Online meat delivery player FreshToHome on offline expansion spree

Online meat delivery platform FreshToHome is on a rapid expansion overdrive with plans to add 70 outlets by the end of this year to take its offline store count above 100 across the country.

“We have seen a pattern that in areas where our offline stores are operational, the growth in online sales has jumped by six-seven times,” Shan Kadavil, Co-founder and CEO, FreshToHome. “We see offline as a big enabler for our online revenue.”

The company started its offline journey about nine months back and now plans to aggressively tap the traditional channel for the next leg of growth.
FreshToHome is present in 56 towns and cities and, this time, the company is homing in on metros like Bengaluru, Chennai, Mumbai and Delhi. It also plans to launch three stores in the UAE. The average size of the new stores will be 300-400 square feet, while the company also plans a few large-format, 1,500-square-feet outlets. It is scouting for residential high-street locations to set up its stores.

“We will offer our ready-to-cook and ready-to-eat products in the large-format stores, besides a wider assortment of our products and a butchery,” he said.

The expansion blueprint covers a wider tract of the Middle East, besides the UAE, with plans to launch online operations in Riyadh in Saudi Arabia, Doha in Qatar, and Muscat in Oman, by the end of this quarter. The company draws about 10 percent of its revenue from international operations.

In step with its plans for a wider footprint, the company has lined up a host of new products. “We plan to launch by December clean label ‘ready-to-cook products’ which have no preservatives and chemicals. The range has been introduced in Dubai,” said Kadavil. It will launch 15-20 stock keeping units under this category.

The ready-to-eat and ready-to-cook segments of the product line contribute about 5 percent to its sales. The company plans to jack it up to 15-20 percent. According to Kadavil, ready-to-cook and ready-to-eat meat form a $1-billion segment. “It has high return on investment and younger consumers particularly are going for this category,” he said.

The company has tied up with modern trade stores like EasyDay and More Hypermarket to roll out its ready-to-cook and ready-to-eat products. FreshToHome is present in about 50 outlets and plans to launch these products in 100-200 stores.

A report by RedSeer Analytics in March pegged that the meat market is expected to reach $80-85 billion by 2024 and is up for disruption by branded players, while online meat delivery grew 2.5-3 times during January-September 2020.

Launched in 2015, FreshToHome sources meat and fish directly from livestock farmers and fishermen and then supplies fresh produce at mass-market prices in the UAE and all major Indian markets, including Delhi/NCR, Bangalore, Mumbai, Pune, Kerala and Tamil Nadu. The company which competes with players like Licious, Zappfresh and TenderCuts, claims it has an annual revenue of Rs 1,000 crore and processes about 1.5 million orders a month.

It has raised $154 million in funding till date. Last year, it had raised $121 million in Series C round led by Investment Corporation of Dubai, which is the principal investment arm of the local government, Investcorp, Ascent Capital, the US government’s development finance institution (DFC) and the Allana Group.