BY ROBIN GHOSH
( FORMER CHIEF ECONOMIST, BENGAL CHAMBER OF COMMERCE AND INDUSTRY)
KOLKATA, 14 APRIL 2023:
Meal subscription is an emerging space in the food business.
Though meal subscription is a tried and tested model in the western countries, it is new in India.
Meal subscription business is sprouting in India . According to a research report the healthy meal subscription market is valued at $ 3732.8 million in 2022 and is expected to touch $ 13,757.7 million by 3032 , growing at a CAGR of 14%.
The scope for healthy meal subscription market being wide, startups are coming up in this segment . At present, there are 25 startups and many more are in the pipeline.
Sprink, a Bangalore based start up at present caters 10,000 meals a day, and plans to expand its operations in other cities soon.
The winning strategy of startups over cloud kitchen and food aggregator is the price point.
Startups like Sprink are able to keep their price point low as compared to aggregators like Zomato and Swiggy because of two reasons.
First is : since Zomato or Swiggy has to deliver within stipulated time, they follow a one rider one order system. And as a result, the customers have to bear Rs 30 to Rs 70 more as delivery charges.
On the other hand startups like Sprink, where one rider makes numbers of deliveries between 50 to 100.
Secondly, startups offer fixed menu saving on material sourcing and preparation time.
If you are buying from Zomato or Swiggy, let us observe what happens?
Even if the meal is priced at Rs. 120 to Rs. 130, there is sales tax Rs. 15 to Rs. 20, delivery charged Rs. 40 to Rs. 50 and packaging charges Rs. 15 to Rs. 20 – every meal price coming to Rs. 180 to Rs. 200. As against this, startups offer a 30 day meal subscription covering all costs at a lower price.
The Meal subscription model has its co- ordinates. Here, the priorities are: it must be home cooked, wholesome, diet oriented.
It should be low calorie and low carb food .
To ensure success, quality and content is no doubt important – but – to scale up the business – an anchor brand needs to be developed and promoted with lots of creativity and innovations.
Many food tech companies have sprouted and even bagged funds from venture capitalist but not many could log success. This is because of a flawed business model.
To ensure success, what is required is a tech leveraged business model with the right mix of factoring of price band, logistics and right alignments.
Besides evolving an appropriate business model, the meal subscription business has a major barrier – people do not wish to commit to something for a long time. The public favourite model is cash on delivery
But, it is changing. Market is very big and things are catching up.
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