Swiggy, Zomato, other food delivery cos growing appetite for a healthier bite

A flurry of new health and organic food products for various segments from children and women to general wellness brands have hit the shelves even as online food delivery platforms report a spike in demand for healthy, homestyle food with consumers across cities and towns increasingly looking to eat right.

Swiggy and Zomato said they are doubling down on the health food segment while cloud kitchen operators such as Rebel Foods and Freshmenu have introduced new health brands on their platforms.

The packaged foods segment, too, has seen the launch of dozens of health brands in recent times, from women’s health brand &Me to baby food brands Slurrp Farm, Mumum Co and Timos, both online and offline. “We are seeing a significant increase in the consumption of healthy food products on the platform including organic foods, cold-pressed oils, millets, baked snacks, and diabetic-friendly foods and sugar-free range,” said Hari Menon, CEO at online grocery retailer BigBasket.

The company said its health and organic food category — which includes some of the country’s fastest-growing emerging healthfocused brands including Yoga Bar, &me, Whole.Fit, Raw Pressery, Akshayakalpa, Kapiva and Mojo Brand — grew twice as fast as its overall sales last year.

BigBasket, which serves more than 20 million customers, owns two health brands — GoodDiet, an organic fresh foods range, and BBRoyal healthy foods and snacks.

While most of these healthy items are priced at a premium, consumers see it as an investment on personal health, thanks to increasing awareness of the benefits of consuming healthy food.

Gross Margins Remain 60-65%
Akshayakalpa, an organic dairy startup, for example, has priced its products at about twice the market rate. Its milk is sold at Rs 40 for 500 ml in Bengaluru while regular milk brand Nandani is sold at about Rs 22. “It takes significant investments in the supply chain and farmer ecosystem to make high-quality milk, and the premium reflects that not added margins,” Shashi Kumar, CEO at Akshayakalpa, told ET.

Trade insiders said gross margins of healthy brands mostly remain 60-65% which is equivalent to traditional FMCG products.

Investor appetite is also on the rise. Bengaluru-based Sproutlife Foods that owns the Yoga Bar range of snack bars and muesli is in talks to raise Rs 50 crore in a round led by SAIF Partners, while plant-based active nutrition brand Oziva has held discussions with Matrix Partners for raising capital, people directly aware of the negotiations told ET.

Both companies did not respond to ET’s queries as of press time Sunday.

While in packaged food goods brands demand a premium, food delivery apps such as Swiggy and Zomato are working with their partners to improve the variety of homestyle food and make it affordable. More than 50 kitchen brands, including Eatfit, Healthie, Keto Garden, Nurtibites, Go Native, Fitchef, Health Nuts, Salad Company, and NutriChef, across top cities are offering healthy meals and food options.

“One barrier to ordering every day is the belief that the food made in restaurants is not as healthy as home-cooked food,” said Vivek Sunder, chief operating officer at Swiggy. Increasing healthy food options will help substantially increase the frequency of ordering food “and potentially over time replace home cooks”, he said.

‘For Informed Choices’
Zomato has a separate section on its app, Zomato Healthy, that curates health food options for consumers. “The idea is to enable easier discovery and access to information for users to make informed choices,” said Mohit Sardana, COO, food delivery, at Zomato.

Cloud kitchen company Fresh-Menu has introduced healthy food brand Green Cravings, while Ola runs Khichdi Experiment, Swiggy owns Homely, and Rebel Foods has launched healthy food brand 500 Calorie Project. “Health is an emerging and an irreversible trend,” said Jaydeep Barman, founder of Rebel Foods that runs Faasos and Behrouz biryani.

Investors in the space say health food listings on food delivery apps see twice as many repeats as other segments, and it is the fastest-growing segment.

Smaller towns too have joined the health food bandwagon.

Sheta Mittal, cofounder of &Me that primarily sells drinks and chocolates to address women’s health issues such as common hormonal disorder PCOS, said close to 30% of the company’s sales come from beyond the metros.

About 70% of the company’s sales come from its Rs 2,400 pack products, which shows that customers are willing to pay a premium for wellness.

But then, taste too matters. Positionings such as ‘no-sugar’, ‘organic gur’ and ‘zero fat’ may attract first-time consumers, but repeats are mainly driven by taste, industry insiders said.

“Consuming health and wellness requires discipline and compliance, which is tough to expect if healthy products aren’t tasty,” said Revant Bhate, cofounder of consumer brand startup Mosaic Wellness.

Source:- Economic Times

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