Food Tech And The Latest Developments

By lavinaagarwal |Email | Apr 23, 2018 | 10248 Views

The food technology sector is under a boom. The recent developments in the industry where we have seen new players and the existing players working towards the technology. India has seen a lot in the recent times, from food apps to new techs and satisfying consumer need with the latest technology usage. 

An elevated growth sector, the Indian food industry is poised for even greater growth with the use of tech and estimated to $894.98 Billion in size by 2020, while the food service industry is expected to reach $78 Billion by 2018. In addition, B2B foodtech startups like HungerBox, which recently raised $2.5 Million, are identifying newer segments to target and are positioning themselves uniquely in the market.

As an active investor in this space, I see a number of business plans in the foodtech segment   after all, we are all passionate about food. The first and foremost submission I have is for entrepreneurs to distinguish between a passion that is a lifestyle business and one that is a scalable, investable business.
Uber launches UberEATS, OLA acquiring Foodpanda, and Amazon launching its delivery service. These three giants will take this high profile battle for market share in the Indian foodtech space to a whole new level, in a completely different industry.

With the industry moving towards consolidation to build brand portfolios comprising multiple services and products, the sustenance of standalone food delivery companies will be difficult in the long term.
Segments like grocery delivery, personal chefs, box delivery, and on demand meals are becoming increasingly popular, leading to an unprecedented number of startups joining the race for market share.
While some ventures with a unique idea managed to survive, others succumbed to market forces simply due to bad timing or lack of funding options. The sector received a mere $78 Million worth of funding in 2016, in comparison to the $500 Million in 2015.

Promoters need to realize that the total number of transactions by consumers is quite small, while the costs of delivery, customer acquisition, and daily operations are quite high. This makes pure play food delivery services an expensive proposition for most startups.

With the industry moving towards consolidation to build brand portfolios comprising multiple services and products, the sustenance of standalone food delivery companies will be difficult in the long term.
Uber launches UberEATS, OLA acquiring Foodpanda, and Amazon launching its delivery service. These three giants will take this high profile battle for market share in the Indian foodtech space to a whole new level, in a completely different industry. India is a huge market, and we have a soul connection to food. We are a diverse country with a plethora of regional cuisines.

On the consumer front, high real estate costs, pilferage, staff training, irrational government policies make it tricky to establish a successful business.The Paperboat Effect concluded that packaged Nimbu Pani would be the best seller in India! Thanks to Paperboat, the sector is seeing a lot of activity with a host of firms packaging traditional food in modern formats. Examples include Indian flavour sauces and spreads, restaurants like Burger Singh and Wow Momos appealing to Indian taste buds I love Tandoori momos but am not a big fan of their chocolate momo. This trend will continue to see a host of product launches, whether it is firms like Activ8me, which places vending machines in corporate offices stocked with Yoga Bars, healthy snacking options, and cold pressed juices, to a host of companies exploring vegan, gluten free and diabetic friendly products.

Itâ??s All About Convenience   The modern consumer is looking for convenience. Inner Chef posts better quarter on quarter numbers and others like Lets Meat from Jaipur, that recently launched in Delhi makes it easier to get pre cooked food delivered. 2017 saw a host of new players in the frozen and ready to serve food category, in part driven by retailers like 24-Seven stocking ready to eat food. On every visit to Modern Bazaar or Le Marche, there is always a new promotion to taste.

Source: HOB