How Freshpick is pivoting from just meat and fish to everything fresh and healthy in Mumbai and nearby markets
About 70 percent of India’s population is non-vegetarian which accounts for an overall meat market size of $50 billion. This market is expected to grow at a CAGR of 10 percent over the next five years.
While 90 percent of the meat market is still unorganised, 10 percent of the organised market is dominated by frozen meat. The customer preference for fresh meat over packaged products is significantly higher in India. While there are players like butchers, abattoirs, hypermarkets and online marketplaces, most of them lack safety and traceability, are lax in regulatory compliance, and have inadequate or traditional cold chain infrastructure. For most buyers, the ‘touch and feel’ formula works best in selecting fresh catch in a meat market.
In 2014, Mumbai-baseddecided to disrupt this largely fragmented meat market by solving the problem of freshness and safety in food produce and has spent the last seven years integrating the supply chain from farm to fork. The company was operating under the brand name of 'The Seafood & Meat Co.' and recently rebranded itself as 'Freshpick'.
A journey spanning over three decades
Prior to establishing Freshpick, Vyal Adhye, the founder and CEO of the company, spent more than a decade in the operations industry, which started with a cold-chain logistics venture, ColdStar Logistics Pvt Ltd.
He learnt the nuances of the meat business from his family that has been operating in the food distribution and cold-chain industry since 1987. The family has strong relationships across the food value chain in Mumbai as well as across the country.
Freshpick also gets the benefit of the experience of Vinay Adhye, Director at Freshpick, who was the Founder of Agri-Solutions Pvt Ltd and Retail Concepts, Director at RK Foodland Ltd and is currently heading the food and grocery business for Reliance Retail for Maharashtra.
“Although we started in 2014 with fresh meat and fish as our core category, our greater mission was always to become a full-stack fresh and healthy food brand. Consumers today want to know the source of their produce and are looking for safer and sustainable options. A fresh food business needs daily stringent monitoring and control, and we have been fortunate to have a seasoned team on board. Freshpick endeavours to bring more transparency and safety in the Indian food supply chain,” says Vyal.
Farm to fork: Sourcing and processing the highest quality food
Freshpick sources its products from certified vendors with verifiable integration to the primary source or producer. It has food safety personnel and technology to monitor and control quality at the farm level. It is committed to quality control, right from procuring the produce to processing, storing and delivering it.
The produce reaches the central processing centre in Parel, Mumbai every morning as per the daily requirement. The Parel centre is strategically located with a 10-ton storage capacity and 4-ton daily processing capacity. This centre follows HACCP guidelines and is FSSAI certified. It is currently processing the implementation of ISO 22000 certification.
The entire setup is temperature-controlled and the company uses best-in-class food packaging methods such as food-grade multi-layer film for tray packaging and vacuum packaging to retain the freshness and quality of the product.
Freshpick has also deployed a dedicated inventory software and technology to monitor ‘Farm to Fork’ traceability and just-in-time inventory across the supply chain. Once the order is placed, Freshpick’s customer support team guides the consumers on order queries and their redressal, and prompt delivery is ensured via Freshpick’s own delivery fleet in the agreed time slots.
Taking the omnichannel distribution route
Freshpick distributes its products directly to customers through its stores, online marketplaces and modern retail tie-ups. It runs six stores and has a presence across 150 pin codes across Colaba to Borivali in Mumbai. Last month, it forayed into three more cities in Maharashtra - Nashik, Pune and Alibaug.
Freshpick also partners with last-mile delivery apps like Swiggy, Dunzo and Zomato and has explored the shop-in-shop concept with traditional modern retail leaders like Foodhall, Nature’s Basket, Haiko, Metro Cash & Carry, to name a few. The startup is currently the back-end meat partner to Amazon Fresh for its Mumbai, Pune and Ahmedabad operations.
Apart from opening stores across Mumbai, Freshpick is exploring unique partnerships with gated communities/societies to grow its customer base offline. It has opened shops in the Indian Naval base in Uran, as well as inside the Cricket Club of India, Mumbai (CCI) for its members. "The pandemic opened up new market opportunities accessible at a low real-estate expense for us. Each of these catchment areas are sizable captive markets with 10,000+ customers. Local targeted focus leads to operational excellence and improved customer connect," says Vyal.
Standing out as a brand
As people continue to work from home, there is a surge in orders for ready-to-eat food, do-it-yourself (DIY) meals, grilled and marinated products. Freshpick has introduced an eatery concept at its stores to serve instant food to on-the-go consumers. While many startups are catering to similar needs, what makes Freshpick stand apart are four aspects, according to the founder.
First, is their mission to be a full-stack fresh and healthy food company in Mumbai and western India. The startup is continuously innovating by introducing new value-added or complementary products. Initially, Freshpick only had seafood and meat on its menu, but they have recently started to deliver spices, salts, pickles, snacks, dips, spreads, pet foods, plant-based meats, dairy as well as fresh fruits and vegetables that complement the meat. “In Mumbai, we have built the supply-chain network and operational capabilities to handle much more than fresh fish and meat. The response has been great for these new product additions,” says Vyal.
Second is their growth rationale. "We believe each regional market in India is a massive opportunity. Our ideology is that instead of going wider and spreading yourself too thin, a brand can go deeper and focus on one region at a time like in our case, the western part of the country (Goa, Mumbai, Pune, Nashik and Aurangabad). Maharashtra in itself is a $20 million annual opportunity for us,” adds Vyal.
Thirdly, Freshpick has demonstrated strong unit economics. It clocks an industry-high average bill value of Rs 1,500 and has a 90 percent repeat customer rate with 99 percent on-time delivery and order fulfilment.
And finally, Vyal says that they're a channel-agnostic brand that believes that hybrid is the way forward. "Although online is the future and the pandemic has given the much-needed push with online sales, we still cannot overlook the opportunities and overall consumer experience that the offline market provides. We plan to open 10 more franchisee retail stores in key locations in Maharashtra in the next 12 months and double-down on our call-centre customer service efforts,” he shares. Freshpick has recently appointed a senior sales executive and set up a sales team to acquire Mumbai’s burgeoning online and offline fresh food market.
Focus on Maharashtra
Freshpick has grown 100 percent year-on-year since inception, acquired 21,000+ loyal families in Mumbai, and built a 3,500 sq ft fulfilment/processing centre in the city with 50 people in its team. “Our intention was to be close to the consumer for prompt home-delivery, hence, we set up a state-of-the-art facility with all the operational amenities for a 24/7 operation inside the heart of Mumbai,” says Vyal.
Freshpick raised an angel round in May 2019 from Sandeep Roperia, a senior private equity professional and active angel investor in India. It is now actively looking to raise a Pre-Series A round this year. Most of the investment will be towards improving sales and marketing capabilities for Mumbai and the western region, developing new product lines, working capital and minor technology and asset upkeep.
According to Sandeep, “Freshpick has come up the hard way with its founder’s long-term vision to bring nothing but fresh and safe food to its customers. At a time where companies and startups are focussing on high burn hyper-growth models, Freshpick has stayed true to its fundamentals and is very close to attaining company-level profitability. This is not common in the consumer space and I’m happy to back a startup that’s been able to prove scalability with sustainability.”
Today, the company is at an annual sales run rate of $2 million. Its B2C business contributes 50 percent of its overall sales, B2B2C contributes 30 percent and B2B the remaining 20 percent. Freshpick is aiming for an annual turnover of $10 million for FY 2024-25 for the Maharashtra market by increasing its online presence, launching new product lines, opening franchise stores and ramping tie-ups with modern retail and e-commerce marketplaces.
“We acknowledge the complexities in the food business and our approach is slightly different but long-term efficient. We’ve spent the last seven years understanding and decoding the supply chain and unit economics for this category, and we’re now seeing the fruits of our labour. We’re indeed on the path to build a scalable yet sustainable business,” says Vyal.