Ready-to-eat Indian food set to take off in big way
Hyd-based The Taste Company, the first brand to offer instant Indian non-vegetarian food, hopeful of becoming `200-cr brand in 3 yrs
Founded by tech entrepreneur Raju Vanapala last year, Hyderabad-based Instahot Foods Private Limited launched The Taste Company (TTC) brand, which offers a delectable menu of ready-to-eat Indian food products for breakfast as well as meals. It is the first brand in the country to offer non-vegetarian varieties including chicken rice, in the instant food category. "Noodles is not a staple Indian food item. But it commands a staggering market size of Rs 10,000 crore in the country. So are oats and cornflakes. But there is no instant Indian food item that commands such a market size. Our aim is to promote authentic Indian food including non-vegetarian meals in the ready-to-eat category. And we have already 'Taste'd success in our endeavour," Raju Vanapala, Founder & CEO, Instahot Foods, tells Bizz Buzz in an exclusive interview
How the ready-to-eat food segment is doing in India now?
This segment registered stupendous growth during the Covid-19 period. I was told that the growth in that period was over 35 per cent. The growth momentum is still there. Going forward, the segment will witness phenomenal growth as nuclear, double-income families are rising and many people are too busy to cook. But the segment is dominated by foreign food varieties and overseas brands. For instance, a food category like noodles is not a staple food item for Indians. Still, it commands a Rs 10,000-crore market in the country now. Oats and cornflakes, other foreign imports, are also very popular in India. Oats alone has a Rs 3,000 crore market. But sadly, no Indian food variety commands such a market. As per my estimates, Indian food products account for less than Rs 100 crore in the ready-to-eat meal category. The ready-to-eat breakfast category of Indian food is less than Rs 400 crore. Both the categories put together account for just Rs 500 crore. That's very less. The reason is simple. There are no brands that make authentic, quality ready-to-eat Indian food products. That's the reason why we have come up with quality instant Indian food products under our The Taste Company brand.
Do you see ready-to-eat Indian food products gaining traction in the country?
India offers huge growth potential for ready-to-eat Indian food products. There is plenty of scope. When a product like noodles which is consumed as a snack, has such a large market, we can imagine the potential for the Indian products. However, the right quality products should be available in the market. I assume the market should be more than Rs 25,000 crore. As per online food delivery major Swiggy's latest reports, Indians are ordering more and more Indian food, not other countries' cuisine. People are forced to consume foreign food items in the ready-to-eat category as there are no big brands that provide quality Indian food products. We want to address this and emerge as a market leader in the ready-to-eat Indian food segment. That's our long-term goal.
How many ready-to-eat products your brand has on its menu now? Any new products in the pipeline?
It's not easy to make ready-to-eat versions of Indian food products. That may be the reason why there are not many Indian food products in this category. But we spent close to a year and a half on R&D and pilot projects to develop quality ready-to-eat versions of the Indian food items. Non-vegetarian varieties took more time. Apart from quality, we also focused on taste. That's why all our products taste like home-made food. We carried out a pilot project in 50 stores in Hyderabad. The response was overwhelming. Once we achieved the right quality and taste, we launched the first batch of products in the market three months ago.
Right now, we have two non-vegetarian dishes - chicken curry rice and prawns curry rice. We are the only brand in India that offers instant food products in the non-vegetarian meal category. We are in the process of launching two more products – chicken biryani and Gongura chicken biryani. In the vegetarian category, we have 10 products in both breakfast and meal segments. In the breakfast segment, we offer products like semiya upma, pongal, ravva upma. We launched dal chawal, special veg curry rice in meals segment. The preparation is very simple. Food will be ready within five to eight minutes once hot water is added. The price rangeis Rs 79 to Rs 149. Our products have a shelf life of six to nine months. We want to have 30 products in our lineup by the year-end. We want to evangelize instant Indian food products and promote regional cuisine.
What is the manufacturing capacity you have now?
We established a manufacturing unit near Patancheru in Hyderabad. It has a capacity to produce 5 lakh units a month. It's the best factory as we have used the latest technology imported from the US and customised it to suit the Indian requirements. We have invested close to Rs 23 crore in this venture till now and most of it had gone into the 25,000-sft manufacturing unit. Around 50 people work in the plant. We expect that the existing capacity would be enough to cater to the demand for a year or so. Then, we will take a call on the expansion.
How big is the sales network?
We have multiple sales channels- online, offline, and institutional. Our products are available on all the major e-commerce portals like Amazon, BigBasket and Flipkart. We also sell online through our own website (thetastecompany.com). Online sales are doing really well. The good thing is that we are seeing 40 per cent repeat rate in online sales. Four of 10 customers are placing repeat orders within 15 days of the first order. For a new brand like us, it's a very good number. Surprisingly, we are getting orders from small towns also. Online channels account for nearly 60 per cent of our total sales.
On the offline front, our products are now available in Hyderabad and Bengaluru only. We are planning to launch offline sales in Mumbai by end of April. Our plan is to enter one new major city every two months. That way, we will have offline presence in all the metros by this December. Our products are available in 700 touchpoints now. We will have 2,000 touchpoints by 2021-end. We will make some additional investment on the network expansion.
We also started institutional sales. At present, we are supplying to two airlines, a Mumbai-based co-working company and others. To increase our institutional sales, we are in the process of entering into tie-ups with more companies. Talks are underway with a large multiplex chain as well. We have not spent much on marketing till now. It's word-of-mouth publicity that's helping us a lot.
Do you have any plans to raise funds now?
As of now, we don't have any such plans. I made all the investments so far. Our priority is to establish the brand, see that it gets good traction and generate decent revenues. However, we may raise funds after one year or so. I want to see TTC as a Rs 200-crore brand in three years.
What are the main challenges you are facing?
People have misconceptions about the ready-to-eat Indian food products. Many feel they are not safe and healthy. That's not the case now as technology has advanced. We use advanced dehydration technology. We don't use any preservatives. Furthermore, we adopted all the authentic cooking processes. We offer only health products.