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INTERVIEW

“We help reduce last mile costs and wastages”
Monday, 14 February, 2022, 08 : 00 AM [IST]
With the popularity of food aggregators and delivery apps, the era of cloud kitchens, dark kitchens which are highly efficient production units without a store front optimised for delivery has arrived. In the absence of organised logistics of food and grocery distribution, our expertise and reliability in food-sensitive delivery infrastructure helps us bag accolades and the revenues, Mansi Mahansaria, founder and partner, Just Deliveries, tells Nandita Vijay in an interaction. Excerpts:

How has your company fared so far and what is your game plan?
Just Deliveries helps foodpreneurs offering perishable or limited shelf life products to expand their omni channel presence in Mumbai and Pune through an efficient data driven logistics network. We focus on increasing sales and reducing wastages at retail store level. We are based out of Mumbai and offer services across Mumbai and Pune. We commenced operations in 2015. Our main challenges have been to train delivery personnel on handling food items and getting the right temperature requirements. Another issue is to keep  costs low so that foodpreneurs can expand across the city comfortably. The food and beverage space sees 26% clients shut shop annually, especially, so during this Covid pandemic. Continuous hiring of delivery boys and drivers which are essential is also  challenging.

It is here, see Just Deliveries having a notable presence across verticals in most Tier 1 and Tier 2 cities, wherever there is organised retail and QSRs (quick service restaurants), cloud kitchens, our services are relevant. This will enable us to have pan-India tie-ups with clients like Compass group and others like BigBasket. Also Just Deliveries was selected as one of the top 5 startups globally that impact food businesses. Research by StartUs Insights looked at 894 logistics startups around the world. Our hygienic shared van delivery model helping foodpreneurs with intra-city logistics for perishables was the winning factor.

What are the key strengths of the company in the wake of competition from Swiggy, Dunzo and Wefast?
The service offerings which Just Deliveries provide are retail distribution.  Recently, store shelves have seen an explosion of niche & gourmet brands, some having limited shelf life like artisanal breads, organic eggs, cheese, paneer meats, artisanal ice creams, plant- based products. These brands need to be regularly seen on the shelves for visibility and stocked frequently due to limited shelf life and lesser freezer spaces availability.  These brands struggle with Real Time Viewing System (RTVS), stock-outs, spoilage, limited store presence due to lack of organised logistic networks. Large distributors avoid them due to their small order values and high fragility, leaving foodpreneurs with low footprints, slow growth and missed opportunities.

Our strength is the knowledge and expertise to handle such food products. We take up daily small deliveries to general and modern trade, mom and pop stores on a shared logistics model. Current portfolio comprises 40 brands and 300 plus stores. Our target is 100 brands, 650 stores, entry into Bengaluru and Delhi.

With the popularity of food aggregators and delivery apps, the era of cloud kitchens, dark kitchens, has arrived. Dark kitchens are efficient production units without a storefront that are optimised for delivery. Further, café chains and organised QSR chains  all dependent on daily stocking of semi-finished food from their central kitchens. While Starbucks and McDonald’s are well serviced, there is no organised service for smaller players. This space is a mess with taxis and autos and tempos delivering crates of food. Hygiene is compromised for cost savings and jugaad logistics techniques are used.

When are you expected to raise the Rs 20 crore funding and for what it would be and when do you plan your entry into Bengaluru, Delhi, Hyderabad?
This round of funding would help us scale operations across tier -1 and tier-2 cities and large logistical hubs. There will be data-driven decision making mechanisms visible within Just Deliveries operations, use of green technology and advanced infrastructure. Further it will be a stepping stone for partnerships with startups. Our entry into Bengaluru, Delhi and Hyderabad would be 2023, 2024 and 2025 respectively.

What is the kind of market share you hope to garner from retail and QSR?
Food services is a $65 billion market opportunity in India, as per Redseer, growing at 9 per cent per annum and likely to reach $110 billion by 2025. Within the food services market of $65 billion, online delivery accounts for market size of $4.2 billion growing at 6-7%. Hence, there is also an opportunity for online delivery to gain share within the growing food services pie. Only 9% of Internet users in India are currently ordering food online, according to estimates, versus 36% in US and 50% in China. We are enabling perishable and frozen, chilled food brands to expand their retail presence by visiting every store daily and allowing smaller inventory stocks more frequently leading to increased sales and reduction in RTV (real-time viewing) wastages. Data on wastages and sales is being collected to identify adequate stocking.  Restaurant chains / QSRs/ cloud kitchens need inventory. Being food, they require reliable, hygienic and temperature-controlled vans but for a limited 1-4 hours in a day. We offer shared van usage assuring reliability with back-up vans, staff and food-sensitive delivery infrastructure at affordable rates. Both retail and QSRs are revenue generators.  

Being a PE, can you tell us how receptive are funding agencies towards such a business model?
Supply chain is a very fundable business as it is scalable and versatile. As we help reduce last mile costs and wastages we are also looking at funding to take the model to other cities.

You have indicated that currently there are B2C players for supply chain but none in B2B. Elaborate.

We did not intend to imply that there is absolutely no competition within the B2B space. The few B2B players that exist cater to two different and specific sub verticals, either focussing on first mile logistics involving capital-intensive intra city logistics or aim at providing or establishing in house logistics for businesses, essentially making them 3rd party logistics (3PL) service providers. Just Deliveries has an overlapping service offering with 3PL players but what sets us apart is our mid and last mile logistics service with a cost-efficient pricing model for smaller businesses looking for reliable yet cost-effective logistics solutions.

What is the kind of technology being implemented by the company?
Our operations are completely digitised to minimise human intervention and errors. Real-time updates sent across systems and monitored by the relevant departments ensure smooth and efficient operations. Delivery agents are trained to work with the technology and regular internal workshops allow them to remain updated.

Tell us about your hiring plans and the current total workforce.
While we are constantly adding to the delivery fleet, efforts are on to build our management team to establish leadership positions in Mumbai and Pune. Hiring the right delivery personnel is a challenge. Since we offer van deliveries, it is less cumbersome as we do get delivery agents. Currently, being boot strapped, we find it difficult to onboard experienced senior management due to higher salary expectations. However, with mentors and advisors we are strengthening our senior team.

How would you describe the scene for supply chain for retail and QSR?
Retail is seeing entry of new age companies like AnKa SumMor. Retail industry growth is driven by the e-commerce players. General trade kiranas and modern trade stores have grown despite Covid. The Central Kitchen models are becoming popular, requiring daily stocking of semi-finished food to multi outlets, with the Gross Merchandise Value (GMV), expected to reach at least $2 billion by 2025 from $0.44 billion in 2019.

What are the trends and challenges you sight?
It is difficult for small and midsize companies to scale geographical presence due to absence of distributor interest in retail and especially for perishables. We are enabling bakery, dairy, to reach hundreds of stores daily. In QSR, survival is tough due to rentals and competition and the recent Covid waves. However dark kitchen and centralised services frozen foods suppliers are helping restaurateurs reduce operational complexity.
 
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