers who have traditionally not consumed packaged food. Therefore, it’s a unique model which spans across technology products and services," says Gaurav.
The team says it’s seen a 5x growth since its launch early this year. The startup also added more variety in its products. "We now have over 300 unique packaged foods, which customers can order every day. Plus, repeat order rates have been amazingly good, with repeat order values being almost two or three times first time orders. Most of this growth has been purely organic with limited marketing spend. We’re now rolling out innovative revenue models and BTL marketing activities to get new trials," adds Gaurav.
The health food fad
The packaged food market is estimated to be close to USD 20 billion. India, currently, has close to five per cent market share in the packaged food business. However, the market for 'health foods' and snacks is fast picking. Some of these include Yoga Bars, Nature's Value and RiteBite. Apart from these, there are also other snacking and packaged foods like Green Snacks. Reports (as mentioned in the Business Standard) suggest that the health food industry is pegged at Rs 22,500 crores and has a CAGR of 20 per cent.
"We believe this is a huge opportunity and we are aiming equally big. Our aspiration is to build USD one billion 'unPACKED' food business by 2020. We’re growing at a rapid pace towards this target and are in advanced stages of talks with institutional and individual investors to raise a seed round of USD million to ramp up technology and operations over the coming months," adds Gaurav.