What next for F&B startups?

At the first edition of afaqs! Startup Brands Summit, the panellists discussed how they negotiate various challenges as they compete with the established players in the industry.

Over the last few years, we have seen a slew of startups entering the food and beverages (F&B) market and competing with the established players. From snacks to coffee, alcobev, packaged ready-to-cook (RTC) food, startups have really disrupted the F&B industry. While these brands try to carve out a space for themselves on the supermarket shelves and in the carts of online shoppers, they face new challenges daily.

Recently, I moderated a panel discussion on F&B startups' future trends at the first edition of afaqs! Startup Brands Summit. The panellists included Aditya Sanghavi, founder and CEO, Snackible; Isha Dhoble, VP - marketing and strategy, Epigamia; and Sohil Wazir, chief commercial officer, Blue Tribe Food. We discussed how the startups negotiate these challenges to continue to grow from a mere idea to a formidable nationwide company.

Whether it is dairy products or plant-based meats or snacks, all the three startups on the panel position themselves as ‘healthy’ food products. During the COVID pandemic, many people switched to a healthy lifestyle and became conscious of what they consumed. But as the pandemic ebbed and people went back to their normal lives, has that habit sustained? Do consumers still care about a brand’s ‘healthy’ positioning?

Sanghavi of Snackible said that once people gain the knowledge of a healthy lifestyle, it is difficult for them to go back to their old habits. “That knowledge is not lost. Young parents have become more responsible and are making healthier decisions for their families. That’s the new generation. They are going to continue to buy from direct-to-consumer (D2C) brands and make healthier choices.”

The emergence of quick commerce (q-commerce) has given a strong impetus to the F&B industry - especially to impulse categories like snacks. The panellists shared their views on the role this channel plays for their brands.

Epigamia's Dhoble said consumers don’t mind compromising on the brand for convenience. That is, if Epigamia is not available on a platform, consumers will buy whatever is available, as they want it urgently.

“That wouldn’t happen in physical stores. So, it’s a different environment for brands. It is a dream for new brands, as you are in front of your consumers on their phones. People aren’t going to physical stores as much as they did before. Discovery is now through their phones. It’s a different way for consumers to discover products today.”

However, she also stressed on the importance of an omni-channel strategy. “It is the more sustainable way forward. Q-commerce has only penetrated to certain sections. If you want to cater to a larger audience and build a sustainable brand, you need to be everywhere. You can’t rely on only one channel,” Dhoble added.

Wazir of Blue Tribe Food also highlighted the importance of an omni-channel presence for the plant-based category. “It is a nascent category and taste is the primary barrier to get people to try out plant-based meats. With food, you can make people taste it only if you are physically present.”

While Blue Tribe Food started as a D2C brand, post-COVID, it conducts a lot of offline tasting and sales. “It is key to our strategy to get people to taste it and then buy it. Omni-channel makes a lot of sense, especially for food brands,” Wazir added.

The panel also discussed unique innovations, the role of brand collaborations to expand the target audience and how subscription plans help these startups in customer retention.

You can watch the full panel discussion below: