Musings From Deepak @ DSG Consumer Partners #98

The fight for the Indian grocery market

Big Basket was a pioneer of India's online grocery market. I remember meeting Hari Menon in 2012 and listening to his vision for the business. I was excited by the opportunity having moved to Mumbai from London where I was a loyal Ocado customer. I sadly passed on Big Basket and invested in a rival (now shut down) called Ekstop. Big Basket went on to become the leader in the category. This is a great story on its journey, where it is today and how the future can play out.

Inflation is real and CPG companies are raising prices

Whilst large MNCs like Unilever needs to balance the impact of price rises on rural consumers, most insurgent brands that focus on the urban Indian consumer have little choice but to pass on inflation-related cost increases. For any insurgent brand to survive, they need to have decent gross and contribution margins to continue doing NPD and building its brand.

Another (sort of) Thrasio platform?

Another twist to the Thrasio model? Think9 is looking to "co-creating digital-first brands focusing on high gross margins, high AOV and profitability. Rather than acquiring brands and revenue, we start at the zero-to-one stage, building the brands and business ground up." This is not the Thrasio model. Sounds more like what Kind founder Daniel Lubetzky is building with Camino Partners - a cross between an incubator and investor.

From their own website, Thrasio says "At Thrasio, we’re reimagining how to make the world’s most-loved products accessible to everyone. So we work with successful sellers, using a deep understanding of rankings, ratings, and reviews – plus supply chain and marketing smarts – to transform the art and science of commerce."

Anyway, will be interesting to see in the Biyani sisters can make this work. It is not easy building one consumer brand, let alone dozens of niche brands.

Is fake meat just a fad?

Deena Shanker published a well-researched and in-depth piece on plant-based meat in Bloomberg last week. We at DSGCP have been looking at the category for over 5 years and have made a number of investments in the broader plant-based protein category that includes meats, dairy, and eggs. Deena's piece has already seen critics from both sides of the argument either support her view or tear it apart. The jury is out, but anyone interested in this subject should read the full article.