Swiggy’s Snacc, Blue Tokai sever ties over pricing, strategy mismatch

Swiggy’s Snacc, Blue Tokai sever ties over pricing, strategy mismatch

Swiggy’s 15-minute food delivery app Snacc has ended its partnership with Blue Tokai Coffee Roasters, barely three months after it was announced, people aware of the developments told Moneycontrol.

The tie-up, which helped Snacc gain initial traction by getting the ball rolling for its 15-minute food delivery play, was called off after both companies failed to align on key aspects such as pricing, menu strategy, and broader execution goals.

The partnership, announced in January this year – days after Snacc’s launch, allowed the app’s users to order from a curated range of Blue Tokai’s specialty coffee offerings, delivered in under 15 minutes.

However, sources said that differences over the pricing model and the product mix ultimately proved to be sticking points.

“The two sides couldn’t decide on a common framework for pricing and menu optimisation. While Blue Tokai pushed for certain items on the menu, Swiggy would have wanted to follow a different strategy. The partnership became difficult to scale or sustain after that,” one of the sources said.

A quick search on the Snacc app also does not show Blue Tokai products any more.

While Blue Tokai declined to comment, Swiggy did not reply to Moneycontrol's queries.

For Blue Tokai, the quick delivery model had shown early promise. In an interview with Moneycontrol in January, co-founder and CEO Matt Chitharanjan noted that while offline stores continued to contribute the bulk of revenues, rapid-delivery channels like Snacc were growing even faster than its e-commerce vertical.

“Right now, we are at 30 locations with them (Snacc). It is a bit early for us to say how it is going to play out. (But) we see it as very complementary to the deliveries from our own cafes,” he had said, adding that Snacc catered to an instant consumption need—a different use case from its wider café and aggregator menus.

But while the coffee cooled, competition in the 15-minute food delivery space is heating up. Swiggy has been a relatively late entrant to the segment. Zepto pioneered the category with Café back in 2022, while Blinkit reinvigorated interest by launching its own app, Bistro, in December last year. Zepto Café followed by spinning off a dedicated app just a day later.

Zepto Café has since scaled quickly, crossing 100,000 daily orders in February. “That’s closing in on a $100 million annualised GMV run-rate with an approximately 50% steady-state gross margin—already over 10% of the scale of some top QSR chains in the country,” Zepto CEO Aadit Palicha had said in a social media post at the time.

Startups like Swish and Zing have also entered the ring, with Swish receiving backing from marquee investors.

Snacc’s split with Blue Tokai could mark a strategic pivot for Swiggy as it looks to lean more on in-house offerings—an approach that’s already a staple for its competitors. Both Bistro and Zepto Café offer proprietary food and beverages made in their dark stores, giving them tighter control over margins, pricing, and consistency.

Zepto also runs private labels like its meat delivery brand Relish, though not all such verticals have scaled at the same pace.

But the rise of platform-owned brands hasn’t been without controversy. Restaurant industry bodies, including the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India (FHRAI), have raised concerns over alleged private labelling by delivery platforms, calling it anti-competitive. The matter has reached the Ministry of Commerce and Industry.

As the space becomes more competitive, Snacc’s recalibration may signal Swiggy’s push toward vertical integration—one cup of coffee at a time.