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How TenderCuts is Rebooting the Meat Business in India with its Omnichannel Play

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The online meat market in India has been growing rapidly and has been the strongest in recent years. With rising protein consumption in the country, this category is bound to grow by at least 25% in the foreseeable future. However, companies with a shorter supply chain and those offering high-quality products will stand to corner major market share and expand their customer base.

One such example is TenderCuts, a Chennai-based D2C meat brand that started operations in 2016. The company follows an omnichannel business model and has a presence in both online and offline trade channels. Within five years of its inception, TenderCuts has been successful in boarding over a million customers on its platform and registering a 200-300% scorching pace of growth. By establishing direct partnerships and integrating with local farming and fishing communities, and thanks to its very robust and shorter supply chain driven by cutting edge technology, TenderCuts is able to deliver high-quality fresh meat and seafood to its customers within 24 hours of the product being sourced.

  • The meat market in India has huge potential and is valued at nearly $100 billion. The overall size of the meat and seafood market in India is estimated at a whopping INR 2,20,000 crore. But the meat and seafood segment is majorly unorganized and the share of the organized market for the entire meat and seafood sector is less than 2%.
  • The online meat market has been consistently growing in India and in the bigger metro cities, it currently accounts for 7-8% of the meat market. This fact, in itself is very surprising, considering that the online meat market was non-existent until a few years ago.
  • TenderCuts’ business mission is to provide fresh meat and seafood that is antibiotic- and hormone-free. The company is pursuing its mission and goals by establishing direct partnerships with the local farming and fishing communities and by forging strong backward linkages and supply chain integration to guarantee absolute freshness.
  • By virtue of its omnichannel capabilities, its strong online presence in three major markets of India and thanks to its retail store footprint, TenderCuts says that its supply chain is the shortest compared with the competition and other online meat players in the market.
  • It’s been a rocket-fuelled growth for TenderCuts, which posted Rs. 30 crore in revenue in the second year of operations, climbing to Rs. 60 crore in the third year and touching Rs. 100 crore in FY20-21. This fiscal year, the company expects to close with about Rs. 200-250 crore in revenue and business.
    With India moving towards becoming a more protein-aware country, the demand for clean, fresh, hygienic and quality meat products is rising steadily. The Covid pandemic has further heightened the awareness about consuming safe, hygienic and healthy food products, thus increasing the overall consumption of meat in our dietary intake. According to an IndiaSpend analysis of national health data, around 80% of Indian men and 70% of women consume eggs, fish, chicken or meat occasionally, if not on a weekly basis. With rising disposable incomes and greater awareness about consuming protein-rich foods, Indians have taken to eating eggs, chicken, and meat more frequently and in greater amounts.However, the market for meat in India remains largely unregulated and unorganized. “Living in Chennai, it struck me that buying meat invariably forced you to visit the wet market, which offered only a limited option in terms of consumer choice and where issues around product quality, grading, safety and hygiene were glaringly sub-par and in no way comparable to the experience that I had in Europe and other countries,” says Nishanth Chandran, Founder & CEO, TenderCuts, a D2C meat brand with an omnichannel business model and a presence in both online and offline trade channels.

    “Our own research and field studies showed that almost 90% of Indian population is non-vegetarian. And though the sector remains largely unorganized, the meat market in India has huge potential and is valued at nearly $100 billion. The overall size of the meat and seafood market in India is estimated at a whopping INR 2,20,000 crore. But the meat and seafood segment is majorly unorganized and the share of the organized market for the entire meat and seafood sector is less than 2%,” says Chandran. However, in the past two years, with the Covid pandemic raging across the world, health and hygiene have become top concerns for consumers and have acted as a growth driver for the organized meat sector.

    Looking at the market size and opportunities, it is only natural that many online meat players have entered the market over the past few years. “As a result, the online meat market has been consistently growing in India and in the bigger metro cities, it currently accounts for 7-8% of the meat market. This fact, in itself is very surprising, considering that the online meat market was non-existent until a few years ago. While the online meat market has seen exponential growth in some cities, it continues to grow at a rapid pace pan-India and I would say that it is registering a 5-10% growth in major urban cities of India,” opines Chandran.

    He adds that despite the huge size of the market, the per capita meat consumption in India is very niggardly, at just about 4-5 kg a year, which is extremely low compared with many western countries with about 40-50 kg of per capita annual meat consumption and which could go as high as 90 kg for some countries. Given the piffling low per capita consumption of meat in India and looking at the huge swathe of meat-eating population in the country, along with the overall meat consumption going up, there exists a humongous potential for volume growth and opportunities for capacity expansion, which can be further accelerated if consumers are given the assurance of good quality products with convenient home delivery and at a price point that is both affordable and competitive.

    “The online meat market has been growing rapidly and has been the strongest in recent years. With rising protein consumption in the country, this category is bound to grow by at least 25% in the foreseeable future. However, companies with a shorter supply chain and those offering high-quality products will stand to corner major market share and expand their customer base,” observes Chandran.

    Offering a Healthy and Hygienic Alternative to India’s Unorganized Meat Market

    Backed by a purposeful vision and an action plan to bring about a change in the way the meat market operates, Chandran founded TenderCuts in 2016. “The unwholesome state of affairs in the meat market set me thinking. I had sold off my earlier company and I was looking for the next big thing to do and it occurred to me that my next business call could rightly be in the meat sector. I wanted to bring to the meat market wholesome buying alternatives that were sorely lacking even in a big metropolitan city like Chennai until as recently as 4-5 years ago. With this vision and purpose, I launched TenderCuts, which started its operations from Chennai and has since gradually expanded to other cities in the South like Bangalore and Hyderabad.”

    TenderCuts’ product basket offers the widest range of products across Poultry (chicken, quail, country chicken), Mutton (goat/lamb), Seafood & Fish (50+ varieties), Marinades (ready to cook dishes), Cold Cuts, Eggs, Masalas, and Dry Fish. It also provides specialized cuts across the meat and seafood categories, which are typically not available in the regular butcher shops. The company’s business mission is to provide fresh meat and seafood that is antibiotic- and hormone-free. The company is pursuing its mission and goals by establishing direct partnerships with the local farming and fishing communities and by forging strong backward linkages and supply chain integration to guarantee absolute freshness.

    “With the increasing concern for health and hygiene among consumers, there was a demand for a space that provides products adhering to all the freshness standards and guidelines of FSSAI and WHO, which is unfortunately missing in most parts of the meat market in India,” observes Chandran. To point out just one instance that highlights the abysmal quality standards of meat sold in the wet market, FSSAI regulation stipulates that meat should be sold at a temperature between zero and -4 degree Celsius in a chilled state or it should be sold frozen, at -18 degree Celsius. However, finding a place that adhere to these quality and safety benchmarks can prove to be a stretch and neither is it a palatable experience procuring meat from the wet market or even from most meat shops that dot our neighborhoods.

    Quality is the most important factor for any perishable product. “Being in the business of meat retailing means that we are dealing in a highly perishable product and so the quality of the product we sell should be unimpeachable,” states Chandran. To ensure that its products adhere to the highest quality benchmarks, the company has developed its own prediction-and-forecasting algorithm and its own “quality framework”, called QTT, which stands for Quantity, Time, and Temperature.

    As a first principle of TenderCut’s sourcing strategy, quantity and quality are right on top. Time is another factor of essence in this business, and the quality of the product is directly related to the time it takes for the product from the source to reach the customer. The company has ensured a built-in traceability for all its products, which helps it to track the time it takes the product to reach the customer, and thus ensure that the quality is not compromised in any way. By ensuring traceability, the company is able to track and trace the entire travel journey of the product at every stage of the transit.

    Meat is also a cold-chain product and temperature plays an important role in maintaining its freshness and quality. “We have invested heavily in building our cold-chain infrastructure, and in using technology to ensure freshness right up to the last-mile delivery. We are a tech-enabled company with our own tech team and infrastructure, and we have built a lot of technology and systems in and around the business we are engaged in,” says Chandran.

    By virtue of its omnichannel capabilities, its strong online presence in three major markets of India and thanks to its retail store footprint, TenderCuts says that its supply chain is the shortest compared with the competition and other online meat players in the market. We ensure that all our meat products adhere to these three principles of QTT, so that they conform to the highest quality standards, are always kept at temperatures between zero and -4 degree Celsius, and reach the customers within 24 hours of being sourced from the farm or the catch,” avers Chandran.

    Using Technology to Give Supply Chain and Delivery a Competitive Advantage

    The company follows a farm-to-fork direct procurement process to ensure freshly cut meat and seafood are provided and it uses its own technology to ensure freshness and hygiene. The technology can process over 500 orders within two hours from its own neighborhood stores. The technology developed has also enabled the company to introduce numerous checks and quality controls, right from the breeding of livestock, selection, cleaning and processing, and last-mile delivery. Apart from using cutting-edge technology, the company has a proficient well-trained in-house team to enforce rigorous quality measures, including the selection of meat through stringent grading and rigorous standardization, and automated handling.

    TenderCuts has developed a robust infrastructure  for building the omnichannel solution from customer experience, foolproofing its supply chain management, inventory forecasting and last-mile delivery to the end customer. Developed in-house by the tech team of the company, the technology enables the company to ensure freshness and hygiene of the meat delivered and guarantees absolute freshness of the product. All orders – both for retail and online – are freshly cut from the stores and delivered within 1-2 hours. By building direct partnership with local farming and fishing communities and developing strong backward linkages, TenderCuts ensures that its meat and fish travel a very short distance to reach the consumer.

    Leveraging Omnichannel Play in the Meat Business

    The company calls itself the only meat and seafood retail player in India with an omnichannel business model and a strong presence in both retail and online. “Our omnichannel services and approach to the market has helped us to connect immediately with our audience and consumers. For any startup and D2C brand, the first and foremost challenge is acquiring the customers. Through both our offline and online play, we have been able to leap over this hurdle and acquire over a million plus registered customers on our platform. Our omnichannel strategy has provided us with a 360 degrees access to the market and customers which, in turn, has not only helped to expand our customer base but also improved the quality of our acquisition. Our stores act as a catalyst to reach the consumers since they are able to feel and experience the product and we have been able to gain their trust. This approach has also helped the consumer from making the shift from the unorganized sector where hygiene is a grave issue to an extremely hygienic environment at our stores,” contends Chandran.

    In the past six months alone, apart from its online operations, the company has also opened 25 physical stores in different locations and currently it has some 50 stores across Chennai, Bangalore and Hyderabad. Of these, 25 stores are operational in Chennai, 15 in Hyderabad, 10 in Bangalore, and some new stores are in the process of becoming operational. “Our physical retail stores also double up as fulfillment centres for the online orders apart from generating their own offline sales. But our identity is of an online meat company with a retail store front and an offline retail presence and not that of a retail company with an online footprint. Since over two-thirds of our business comes from online orders, the customer trading area at our physical outlets is only 200-300 sq.ft. even as the stores themselves are about 1000-1200 sq.ft. in retail space. Most of the space at our retail stores is used for processing and delivering the online orders and only a small part of the stores is used for retail,” states Chandran.

    The company says that it currently services over 2,50,000 orders on a monthly basis. About 75% of TenderCut’s business is generated through its online operations. TenderCut’s meat products are priced more competitively than what one can get for a comparable product in the regular market. Also, meat is one category that people buy regularly and where repeat purchases are more common than in other food categories. “We have a large number of customers who make purchases two to three times a week and 90% of our orders come from repeat customers. It’s a very habit-forming category and if you serve your customers well, they remain with you for the long term,” says Chandran, who believes that this distinguishing feature makes the meat category even more appealing and attractive as a business for organized meat retailers.

    Introducing New Concepts in the Meat Business

    The company keeps introducing new cuts at regular intervals to support the new cooking styles. Customers get an exciting array of choices and they can buy their preferred cuts of meat in any quantity they like. “It’s just like visiting a fancy restaurant that serves a cornucopia of meat dishes with different varieties of meat cuts. However, getting such a wide variety of cuts at a traditional meat shop is unthinkable. But, at TenderCuts, customers can pick from a long catalogue of meat cuts and can choose to buy whatever they want. For instance, one can buy a kg of chicken with more than two drumsticks and go for any of their preferred cuts.

    Another interesting feature that TenderCuts has introduced is to make available ready-to-cook meat in several exciting recipes, forms and flavors. The company is focusing heavily on ready-to-cook products and is looking to add more regional cuisines under categories like Starters, Gravies, Kebabs and Meal Kits. For customers who want to enjoy tasty meat dishes without taking the time to cook for themselves, TenderCuts offers a wide variety of marinated meat so that buyers don’t have to worry about mixing the meat with the right spices and other ingredients. One can take the meat home and get it prepared for eating by just following the instructions in the recipe book without having to go through the whole rigmarole of mixing and marinating the meat.

    The Roadmap Ahead and Future Plans

    In keeping with the scorching pace of growth of the online meat market in India, TenderCuts has grown from strength to strength in recent years and the numbers speak for themselves. The company says it has been clocking steroidal growth in the range of 200-300% year-on year. After starting the business in 2016, when it saw revenues reach Rs. 50 lakh after a few months, the company was able to net Rs. 3 crore in the first full year of its operations. From there on, it has been a rocket-fuelled growth for the company, which posted Rs. 30 crore in revenue in the second year of operations, climbing to Rs. 60 crore in the third year and touching Rs. 100 crore in FY20-21. This fiscal year, the company expects to close with about Rs. 200-250 crore in revenue and business.

    In terms of the scope of its operations, TenderCuts is gearing up to expand its operations to 7-8 cities by the end of this fiscal year. The company is currently focused on further strengthening its position in the major markets of south India where it is already engaged in building and expanding its footprint before moving to the other major markets of India, including cities such as Delhi and Mumbai. “We are in a hyper-local business and so the focus is on building and consolidating the business in the places we are currently operational in and where there exists plenty of room to grow and expand further. But we will be expanding to other major cities in the North and West in due course of time which, I hope, should come about by next year,” reveals Chandran. The company also plans to cross the 100-stores milestone by the end of this fiscal year.

    To keep up with the frenetic pace of expansion and growth, TenderCuts has drawn up an ambitious investment plan. The company raised a funding round of Rs. 120 crore about six months ago. “We have so far invested about Rs. 150 crore in the business, which includes the recent funding we received. Thanks to our strong omnichannel and e-commerce model, many institutional investors have shown interest in the business and we are confident of raising more investment whenever the need for it arises. We might go for another round of fund-raising in the next few months,” informs Chandran.