The online meat startup sector in India was once a boom and it was basically driven by the COVID-19 pandemic. Startups like Licious and FreshToHome witnessed considerable early successes. Licious became a unicorn in 2021 and was valued at $1.47 billion. FreshToHome raised $104 million in 2023. Today, the companies are facing significant challenges. They are undergoing through a period of substantial losses. Licious reported a loss of Rs 500 crore in FY23 and FreshToHome recorded a loss Rs 409.5 crore in the same period.
Several factors are being pointed out for the downturn. Consumer behavior has largely reverted to traditional habits as buyers mainly prefer to inspect meat in person for freshness as well as quality. Moreover, local meat vendors usually operate with lower overheads due to the absence of high-tech cold chain systems.
Competition from established FMCG brands such as Godrej and Venky’s has further tightened the market. These brands leverage their long-standing presence and supply chains. Startups have been forced to adapt to new models to sustain their operations. Many are moving away from the direct-to-consumer (D2C) model and embracing business-to-business (B2B) strategies. They are supplying to restaurants, hotels and other commercial entities. Captain Fresh has changed the focus very differently. It is entirely dealing with B2B and international markets to stabilize revenue streams.
Moreover, cold chain infrastructure in India is fragmented and this is a critical challenge too. Maintaining product quality for meat, seafood and other perishable goods require significant investment in logistics and storage. This is the reason that startups like ZappFresh are diversifying their distribution channels. They are now basically seeking to balance between B2B and D2C operations to reduce losses and manage their inventories in a better way.
