Christina Moniz, Financial Express

December 12, 2022

This year has seen the entry of several brands into the plant-based meat category, from large players like ITC and Tata Consumer Products to newer brands like Licious. Mock meat, a growing trend especially in Western markets, is a plant-based protein processed to resemble and taste like meat. From vegetarian ‘chicken nuggets’ and sausages to meat-free ‘mutton’ seekh kebabs, most Indian players use ingredients like soya and jackfruit to mimic the texture and taste of meat.

The Indian vegan meat market is rather small currently — estimated to be around Rs 250-300 crore. But consider the potential: About 41 percent of respondents in India identified as either vegan, vegetarian, or pescatarian in a 2021 survey. A report by Wazir Advisors estimates that this category will grow 8-10 times to reach Rs 3,500 crore in 2026.

Looking from a global perspective too, this new category cannot be written off as just a blip. Worldwide, the consumption of such meat substitutes grew from 133 million kg in 2013 to 470 million kg in 2020.

While the projections are fantastic for this market, it is still very small within the entire food category, points out Sandeep Singh, co-founder of Blue Tribe Foods, a two-year-old start-up in this segment. What is needed to grow the category, he believes, is innovation. “The food items need to move beyond burgers and nuggets to appeal to the Indian non-vegetarian consumer. For example, someone needs to create a good chicken tikka masala or a good kheema to attract the Indian palate,” he explains. Earlier this year, star couple Virat Kohli and Anushka Sharma announced their investment in Blue Tribe Foods, a move that has boosted awareness for the brand and category, says Singh.

Variety & cost

Tata Consumer Products, which launched its vegan meat brand, Simply Better, in July this year is tapping into the trend of consumers moving towards healthier and sustainable lifestyle choices. Deepika Bhan, president, packaged foods (India), Tata Consumer Products, maintains that the market holds great growth potential. “Over 70% of the Indian population is flexitarian (consumes both vegetarian and non-vegetarian food). Surveys also show that over 73% of Indians today are protein deficient. These data points signify untapped potential in the plant protein segment. The consumer cohort, which is aware of the health and environmental benefits of plant protein, is likely to expand to a more diverse audience seeking to supplement their diet with alternate, plant-based meat,” remarks Bhan.

Cost is a factor hindering growth. Currently, the pricing for plant-based meat is 1.5 times the price of real meat products. “For premium consumers, price is not a challenge but to gain scale and reach the masses, pricing needs to be more attractive,” observes Devangshu Dutta, CEO, Third Eyesight. Indians have for decades consumed soya nuggets and products as a source of protein and as a meat alternative, but brands today are targeting urban consumers who are not price sensitive. “The consumers that brands are targeting are influenced by trends in Western markets and adopting veganism for ethical or health reasons,” adds Dutta.

Another consumption trend that is unique to Indian consumers is that there are around 100-odd non-meat eating days annually, on account of religious or cultural occasions. Meat and seafood company Licious is targeting these consumers on non-meat eating days with its newly launched vegan meat brand, UnCrave. Simeran Bhasin, business head, alternative protein, Licious, states that all brands in the category are still on a journey to improve their offerings . “Our plan is to create relevance before aiming to take a share in it. Eating is believing, and we want more of our consumers to sample our alternative protein offerings. So, we send samples of UnCrave along with Licious food deliveries to encourage consumption and drive brand awareness,” explains Bhasin.

While UnCrave is currently present in only four cities (Mumbai, Delhi, Pune and Bangalore), she asserts that there is a market for the brand in non-metros too and expects the brand to reach the top 20 markets by the end of the next fiscal.

(Published in Financial Express)

Christina Moniz, Financial Express / BrandWagon

November 4, 2022

Direct-to-consumer (D2C) lingerie brands, often credited with transforming the category and the way women shop for innerwear, are expanding their offline footprint in response to growing demand from tier-II markets and beyond. Zivame, whose journey began online just over a decade ago in 2011, has grown its offline presence to over 120 stores and also sells through over 4,000 partner outlets. In its recently concluded Grand Lingerie Festival, Zivame saw its sales grow three times,with a 120% increase in new customer acquisition. “Tier-II markets are showing massive potential and though tier-1 remains our highest revenue contributor, we are seeing significant revenue baseline shifts in tier-II locations,” says Khatija Lokhandwala, head of marketing at Zivame. The company has announced that its focus will be retail expansion in the second half of this fiscal, going beyond metros and tier-I markets.

Another decade-old D2C player in the innerwear segment, Cloviais eyeing the immense opportunity presented by smaller markets with aggressive expansion plans in place. “Clovia currently has 45 exclusive brand outlets in the country and has been diversifying its product range, with plans to open 130 outlets by the end of this fiscal. Ours has always been a mass- market brand, and most of the repeat customers come from tier-II and tier-III markets,” explains Pankaj Vermani, founder and CEO, Clovia. He notes that over 65% of its customer base is from the non- metro markets, and average order values are 20% higher in these cities compared to the metros. Earlier this year, Reliance Retail Ventures acquired an 89% stake in Clovia’s parent company (Purple Panda Fashions) for Rs. 950 crore. Vermani adds that Clovia will ben- efit from the conglomerate’s scale and retail expertise, driving up growth and love for the brand. Reliance Retail had picked up 15% stake in Zivame back in 2020.

Shaping the market

The women’s innerwear market in India is set to double to reach $11-12 billion by 2025, according to a report by RedSeer. Aside from the key segments of bras and panties, ancillary products like athleisure, sleepwear, swimwear and lounge wear are also boosting the lingerie category’s growth in the country, as is evident from the widening portfolios of leading brands. The online segment for women’s innerwear is expected to become a $1 billion market by 2025.

Experts believe there is a large opportunity for companies to grow since 60% of the $6-billion women’s intimate wear market in India is unorganised, and the category is still largely underserved.

“The lingerie market is an example of improving supply feeding into a growing demand, and the increasing demand expanding the opportunity for more brands to step in. Larger cities, with their higher income profiles and demand concentration, are the logical first-choice market for companies such as Zivame,” points out Devangshu Dutta, CEO, Third Eyesight.

The competition in the large cities is greater, with a plethora of Indian and global brands, which is why Dutta recommends that e-commerce led companies should push aggressively in smaller markets to drive sustained growth.

The fact that D2C brands have better data sets at their disposal to glean insights about Indian women and their concerns when buying innerwear has also worked in their favour.

“Intimate wear shopping can be overwhelming for a lot of women. Finding the right size and choosing styles for their specific needs requires an environment free of embarrassment and judgement. At Zivame, we help women choose the right size and perfect fit, ensuring a private, comfortable and discreet shopping experience,” says Lokhandwala.

While lingerie can sometimes be prohibitively expensive, Vermani points out that Clovia’s feedback-led design approach helps it keep pricing competitive.

The brand creates each product in small quantities, and uses technology to predict future sales based on customer feedback, thereby determining the right quantities for production. He states, “With this approach, we have created a fashion brand that is low on cost, high on consumer appeal and efficient in inventory, leading to better margins and cash flows.”

(Published in Brandwagon, Financial Express)

Over the past five years, legacy players have made a slew of investments in D2C startups. 

Marico has acquired men’s grooming brand Beardo, beauty brand Just Herbs and breakfast brand True Elements. Similarly, Emami acquired vegan cosmetics brand Brillare Science and grooming brand The Man Company. It recently picked up a minority stake in nutrition company TruNativ. Colgate-Palmolive and Reckitt both hold minority stakes in Bombay Shaving Company, whereas Wipro Consumer Care has invested in The Ayurveda Company. ITC has invested in baby and mother care brands Mother Sparsh and Mylo.

Devangshu Dutta explained the reasons behind the trend of larger FMCG companies acquiring D2C brands.

Written By Mukherjee, ET Bureau

Top listed retail chains such as Aditya Birla Fashion & Retail, Avenue Supermarts and Tata-owned Trent are going to lead store additions through the next financial year, as they double down on expansion after the pandemic, company executives and analysts said.

As per a recent report by ICICI Securities, 16.7 million square feet of retail space would be added by eight large, listed retail chains between FY21 and FY24 as compared to 8 million square feet added in the preceding four years of FY18-21. These companies also include Titan, Bata, V-Mart, TCNS and Shoppers Stop.

The buoyed sentiment comes after the recovery of retailers to more than their pre-Covid levels in the last two quarters, and is also driven by pentup demand, strong sales despite increasing prices and expansion into small-tier towns, the report said. There has been an expansion of the market which is happening along with a consolidation, said Devangshu Dutta, chief executive of consulting firm Third Eyesight. “Not all locations might turn out to be viable, but in every expansion cycle there are boom and bust. And the bust is not as big as the boom. Right now, we are in the expansion cycle,” he said.

Aditya Birla Fashion & Retail managing director Ashish Dikshit told analysts recently that the company would expand rapidly since plans were held up in the last two years due to the pandemic, with faster growth for fashion business, ethnic wear and inner wear. The company, which had raised ₹2,195 crore from GIC Singapore, intends to invest ₹600-800 crore for expansion in the next couple of years.

“…we continued to believe both in the long-term growth potential of the market and intrinsic strength of our brands and we feel now the time is to accelerate to catch up on what we have not done over the last 12 to 18 months and I would go back almost till the beginning of the Covid period from 18 to 24 months where some of our growth initiatives have held back,” said Dikshit.

As per the ICICI report, Avenue Supermarts would add 7.5 million sq ft during FY21-24 for the DMart stores as compared to 3.9 million sq ft added in FY18-21. Aditya Birla Fashion & Retail would add 3.1 million sq ft as compared to 1.2 million sq ft in preceding four years, while, among others, Trent would add 2.7 million sq ft (vs 1.5 million sq ft), Shoppers Stop would add 0.8 million sq ft (0.2 million sq ft) and Bata would add 0.7 million sq ft (0.2 million sq ft).

India’s largest retailer, Reliance Retail, too has accelerated expansion plans including taking its stores into new geographies, Gaurav Jain, head of strategy and business development told analysts recently.

Source: economictimes

Financial Express, 17 January 2022

The e-grocery market has seen the emergence of new-age, hyperlocal players, each outmaneuvering the other in terms of delivery timelines. Vaishnavi Gupta asks experts if online and offline grocery retailers ought to worry as quick commerce companies like Dunzo, Zepto and Blinkit, which promise delivery in a matter of minutes, get in the fast lane.

‘Knowing your customer’s needs is key’ – Devangshu Dutta, Founder, Third Eyesight

The answer to various questions around the e-grocery space in India lies in how you respond to this one question: if grocery is delivered tomorrow instead of in 10 minutes or even on the same day, who cares? Knowing the customer you are targeting, and what they need, is what helps in crystallising a unique value proposition. The online grocery market is made up of diverse customers with diverse needs/ wants. There’s a whole spectrum from digital natives to those for whom shopping online is an add-on for specific products or specific needs. Figuratively speaking, most customers won’t put all their grocery eggs in one basket.

If ‘authoritative selection’ is the value proposition you want to play off, a hyperlocal infrastructure is virtually impossible to create. On the other hand, if hyperfast, hyperlocality is what your customer is after, then product selection must be strictly narrow. Time-criticality is also determined by the nature of the product. Fresh produce that is ordered regularly and frequently won’t shift en masse to a hyperfast website.

‘Impulse purchases small fraction of total purchases’ – Alagu Balaraman, CEO, Augmented SCM

Customers normally plan bulk purchases and prefer to get them out of the way. So, fewer orders are more convenient. Customers also like to browse for new brands and packs. So, it is likely that a 10-minute delivery will be useful for impulse purchases or emergencies. This accounts for a small fraction of the total purchase basket of the customer. Servicing small orders will raise the unit delivery cost per item. Initially, this might be funded by investors, but eventually, the customer will pay. Or will they?

From a sustainability perspective, the “oops I forgot” or “I want it now” style of purchase is counter to the green style of the new generation. Having small orders transported to doorsteps will substantially damage our collective carbon footprint and aggravate climate change issues. We have seen this excitement over hyperlocal delivery companies before — first in 2015 and again in 2018. Most have retreated on plans or have allowed themselves to be acquired at presumably modest valuations.

‘E-grocery profitability a major challenge’ – Rajat Wahi, Partner, Deloitte India

The majority (around 85%) of the grocery sales are done through the 10-12 million kirana/ mom-and-pop stores spread across India; 8-10% sales happen through modern retail chains; while online sales account for less than 3% of the total grocery sales today. Online grocers need to surpass the services that end customers demand — such as products to suit local tastes, sales credit, instant delivery on orders via phone or WhatsApp, small orders with no minimums, personal touch, returns and exchange — which is being done at a very low cost and margin by the kirana stores.

This is a tall order for e-grocery players. They are tying up with kiranas for last mile order fulfilment and delivery, offering a differentiated range of products, and better value using their EDLP (every day, low price) model, focussing on fresh meats through a better cold chain, offering credit and discounts, and more. Unless we see a major consolidation of retail in the coming years, building a successful and profitable e-grocery business will continue to be a major challenge.