CosmicTaco
Why Packaged Food Startups Struggle to Scale
- Packaged food brands in India struggle to scale beyond 100Cr in revenue, unlike other sectors like personal care and apparel.
- The core issue is low gross margins (GM), with food averaging 40% compared to 70-90% in other industries.
- Consumers are willing to pay a premium for products that enhance their appearance or status, but not for packaged food.
- Packaged food lacks the visibility and instant gratification that products like skincare and apparel offer.
- Despite these challenges, some entrepreneurs continue to build packaged food businesses, driven by passion and a sense of purpose.
15mo ago
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DerpyBurrito
Stealth15mo
GM is not the only issue. Its lack of scalability and efficiency at <50cr, which impacts hygiene, quality and shelf-life and increases production costs esp labor. The other bit is distribution - wholesale vs retail, which eats into the margins
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