“The power of food is spiritual! It not only brings the whole family together on the same table, but also brings the whole world together,” and we at Chatur Ideas verily accept this quote without a shadow of a doubt. India with it's insatiable and ever increasing appetite for new offerings in food-related services has become the next big market in the Global Food Industry space. To top that the food technology space in India is quite literally matured and evolving every day, and it is hungry to gobble up many new players with unique business offerings and scalable models.
Indian Venture Capital firms are literally drooling over food-tech startups. To put the money where the mouth is Chatur Ideas decided to highlight some key facts about the food- tech startup industry.
• Food Services industry currently is a $50 billion market.
• The Food Delivery Market in India is worth $1.6 billion
• The Food Delivery Market is growing at a rapid speed at 30% per year.
• The average order size is Rs. 400 and the top six cities account to 40% of the market.
• Food-Tech Industry is growing at 16-20% every year
• The global organic Food Market will grow by staggering 16% by 2020, according to TechSci Research
Alok Goel, CEO, New businesses, Freecharge and Advisor cum Investor in TapCibo says, “The year 2010 was the year of cabs. It looks like 2015 is turning out to be the year of food tech in India. There are about a dozen companies. Some are Internet restaurants; some are curated food marketplace and others are trying to be logistics arm for restaurants.”
Food Market is massive and everyone eats food multiple times a day. The creation of value adding services for customers and the repetitive ordering behaviours has created a huge space for many food-tech driven businesses. So if you are an aspiring entrepreneur who wants to make a mark in the food-tech business, we have created some insights that could help you start your entrepreneurial journey in the Food Startup space.
a) Know all the ‘knows’ of the industry…
Before you kickstart your business in the Food Industry it’s imperative to know few important things about the industry, which are Statistics, facts and numbers, if it’s a food delivery startup then to locate and segment your consumers. Get to know your consumer insights first by doing a test run. Also, get to know your market and its timing. India is a country which is skipping years in emerging technologies, earlier we ordered food on the telephone, now we do it on our smartphone apps. It’s very important to keep a tab on time and change accordingly.
b) See the opportunities…
Despite there are many key players targeting various aspects of Food Industry like Zomato, Tiny Owl, FoodPanda, etc. There will always be an area of opportunity, which you can highlight and make a strong fundamental business out of it. There are huge potential opportunities in the space of design, packaging, kitchen appliances, and logistics. In fact, some are also exploiting opportunities in artificial intelligence to create novel recipes and spice combinations.
c) Do things differently…
One of the clear leaders in the space of Food-tech Industry is Zomato, Deepinder Goyal of Zomato says, “I want to do things differently. Even if the path is defined and right we would like to go somewhere else and create our own path.” The VC’s in this space are using the ‘Spray and Pray’ approach, which means they are investing small sum of funds in many food-tech businesses because they are afraid they will be too late to reap the benefits. So given this perception they will wait and watch which team they would want to back long term, and that leads to an affirmed eventuality of many Food-Tech startups shutting down in near future. So unless and until you don’t have enough passion and the differentiation factor in your business we would recommend you to not venture out in this space.