[Behind the Scenes] What Licious needs to organise India’s $30B meat consumption market

In an app-ridden world, getting anything from a ride to a safety pin on demand is second nature. Yet, it’s the ‘behind the scenes’ of apps that seamlessly creates synergy. ‘Behind the Scenes' is YourStory's journey into understanding the precision with which all these dynamics work together.

Monday November 25, 2019 , 6 min Read

In the latest series, YourStory goes ‘Behind the Scenes’ to understand the workings of some of the most intriguing tech startups in the Indian ecosystem. In this edition, we profile Licious, the Bengaluru-based meat brand. In four years, the brand has become synonymous with online meat delivery. But what makes this startup tick and what does it take to build a meat brand?

Dressed in gumboots, wearing shower caps and rubber aprons, the first shift of workers at the Licious factory at Hoskote get ready to receive a fresh stock for cleaning, treating, and packaging.

Their shift started sharp at 6 am and a truck came in with fresh stock of chicken. As the meat comes in temperature-controlled trucks to the factory, the meat’s temperature is first tested and then moved for further tests. Then, it is packed and sent for delivery.

There is a clockwork precision in ensuring that the meat is delivered to every customer fresh, clean, and hygienic. The startup works on an ecommerce model and customers can order on the company’s website or its app.

Licious has partnered with 180 vendors to date. It has 56 delivery centres and an employee strength of 2000.

The startup has built contractual arrangements with large institutional meat vendors who are trained in managing livestock and meat handling techniques, according to international standards. It is also FSSC 22000 certified.

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The emotions of meat

India consumes meat worth around $30 billion every year and the demand is only expected to grow. About 90 percent of this demand is addressed by the unorganised market.

But, Abhay Hanjura and Vivek Gupta saw an opportunity for an entrepreneurial venture here. The two believe that meat is a product that evokes an emotional response from customers and there wasn’t a player in the country that could cater to them.

“There is an imagery of a carcass, a butcher chopping meat in ambient temperatures, and, of course, the smell always associated with buying meat. But it doesn’t have to be that,” says Abhay.

When the duo dug deeper, they found that the market could be bigger, given that many people had concerns about the quality of meat available. “It isn’t like people do not want to cook or consume meat in India. The market needs a transformation,” says Vivek.

Abhay adds, “But meat in India has a very strong negative perspective. There are three things that are shared in black polythene bags - sanitary napkins, condoms, and meat.”

Even their families were uncomfortable with the idea of establishing a meat brand. But the two entrepreneurs had a simple idea – give consumers the best quality meat brand.

Bengaluru-based Licious, founded in 2015, is an online meat brand that delivers fresh and clean meat products. Now, after four years, the startup even has an offline experience store in Gurugram, which opened this June.

At present, Licious claims to be delivering an average of 10,000 orders in a day and has an average basket size of Rs 700. Since its inception, the startup has raised more than $65 million.

The end-to-end model for meat

“We initially thought of the aggregator model but the market scenario showed that a farm-to-fork model seemed best,” explains Abhay.

It all begins with the sourcing. The duo began working with livestock and poultry farmers. They set in a list of expectations and processes even beginning with how the stock are reared and handled. The task began with setting ironclad standards in terms of caring for the livestock, feeding, and breeding in a way that ensures the end consumer gets the best produce. And this goes across all categories.

The meat reaches the factory that is temperature controlled. Licious’ Hoskote factory is divided into three parts - one for chicken and white meat, one for red meat, and one for seafood. After the meat is sorted, it is then tested for quality and stored in temperature-controlled rooms.

The factory also has a laboratory that tests different elements like acidity, toxicity, shelf-life, and other factors that determine the quality of the meat. “We are working on proprietary material and software for that,” adds Abhay.

It just isn’t the meat though. Even the ice used to store the meat is made in-house through a proprietary machine.

“When we looked for ice, we found that the quality of ice itself wasn’t good. The water used to make the ice isn’t hygienic. So, we decided to make our ice. For that we needed an RO water purifier, which is installed in the factory,” says Vivek.

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Bringing in technology and data

Since Licious sells highly perishable items with a delivery time ranging between 90 and 120 minutes, demand forecast is critical. This is where the startup’s algorithm and predictability engine come into play.

This is based on several factors, including past sales, traffic on the website, what customers are browsing and clicking on, how many times a product is in stock or out of stock, times each product was added to the cart and checked out, etc.

Each data input makes Licious’ engine smarter – even preventing wastage. In an earlier conversation with YourStory, Abhay had told us Bengaluru is the most efficient city with only three percent of wastage, which was at 40 percent when Licious started.

One of the startup’s unique features is allowing customers to add out of stock items to their cart and check out. The founders claim that this helps them optimise their deliveries. While in-stock items are delivered within 120 minutes, out-of-stock items are delivered the next day.

Control the entire process

Abhay and Vivek believe that what sets Licious apart is its control over the complete supply chain.

This ensures that every member of the team looks at Licious as their brand and company. From the delivery staff to butchers and even customer service executives – everyone is on the company’s payroll.

The startup’s offline store is another step towards bringing in awareness and not restricting Licious to one business channel. The team adds that it is evolving into an omnichannel format to provide customers with a real touch and feel of the brand.

Why Gurugram? Licious feels that the region has a deeper penetration of semi-organised and organised meat stores.

The centre is also completely knife-free and has only pre-packed products brought directly from the production plant to ensure no compromise on quality and hygiene.

Working the competition

India’s fresh meat industry is worth Rs 180,000 crore while its seafood industry is considered one of the biggest in the world, exporting a wide range of products.

But, Licious is not alone in this market. It competes with Easymeat, Zapprfresh, FreshToHome, and even grocery giant Bigbasket.

At present, the startup is looking to launch more products to its packed food range and is already operational in seven cities.

Abhay says, “We might grow at a relatively slow pace, but it doesn’t matter much. Our focus is to build a food brand out of India, one that is loved and consumed globally.”