It's a story that Licious co-founder Abhay Hanjura loves to retell, and it leaves you shocked and amazed in equal parts. Because, while being rejected by investors is commonplace for startup founders, can you be rejected because of their dietary preferences?
Back in the day, when Licious wasn't the feted online meat delivery unicorn that it is today, it faced a storm of resistance from venture capitalists (VC), so much so that founders Hanjura andVivek Gupta came up with their own monikers for VCs, dubbing them 'vegetarian capitalists.’ Most investors that Hanjura and Gupta met were not consumers of the category, and ended up projecting their biases on them.
While one suggested they make paneer instead of meat, a second asked them to show a similar model that worked in the US orChina. A third backed out as one of the fund's backers was a large Gujarati family that did not want to invest in the sector.
"Meat continues to languish in the kali thaili (black plastic bag) with sanitary pads, condoms, and alcohol. It's the fourth stepchild. Cultural hypocrisy was the greatest impediment," Hanjura said, recounting the stiff resistance even though a majority of Indians consume some form of meat.
Watch|Inside Licious: Here's How The Fresh Meat Is Delivered
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Founded in 2015, Licious delivers fresh meat and seafood, apart from ready-to-cook and ready-to-eat products, categories in which it has been witnessing huge traction of late. Licious will double down on these categories, with plans to launch offline stores and expand in smaller cities. It also wants to change the perception about the way the category operates, on the back of automation and technology.
Buying meat is often a bad experience in India. Wet markets and roadside butcher shops, which can be messy and unhygienic, are where most of us purchase meat. Most of us could be put off by the sight of carcasses and blood.
We were not sure of what to expect when we visited Licious' processing centre at Hoskote, outside Bengaluru. What was apparent was that while it only takes a few clicks to place an order, the package which is delivered at the doorstep goes through dozens of hands and tests before winging its way to the consumer.
Inside Licious’ processing centre
The 25,000-square-foot facility manufactures a variety of products, including ready-to-eat cuisine, seafood, and meat. The facility consists of two floors. Tests and quality inspections are carried out on the upper floor. Microbiologists, laboratory technicians, and other employees who are busy conducting quality inspections, typically work on this floor.
The basem*nt is where the product is given the final touch. The area is divided into two sections. One leads to aromatic marination rooms, giving it the vibe of a restaurant kitchen.
The marination room leads to the area where products are packed, sealed, and stored before being subjected to chemical, physical, and microbiological tests. These are then sent off to be distributed.
The other side of the basem*nt starts with the shredding section for ‘Shawarma’, a Middle Eastern dish, which requires cooked meat to be shredded into thin slices. It is then cooled and packed.
The next room, an alley away, is where employees standing in lines wearing grey jumpsuits and red aprons, receive the chicken. Based on their weight, colour, odour, and damage, it is processed further.
Behind this, young employees who could easily be mistaken for characters out of Squid Game (Netflix) were busy with the same process for red meat.
This centre employs 500 people, 20 percent of which are women, working eight-hour shifts. This is followed by two hours of cleaning before the next shift starts.
On an average, the plant processes 25 tonnes of produce daily. Across India, Licious processes over 100 tonnes of produce every day. But, the types of produce vary from one region to another.
For instance, while chicken is the favourite for Delhiites, Bengalurians love both seafood and meat. Further, based on the type of popular cuisines in these regions, meat cuts and other products are customised.
After packing in vacuum-sealed white cardboard boxes, the produce is transferred in temperature-controlled vehicles to distribution centres across cities, and then finally served to consumers.
Except for a few carcasses in the red meat section, little blood was visible in these rooms, unlike in the neighbourhood meat shops.
Offline to online
Over the last few years, a string of online meat delivery startups have mushroomed that deliver fresh meat and fish to buyers’ doorsteps. So, was there really a problem that needed to be solved?
Hanjura and Gupta often faced this question. “Yeh problem hi nahi hai. Yeh kaisi problem hai (This is not a problem at all. How is this a problem?).”
“Templatisation was another problem. VCs wanted us to show what had been done in the US or China. And we continued explaining how India was a very different market because of the diversity and regionalisation. We are not like other countries,” Hanjura toldMoneycontrol.
Today, Temasek-backed Licious has set up five processing centres across India totalling 200,000 square feet.
The first unicorn in the direct-to-consumer (D2C) space, Licious has raised close to $500 million, and delivers to over 2.5 million customers every month, with an average order value of Rs 600.
But, things did not change overnight. Covid played a critical role in helping these startups onboard new customers.
Take Maitreyee Pramanik. “When we first heard about such online stores, we were not very comfortable ordering regularly. As regular fish eaters, our concern was consistent quality. And they charge a premium too.”
“But the first Covid lockdown changed everything. We started ordering online regularly and were quite happy with the quality,” she adds. At the time of Covid, apprehensions surrounding hygiene and availability at the local butcher added to the reasons for Pramanik to move to online stores.
In 2020, these meat delivery startups saw an increase of 10-15 percent in the average order value. Thankfully, customer retention too increased by 10-15 percent, according to a report by research firm RedSeer.
The market is set to grow to $80-85 billion by 2024, from $40-45 billion in 2019.Following the pandemic, ordering online has caught on, although costs are almost 50 percent higher compared to the local meat shop.
What lies ahead?
This year, Licious began opening offline stores modelled after Haldiram’s, complete with a snack-in counter and the option to purchase meat.
“The Licious offline store will hopefully be a global model. If Starbucks taught the world how to consume coffee, and democratised that, we are also onto something special here,” said Hanjura.
In the coming months, Licious plans to expand its offline stores, add more products, and offer greater regionalisation in its categories.
Licious plans to clock revenues of Rs 1,500 crore in FY23.
Pramanik now does not think twice before ordering online. No more rushing out in the morning in search of good produce, as she is confident she can get that any time of the day.
