Food is turning into big business in India, thus creating significant opportunity for start-ups within the sector. This is further fuelled by the rise in the packaged food segment and the fact that the food industry is expected to reach 36 billion by 2020. Investor interest in the food sector is at an all-time high with many venture capital funds and PE funds having backed various business models, viz. from QSRs, delivery-only food ordering apps, food aggregators over the last 5-7 years.
Leveraging this opportunity is
Yumlane, a digital FMCG food brand with a unique business model that aspires to be the ‘Coke of Food’. Mumbai-based Yumlane was founded in March 2016 by Hitesh Ahuja (with co-founders Rahul Kumar and Rueben Ghosh), a digital commerce and FMCG food enthusiast with over a decade experience on the PE/VC. Hitesh was earlier a VP with New Silk Route Private Equity and played an active role in the investments firms such as Cafe Coffee Day and Adigas and an Executive Director / Partner in Lebanese QSR, Maroosh.
In an interaction with sujata Sangwan of BW Disrupt, Hitesh Ahuja, Founder & CEO, Yumlane, shared details about his venture.
Brief us about your business model. What inspired you to start Yumlane and how does it work?Hitesh strongly believes that good food at an affordable price should be the fundamental right of every Indian. Food on – the -go is a white space category in India and it provides the team with the opportunity to add a new consumption pattern for the consumer.
Given that the lives of Indians are growing increasingly busy, the food-on-the-go format is the perfect antidote to being constantly on the move and short of time. Yumlane products are not just tasty, fresh & 100% preservative free, but quick, accessible and most of all affordable. The company aspires to build India’s first Digital FMCG Food brand and become the ‘coke of food’ by leveraging India’s large network of retailers (16 million stores) to build a strong presence across the length and breadth of India.
Yumlane has a very systematic process of operation, which has been highlighted below:- Food, packaging, box manufactured from third party food processing facilities,
- Products being transported in temperature control conditions,
- hand it over to distributors who would later pass it on to retailers
- Consumers making a purchase from the retailer or any point of sale
What are the unique key points of Yumlane?Yumlane’s business model is B2B and depends on traditional channels of FMCG distribution – general stores, organised retail chains such as Hypercity (with whom they already have a tieup), and future partnerships are being planned with D Mart, Food Bazaar, etc.
When it comes to manufacturing, the process is streamlined with clear divisions of labour – Yumlane partners with ISO-certified and FSSAI compliant suppliers to procure from all over India for manufacturing. This ensures hygiene and safety in the process. The manufactured food is then packaged according to strict standards and Yumlane’s logistics partners are responsible for the last-mile servicing.
How is Yumlane different from the existing competitors?Yumlane’s consumer insight is that Indians are continue to lead busier lifestyles and are always on-the-go. Being busy is perceived as cool. Yumlane wanted to play up on this consumer insight and hence has launched snacks and meals. The current scenario is that they are inundated with unhygienic and unbranded food options through roadside snack vendors. The brand is augmenting the consumer experience by providing an innovative snack or meal box at affordable prices.
Yumlane addresses the growing time starved Indians and looking for hygienic, affordable and delicious food.The brand has differentiated itself from existing competition by offering a consumer website / app pick up location option wherein the consumer walks in to pick up the snack / meal.
What is the funding status?Yumlane has raised two rounds of funding since inception from angel investors Binny Bansal and Anupam Mittal among others and secured seed funding from Orios Ventures totaling $1M.
How has been the consumers’ response so far?Consumers have welcomed the novelty of the concept of snack-in-a-box or meal-in-a-box at pocket friendly prices. We have received great thumbs up on our variants, i.e., Momo, Pizza in snacks and Oriental Meals and are inching towards 100,000 boxes sold in less than a year with huge % of repeat buyers.
Given the ease of consumption there are various use cases for consumption and offers to choice to consumer to anywhere the consumer wants.
What are the traction details?Yumlane has three pronged channel growth –General Trade (Unorganized retail), Modern Trade (organized retail), Institutions (Canteens, Railways, Corporate Parks etc)
In eight months of operations, the brand grown across three channels and cumulatively sold 100,000 Yumlane boxes across the aforementioned channels and has potentially acquired a customer base of 35,000 to 40,000 customers (assuming 2.5x a month consume Yumlane).
How do you look at expansion?Yumlane has a business model in place that is scalable. They plan to expand to Pune and Bengaluru in Q4 2017, and their target of selling 1 Mn boxes a month by March 2018, seems to be on track.
What are your marketing plans?Marketing is focused on below-the-line activities – in-store activations and out of the store activations.
What have been the biggest learnings so far?Our biggest learning in our short journey thus far has been – offline distribution is a limitless ocean and the more we seem prepared to grow MoM the less we are given the dynamic growth which is underway!
What is the market size and opportunity?Currently the total FMCG market size has crossed $185 billion. Food is turning into big business in India, thus creating significant opportunity for start-ups within the sector. This is further fuelled by the rise in the packaged food segment which is expected to reach $36 billion by 2025.
