When two meat lovers decided to build a brand that would delight people with similar food preferences, they had no idea it would be a sizzling success in just six years. In 2015, Abhay Hanjura and Vivek Gupta had set up Licious, a farm-to-fork D2C brand that specialises in a chicken breast, goat keema and many fish and seafood products. It has also reached an annual revenue rate of INR 1,000 Cr and built a team of 5K people across 14 cities.
We all love stories like Licious, but this sector has a reason to witness such growth. The D2C meat category, a $40 Bn sector globally, is still widely untapped in India. So, the potential and the market opportunity are driving the uptick in India, and Licious has bagged a large portion of that.
Inc42 hosted Gupta on the second day of its recently concluded The D2C Summit where he gave a masterclass on ‘The Secret Sauce Behind Licious’ Journey To A 1,000 Cr ARR Meat Brand’.
With the help of anecdotes and his learnings of the past six years, Gupta explained what happens when a business crosses the INR 50 Cr revenue mark, the challenges of building a business in the perishables category, how to build a robust supply chain and more.
Watch The Session NowHere are some quotations and insights from the session.
“When you look at an opportunity in India, you can get excited by the size of it, but we have to get the fundamentals right to crack that opportunity,” said Gupta.
After a brief introduction regarding his love for meat and the inception of Licious, Gupta explained to the audience how the company reached its current status. According to him, the evolution and scale of any brand are largely determined by three factors: Understanding the basics, Building a unique proposition and Entering new markets and geographies.
When building brands in any category, companies should step out of their comfort zone and choose win options to grow the business first, said Gupta. In the initial stage, there will not be enough capital to position and promote it right. Besides, it will be tough to choose a category, product or city for a particular target audience (TG) and sell specifically to them.
Understanding And Nailing The Fundamentals
To ensure growth and development, one must understand the basics of building a brand. Gupta put three heads under the fundamentals, namely, unmatched proposition, a bunch of mavericks and customer obsession.
“The first few hires are the most important people who will help you build the business. You need to hire people who have a deep-seated founder-like mentality and have complete faith in your vision,” said Gupta.
- Unmatched proposition: The brand should have something that makes it stand out in the market. To scale and grow a business, it is important that a brand is innovative, unique and solves an everyday challenge for consumers.
- A bunch of mavericks: The next and most important factor is hiring the right set of people. Your team needs to know and understand the proposition. The team should be equally excited and devoted to the goal of the business.
- Customer obsession: This is the most important part of the journey. Eventually, the consumer is king. A customer’s preference is primarily led by the product quality and the buying and post-purchase experience. When you are thinking about how to build the product or the service, you need to understand what is happening in the ecosystem and mould the solutions accordingly.
While figuring out the brand’s functions and operations, Licious cofounders Hanjura and Gupta could not find a cold chain across the entire supply chain and were considering building it. Gupta said that for any startup in its initial years with limited resources and capital, more than half has already been spent on hiring the right team, building the product and the likes. However, the supply chain is a critical part of a brand’s journey because the product experience will break without that supply chain.
During the session, Gupta advised brands not to get trapped in ‘what is going on in the ecosystem’. According to him, a brand just needs to focus on two things. First, it should provide the best possible product to consumers. And second, it must do whatever it takes to build that product.
There is just one way to do it right. Figure out consumers’ perception for the said product. There are many feedback mechanisms that can be used for the same.
Challenging Existing Products And Markets
A brand must be built on a customer-first approach, but Gupta revealed that the most important and exciting metric for the Licious cofounders is the required rate of return, or RRR. The startup has been built by answering one most basic question: If a customer has bought a product today, what are his reasons for not returning tomorrow?
“If you are not doing that (focussing on that question), there is something fundamentally wrong. That’s why it is important to keep building your fundamentals right before you start thinking about the market opportunity. I also think this is the bottom-up approach, building one brick after another, as it takes massive efforts and a massive amount of money to acquire customers but it only takes seconds to lose one,” explained Gupta.
What made the journey more difficult for the brand was that there was no content on meat in the ecosystem. Consequently, the customer support team at Licious was not entirely aware of what to tell the consumers when they asked about the products on offer or how crucial their responses could be in the entire scheme of things.
With this realisation, Licious has put together a team of people called the customer happiness cell. This is one of the mechanisms that a brand can leverage to hear the customer’s voice. According to Gupta, this is one of the best mechanisms, and it has always worked for Licious.
“Another important thing is that consumers do not like too much advertising jargon. I am talking about this for the very early part of your journey. If you can stay authentic and do something different, that is good enough,” he added.
Breaking Barriers
After building a unique product and ensuring customer satisfaction, a brand tries to figure out the next move. But as it grows and expands to new geographies, it is important to repeat the success and the learnings from the previous cities.
Gupta had sound advice for brands in this respect — As the business expands to a new city, the city before that becomes the brand’s asset. Add the learnings from there to update and modify the brand’s playbook.
Citing the example of Licious, he said that the brand has always focussed on the learnings and new city launch experiences to strategise further. This year, the startup is ready with its playbook, and it is now more aware of how catalogues, supply chains and processing centres are built.
Gupta broke down the processes and the approach that Licious took as it grew into a bigger brand.
Staying future-ready is another recipe for success. For instance, when brands were busy figuring out a survival strategy amid the pandemic, Licious launched its operations in seven cities and would be expanding to at least 10 more in 2021, said Gupta.
Catch all the sessions and insightful conversations from The D2C Summit — from Gupta’s masterclass to the founders of boAt, SUGAR, Lenskart and the leading VCs from the ecosystem — all at The D2C Academy.
Access The D2C AcademyThe post Licious Cofounder Vivek Gupta On The Secret Sauce That Turned It Into An INR 1,000 Cr ARR Meat Brand appeared first on Inc42 Media.
0 Comments